Texas Property Tax at 65: $200,000 Exemption, Tax Freeze, and Deferral

What Turning 65 Changes on a Texas Property Tax Bill

Texas has no state property tax. Every line on the bill belongs to a local taxing unit: the school district, the county, the city, and often a hospital district, a community college district, an emergency services district, or a utility district. Each one sets its own rate, and each one decides, within state law, which exemptions and limits it offers. Turning 65 does not change all of those lines the same way, which is why the most useful way to read the bill is one line at a time.

Three tools do the work. The exemption reduces the taxable value of the home. The ceiling limits the tax in dollars, whatever happens to value or rates. The deferral leaves the tax in place but postpones collecting it. A fourth, smaller tool is the installment plan: a homeowner 65 or older can pay the homestead tax in four equal payments without penalty or interest, if the first is paid before the delinquency date (usually February 1) along with notice to the tax office, and the rest before April 1, June 1, and August 1.

These are the 2026 rules. The legislature next meets in regular session in January 2027, and further changes have already been proposed, from extending the over-65 school exemption to homeowners 55 and older to eliminating school property taxes on homesteads altogether, so the specific amounts are worth rechecking each year.

The Over-65 Homestead Exemption, Taxing Unit by Taxing Unit

School districts: mandatory and large. Every Texas homestead receives a $140,000 school district exemption, and a homeowner who is 65 or older, or who qualifies as disabled under the Social Security definition, receives an additional $60,000, for $200,000 in all. Both amounts took effect for the 2025 tax year after voters approved them in November 2025; before that, the figures were $100,000 and $10,000. Some school districts also offer a local-option exemption on top of these. A person who is both disabled and 65 or older can claim only one of the two additional exemptions from the same taxing unit.

Counties, cities, and special districts: local choice. Beyond the state’s mandatory school amounts and one small county exemption, the exemptions are local options. Any taxing unit can exempt up to 20% of a homestead’s value (with a $5,000 minimum when it does), and any taxing unit can adopt an additional exemption of at least $3,000 for homeowners 65 or older or disabled; some large cities and counties offer far more. A county that levies a farm-to-market road or flood control tax must give a $3,000 homestead exemption against it. Local exemptions are not equally durable. A taxing unit can later reduce its over-65 exemption or repeal it altogether, and a school district, city, or county that offered a percentage exemption in 2022 cannot reduce or repeal it through the 2027 tax year, a protection that then expires. Two neighbors in different cities, or on opposite sides of a county line, can have very different bills on identical homes.

What $200,000 does to the school line. For a home appraised at $200,000 or less, the school district tax is now zero. For a home appraised at $500,000, school tax applies to $300,000 of value instead of the $360,000 it applied to before age 65. For a home appraised above $200,000, the over-65 exemption is worth the school district’s rate times $60,000 every year, which at a rate of $1.00 per $100 of value is $600.

Who qualifies. The homeowner must own an interest in the home, live in it as a principal residence, and be 65 or older; when one spouse turns 65 and owns an interest in the home, the home qualifies. A person can claim only one residence homestead, and the application asks the owner to state that they claim no homestead exemption on any other home, in Texas or anywhere else. For families who split time between states, that is a real choice, not a formality.

How the School Tax Ceiling (the Over-65 Freeze) Works

The ceiling is set in the year you qualify. Once the over-65 exemption applies to a homestead, the school district tax on it cannot exceed the amount imposed in the first year of qualification. It can go below that amount, and it often does, but it cannot go above it, whatever happens to appraised value or tax rates. The one exception is improvement: an addition, a garage apartment, a new pool, or anything else beyond ordinary repair and maintenance raises the ceiling by the tax on the new value.

The ceiling moves down automatically. Since the 2024 tax year, the school ceiling has been rebuilt each year from the prior year’s actual school tax, reduced for any compression of the school district’s tax rate and for any increase in the school exemptions. That is how homeowners who were already frozen received the 2025 increases too, in the form of a lower ceiling. It also means the school ceiling ratchets: in any year the school tax comes in below the ceiling, that lower amount becomes the new starting point. A ceiling set years ago is a starting point that later relief can lower, never one that later appraisals can raise.

The first two years get a comparison. For a homeowner who qualifies partway through a year, a 2025 law that took effect for 2026 spells out that the ceiling in the second year is the lower of two amounts: the first year’s ceiling, adjusted for any rate compression or exemption increase, and the school tax actually computed for the second year.

The qualifying year is when value matters most. Because the ceiling starts from the tax actually imposed in the year you qualify (or the following year, if that is lower), a lower appraised value in those years, whether from a protest or a correction, carries forward on every frozen line for as long as you live there. The protest deadline is generally May 15, or 30 days after the appraisal notice is delivered if that is later. Value keeps mattering after that, too: the unfrozen lines are taxed on it every year, even for a homeowner whose school tax has reached zero.

Why a zero ceiling is the valuable one. For the roughly 60% of older homeowners whose school tax has reached zero, the ceiling might look irrelevant. It is the opposite. A homeowner whose school tax was zero in the year they qualified, or whose ceiling has since been lowered to zero, has a ceiling of zero, and it stays at zero as the home appreciates. A home appraised at $200,000 in the year its owner qualifies owes nothing to the school district; if it is later appraised at $300,000, the school tax computed without the ceiling would be $1,000 at a $1.00 rate, and the ceiling keeps it at zero. Only an improvement can lift it.

A fixed-dollar promise that inflation works for. Fixed-dollar arrangements in retirement usually work against a retiree: a pension without a cost-of-living adjustment, say, buys a little less every year. The ceiling works the other way. At 3% inflation, a school tax frozen at $4,000 costs about $2,976 in today’s dollars ten years later. In a household’s long-range plan, it is one of the few line items that inflation shrinks rather than grows.

Beyond the School District: County, City, and Junior College Freezes

The school ceiling is mandatory statewide. Counties, cities, and junior college districts can offer the same kind of freeze for homeowners 65 or older or disabled, adopted either by the governing body or by the voters, through a petition signed by 5% of registered voters that requires an election. Under the Texas Constitution, once one of those units adopts the freeze, its governing body cannot repeal it, which makes a local freeze more durable than a local exemption. Hospital districts, water districts, and other special districts cannot offer it, so their lines on the bill keep moving with value and rates.

Which units in a given county have adopted a freeze is public information, and it is often the most important single fact about how a retiree’s bill will behave. Counties and cities around San Antonio, Austin, Dallas, and Houston have made different choices: some offer both a generous over-65 exemption and a freeze, some offer one, and some offer neither. The appraisal district and the county tax office list each unit’s exemptions and limitations, and the line-by-line detail on an appraisal notice shows which ones apply to a particular home.

Even a zero school bill leaves the rest. The same Tribune report featured a Hays County homeowner whose school tax had fallen to zero on a home worth about $546,000, and who still paid more than $1,000 to the other taxing units.

A Worked Example: One Home, Ten Years

Consider a married couple in a growing suburb of one of the state’s big metros, in the year the older spouse turns 65. Their home is appraised at $600,000. To keep the arithmetic visible, the example uses round, illustrative tax rates and a simple set of local choices; actual rates and exemptions vary by address.

• The school district taxes at $1.00 per $100 of value and offers only the state’s mandatory exemptions.
• The county taxes at $0.40 per $100, exempts 20% of homestead value, adds a $100,000 exemption at 65, and has adopted the freeze.
• The city taxes at $0.50 per $100, exempts 10% of homestead value, adds a $50,000 exemption at 65, and has not adopted a freeze.

The year they qualify. Without the over-65 exemptions, the home would owe $9,220: $4,600 to the school district, $1,920 to the county, and $2,700 to the city. With them, it owes $7,970: $4,000, $1,520, and $2,450. The over-65 exemptions are worth $1,250 a year, $600 of it from the school district, $400 from the county, and $250 from the city. And two of the three lines are now frozen: the school tax at $4,000 and the county tax at $1,520.

Ten years later. Suppose the home’s appraised value rises 5% a year, inside the 10% annual limit Texas places on homestead appraisal increases, to about $977,000, and every rate stays where it is. Rounded to the nearest $10, the taxes computed without any freeze would be $7,770 for the school district, $2,730 for the county, and $4,150 for the city, $14,650 in all. With the freezes, the couple pays $4,000, $1,520, and $4,150, for $9,670. By then the two freezes are saving $4,980 a year, and the city’s unfrozen line, up about 69% from $2,450, has become the largest part of the bill.

Rates rarely sit still. When values rise, taxing units often lower their rates, and state limits restrict how much more revenue they can collect each year without voter approval, so holding rates flat exaggerates the growth of the unfrozen lines. The shape of the result holds anyway: the frozen lines stop moving, and the unfrozen ones carry all of the growth. For a household projecting retirement spending, those are different kinds of expense and belong in the plan as such.

A move. Now suppose the couple sells and buys a $500,000 home in a different Texas school district with the same $1.00 rate. Their $4,000 school ceiling was about 51.5% of the $7,770 they would otherwise have owed, and that percentage travels with them: the new home’s school tax, $3,000 before the ceiling, comes with a ceiling of about $1,544. The transfer takes a certificate from the old appraisal district, presented with the exemption application on the new home. The $200,000 school exemption is available on any Texas homestead they move to, with a new application. The 10% appraisal limit does not travel: it begins again on the new home only after its first year as their homestead. The county freeze follows only to a new home in the same county, calculated the same way, and a city or junior college freeze only within the same city or district.

Timing, Filing, and Life Events

The whole year you turn 65 counts. The over-65 exemption applies for the entire tax year in which you turn 65, not just the months after your birthday, and the ceiling is set from that year’s school tax. The application, Comptroller Form 50-114, is filed with the appraisal district where the home is located. The deadline for the year you qualify is the first anniversary of the date you qualified, and a late application can still be filed up to two years after that year’s delinquency date. If you already receive the homestead exemption and the appraisal district has your date of birth, from your application or from driver’s license records, the law requires it to add the over-65 exemption automatically; the next appraisal notice is the place to confirm that it did.

Buying a home after 65. The general homestead exemption on a home bought after January 1 applies for the rest of that year if the seller did not have it. The over-65 exemption works on a full-year basis, and successive owners cannot both receive the same exemption on the same home in the same year, so the year of purchase can depend on what the seller had. The appraisal district is the place to confirm the details, and the ceiling certificate from the old district belongs in the same application.

A surviving spouse. If a homeowner who had the over-65 exemption dies, a surviving spouse who was at least 55 at the time and who lives in the home keeps the exemption and the ceiling, including any county, city, or junior college freeze. The protection can be lost by accident in an estate settlement that moves title or changes who lives in the home, which is a reason to look at the property tax position before a home is retitled rather than after.

A move to assisted living. A home does not stop being a homestead because its owner moves into a facility that provides care related to health, infirmity, or aging, as long as the owner does not establish a different principal residence. A temporary absence of less than two years, with the intent to return, is protected the same way.

Putting a child on the deed. Texas divides homestead exemptions by ownership share, treating a spouse’s community interest as owned by the qualifying spouse, so a parent who deeds part of the home to a child who lives elsewhere can see the exemptions on it shrink in proportion. A transfer-on-death deed or a qualifying revocable trust passes the home at death without giving the child a share of it today. Our step-up article covers the other costs of adding a child to a title.

Homes held in a trust. A home owned through a revocable living trust can keep its homestead exemptions and ceiling if the trust qualifies under Texas law. The trust agreement, or another binding instrument, has to give the person living there the right to occupy the home rent free, and the deed into the trust has to describe the property and be recorded in the county’s real property records. When it does, the statute provides that the ceiling does not expire because the home moved into the trust; that occupancy language is what keeps the property tax benefits attached.

Deferral: A Loan Against the House at 5%

How it works. A homeowner 65 or older (or disabled, or a disabled veteran who qualifies for that exemption) who owns and lives in the home can file a tax deferral affidavit with the appraisal district. Unlike the exemption, the affidavit cannot be signed before the homeowner has actually turned 65. From then on, no taxing unit can sue to collect the homestead’s taxes or sell the home at a tax foreclosure, and a suit or sale already pending can be stopped with the same affidavit. The taxes are not forgiven. A lien stays on the home, interest accrues at 5% a year instead of the normal delinquency rate, and no new penalties apply; penalties and interest owed before the affidavit stay owed. (A separate, narrower deferral lets any homesteader postpone the part of the tax caused by an appraisal increase of more than 5% in a year, at 8% interest.)

When it ends. The deferral lasts as long as the homeowner owns and lives in the home. After that, whether through a sale, a move, or a death, the taxes and interest come due, and the tax office cannot sue or foreclose until 181 days after it delivers a notice of delinquency. A surviving spouse who was at least 55 when the homeowner died and who lives in the home can continue the deferral. Otherwise the payoff falls to the estate or the heirs, who can pay it, refinance, or sell, and penalties can be imposed once that window passes.

What it costs. The 5% is charged on each year’s deferred tax from the date that year’s bill would have become delinquent. Computed as simple interest, a homeowner who defers a $3,000 bill every year for ten years owes $30,000 of tax and $8,250 of interest when the deferral ends, $38,250 in all. Because simple interest does not compound, the effective cost falls the longer the deferral runs: over ten years, the payoff equals what the same $3,000 payments would have grown to at about 4.4% a year compounded, and over twenty years, at about 3.9%. That makes the comparison concrete. If the money that would have paid the bill will otherwise earn more than that, after tax, deferring leaves more for the household; if it would sit somewhere earning less, paying is cheaper.

What the dollars leave out.

• Heirs who hope to keep the house inherit the lien with it and have to raise the payoff, $38,250 in the example, within months of the deferral ending. Heirs who plan to sell can pay it at closing, from the proceeds of a home that typically receives a step-up in basis at death.
• Most mortgages, including reverse mortgages, require property taxes to be paid when due, so a deferral can put a loan in default even though the tax office is content to wait. The loan documents come first.
• A deferred tax is deductible only in the year it is actually paid. Paid off during life, after a sale or a move, several years of deferred tax can land in a single year’s deduction, which can make itemizing worthwhile that year, but only up to that year’s cap on state and local taxes, which falls back to $10,000 in 2030. The 5% interest is not deductible at all: it is neither a tax nor mortgage interest.
• Deferral is not the only relief built for older homeowners. The installment plan spreads a single year’s bill over four payments without penalty or interest, which solves a cash-flow squeeze at no cost.

How the Federal Return Fits

An exemption is worth more than a deduction. Every dollar of property tax an exemption eliminates is a dollar kept, whether or not the household itemizes. A federal deduction for that same dollar saves only the household’s bracket rate, and only if it itemizes, which many households over 65 do not. For 2026, a married couple who are both 65 or older have a standard deduction of $35,500 ($32,200 plus $1,650 for each spouse), and the $6,000-per-person senior deduction, available through 2028, is claimed on top of it, whether they itemize or not, subject to an income phaseout. The couple in our example, paying $7,970 of property tax in the year they qualify, would need more than $27,530 of other itemized deductions, such as mortgage interest, deductible charitable gifts, and sales tax, before itemizing beat the standard deduction. If they give cash to charity, the bar is up to $2,000 higher, because non-itemizers can now deduct up to $2,000 of cash gifts made directly to charities on a joint return.

Timing matters less after 65. Our article on the 2026 SALT cap and Texas property tax explains how the year a bill gets paid can decide whether a household itemizes. After 65, the exemptions shrink the bill that lever works with and the larger standard deduction raises the bar it has to clear, so for many older homeowners it no longer changes the answer.

The benefits stop at the state line. A household with a second home or family in another state, or one weighing a move out of Texas, gives up all of this on leaving: the exemptions, the ceilings, and the deferral are Texas law and apply only to a Texas homestead. That belongs in the comparison alongside income tax, estate rules, and everything else that changes with a move.

How We Think About It

We lean toward reading a property tax bill line by line at 65, because the lines no longer behave alike. The school line, for many households now at or near zero, is held in place by the ceiling; frozen county, city, or junior college lines stop growing; the unfrozen lines carry all the growth, and those are the ones a multi-year tax projection and a long-range spending plan should project with value and rate increases built in. A household that treats property tax as a single number in its plan will usually misstate both its level and its growth.

We lean toward treating deferral as what it is: a loan against the house at 5% a year, with the lien and payoff timing that come with it, compared on real numbers with the other ways of paying the bill, such as cash reserves, a withdrawal from savings and its tax cost, the installment plan, or a sale. It can be a sensible source of liquidity for a homeowner who intends to stay, whose heirs expect to sell, and who has no loan that requires current taxes. It fits poorly when heirs hope to keep the home and would have to raise the payoff, or when the money it frees up would earn less than the deferral costs. And it is a different decision altogether for a homeowner already facing a collection suit, where filing the affidavit stops the suit first and the planning comes after.

We lean toward putting the tax ceiling into a downsizing or relocation decision as a number rather than a reason. The school exemptions are available on any Texas homestead with a new application, and the school ceiling moves as a percentage; a county, city, or junior college freeze moves only within the same unit; the 10% appraisal limit starts over; and nothing moves past the state line. Staying in a home that no longer fits to protect a ceiling, and leaving one without knowing what the move costs in property tax, are both decisions made without the number that should inform them.

Common Questions

What property tax exemptions do Texas homeowners get at 65?

School districts must exempt $200,000 of a homestead’s value for a homeowner 65 or older: the $140,000 every homestead receives plus an additional $60,000. Any taxing unit, including the school district, can add its own over-65 exemption of at least $3,000 and a percentage exemption of up to 20% of value, but each unit decides for itself. Homeowners 65 or older also get a school tax ceiling, and some counties, cities, and junior college districts offer one too. Turning 65 does not end the property tax bill: county, city, and special district taxes continue beyond whatever those units exempt or freeze.

How does the over-65 property tax freeze work in Texas?

The school tax ceiling, commonly called the freeze, means the school district tax on the homestead cannot rise above the amount imposed in the first year the homeowner qualified for the over-65 exemption. It can fall below that amount, and the law lowers existing ceilings when school tax rates are compressed or the exemptions increase. It rises only if the homeowner improves the home beyond ordinary repairs. On a move to another Texas home, the ceiling transfers as a percentage of the new home’s school tax, using a certificate from the old appraisal district, and a surviving spouse who was at least 55 when the homeowner died keeps it. Counties, cities, and junior college districts can adopt freezes of their own.

Can I defer property taxes in Texas after 65?

Yes. A homeowner 65 or older who owns and lives in the home can file a tax deferral affidavit with the appraisal district, which stops collection suits and tax foreclosure for as long as they own and live there. The taxes remain a lien on the home and accrue interest at 5% a year, without penalties. They come due when the homeowner no longer owns and lives in the home, with 181 days after a notice of delinquency to pay, unless a surviving spouse who was at least 55 continues the deferral.

When should I apply for the over-65 exemption?

In the year you turn 65. The exemption covers that entire tax year, and the deadline to apply for it is the first anniversary of the date you qualified; a late application can be filed up to two years after that year’s delinquency date. The form is Comptroller Form 50-114, filed with the appraisal district where the home is located. If you already receive the homestead exemption and the district has your date of birth, from your application or from driver’s license records, it is required to add the over-65 exemption automatically, so the next appraisal notice is the place to confirm it.