File your homestead exemption as soon as you close. Protest your assessed value every year. Keep receipts for home improvements (they can increase your tax basis). Understand the four components of your tax rate. Plan for annual increases in your budget. A good strategy can save you thousands per year.
The Homestead Exemption
The Texas homestead exemption removes a portion of your home's value from taxation. For 2025, the school district exemption is $100,000. County and city exemptions vary. File with the Bexar Appraisal District within the first year of ownership. This is your single biggest tax-saving tool.
Annual Protest Strategy
Protest your assessed value every year, even if you think it is fair. The deadline is May 15 or 30 days after your notice, whichever is later. Gather comparable sales, photos of defects, and recent appraisals. Many homeowners reduce their value by 5-10% through protest, saving hundreds each year.
Keep Receipts for Improvements
Some improvements like new roofs, HVAC, or additions may increase your assessed value. Keep all receipts and permits. If you sell, these records help you establish your cost basis for capital gains calculations. Also track improvements that qualify for tax credits.
Understanding Tax Components
Your property tax bill has four components: school district, city, county, and special districts (hospital, emergency services, etc.). Each sets its own rate. School taxes make up the largest portion (roughly 50-60%). Voting in local bond and rate elections directly affects your tax bill.
Planning for Increases
Texas has a 10% annual cap on homestead value increases (school taxes only). Even with the cap, values are reappraised annually. Budget for 3-5% annual property tax increases in your homeownership costs. If your income qualifies, apply for tax deferrals for seniors or disabled homeowners.