Homestead Exemption: Why Your Texas Property Taxes Still Went Up

If you have a homestead exemption in Texas and your property taxes still increased, you’re not alone. A lot of homeowners are asking the same question:

“I thought my taxes were capped… so why did they go up?”

The answer comes down to a common misunderstanding about how the homestead exemption actually works.

The 10% Cap—What It Really Means

Yes, your homestead exemption does include a 10% cap—but it applies only to your assessed home value, not your total property tax bill.

That means your home’s taxable value can only increase by up to 10% each year. That part is protected.

But your tax bill is a different story.

What Your Tax Bill Is Really Based On

Your total property tax bill is calculated using two main factors:

• Your assessed value

• Your local tax rate

While your assessed value has a cap, your tax rate does not.

And that’s where things can change.

Why Your Taxes Can Still Go Up

Local taxing authorities—like cities, counties, and school districts—set tax rates each year. These rates can increase to cover things like:

• New schools

• Infrastructure improvements

• Voter-approved bonds

• Budget gaps

So even if your home’s value only increases by 10%, a higher tax rate can still push your total tax bill beyond that.

Assessed Value vs. Market Value

Another important factor to understand is that:

Your assessed value is not always the same as your home’s true market value.

In today’s market, some homeowners are seeing:

• Rising property tax bills

• Properties that may be over-assessed

This means you could be paying taxes based on a value that doesn’t accurately reflect what your home would actually sell for.

The Bottom Line

Your homestead exemption is designed to protect you from large spikes in your home’s assessed value—and it does that well.

But it does not cap your total tax bill.

What You Can Do

If you recently received your property tax assessment and your bill seems higher than expected, it may be worth taking a closer look.

You might be overpaying.

If you want a second opinion on your assessment, send us a message.
We’re helping many homeowners right now make sure they’re not paying more than they should.