Property taxes can feel confusing, especially when your Dallas appraisal jumps. If you own and live in your home, the homestead exemption and the 10% cap can protect you. You want clear steps, straight answers, and confidence about what applies to you. This guide breaks down how the exemption works, what the 10% cap really limits, how to apply in Dallas, and what buyers and sellers should expect. Let’s dive in.
Homestead exemption basics in Dallas
A residence homestead is your primary home that you own and occupy. Texas law requires school districts to give a residence homestead exemption of $100,000 from school taxes. You may also qualify for an extra $10,000 for school taxes if you are age 65 or older or disabled. You can review the statewide rules in the Texas Comptroller’s Property Tax Exemptions guide for details and updates.
Why it matters: exemptions lower the taxable value used to calculate school taxes, which is often the largest part of your property tax bill.
The 10% cap explained
Texas limits how fast the appraised value for a qualified homestead can rise each year. If your market value jumps more than 10%, the appraised value used for taxes can only increase up to 10% from last year’s appraised value until it catches up to market value. The rule is in Tax Code Section 23.23, and local guidance from DCAD explains how the timing works.
- Statute: Texas Tax Code Section 23.23
- Local guidance: DCAD’s homestead cap explanation
Example: Year 1 market value is $200,000 and you receive the homestead exemption. Year 2 market value is $250,000. The 10% cap limits your Year 2 appraised value to $220,000. In later years, the appraised value can rise up to 10% per year until it reaches market value.
When the cap starts
The cap begins on January 1 of the year after you have had the homestead exemption for a full tax year. In practice, you need the exemption in place for one full tax year before the cap protects you.
When the cap does not apply
The cap does not limit value increases from new improvements, such as additions or major renovations. It also ends with a change in ownership. If you sell, the new owner must qualify for their own exemption, and their cap timeline starts fresh.
Extra protection for seniors and disabled homeowners
There is a separate limit for school taxes called a tax ceiling for homeowners who are age 65 or older or who qualify as disabled. The school district cannot increase your total annual school tax above the amount from the first year you qualify. This does not change your appraised value. It limits the school tax bill itself while you live in the home.
- Statute: Texas Tax Code Section 11.26
How to apply for a homestead in Dallas
You apply with the Dallas Central Appraisal District (DCAD). Filing is free.
Prepare your documents:
- Your completed residence homestead application.
- A Texas driver’s license or ID card that shows the same address as the property. DCAD’s application guide explains exceptions and affidavit options for certain cases.
- Guidance: DCAD’s homestead application guide
Choose how to file:
- File online: DCAD homestead portal
- Or mail/in person using the state form: Comptroller Form 50-114
Watch the deadlines:
- General deadline: April 30 or May 1 as noted by DCAD. Late filing is allowed for many homesteads for up to two years after the delinquency date. Confirm current instructions each year.
- Deadline info: DCAD deadline to apply
If you bought after January 1:
- State law allows prorated exemptions in some cases if the prior owner did not receive the same exemption that year. Apply within the statutory window shown in DCAD’s instructions.
Buying or selling a Dallas home
- The seller’s homestead exemption and 10% cap do not transfer to you. When ownership changes, the cap resets. You must apply for your own exemption after you move in.
- Your cap protection starts only after you have had the exemption for a full tax year, then it applies starting January 1 of the following year.
- If you plan major renovations, remember that new improvements are not capped and can increase your taxable value even with a homestead in place.
If your notice looks too high: how to protest
If you receive a Notice of Appraised Value, you can file a protest with the Appraisal Review Board. The deadline is May 15 or 30 days after the notice is delivered, whichever is later. DCAD provides an online system and clear instructions.
- Deadlines and steps: DCAD protest deadline
Tips:
- Compare the market value to recent comparable sales and to similar properties nearby.
- Bring photos, contractor estimates, or inspection reports that support your position.
- Check your notice for both market value and the capped appraised value so you understand what affects your tax bill.
What to watch in 2025
As of February 2025, the Texas Senate advanced proposals to raise the statewide school-district homestead exemption to $140,000 for most homeowners, with some versions proposing larger amounts for seniors and disabled homeowners. These are proposals and would require additional steps before taking effect, including possible voter approval. For status updates, see reporting on the Senate action in February 2025.
If you want a practical walkthrough of how the exemption and cap could affect your next purchase or sale, reach out to Jason Kramer. We are happy to help you plan timing, set expectations, and avoid surprises at closing.
FAQs
What is a Dallas homestead exemption and who qualifies?
- It applies to your primary residence that you own and occupy, and it reduces the taxable value for school taxes. Texas law sets a $100,000 school-district exemption, with an additional $10,000 for age 65+ or disabled homeowners.
When does the Dallas 10% cap start after I apply?
- The cap starts on January 1 of the year after you have had the homestead exemption for a full tax year, so there is a one-year lag before it protects you.
Does the 10% cap limit my tax bill or my value?
- It limits the annual increase to your appraised (taxable) value for a qualified homestead. Tax rates are set by taxing units, so your final bill depends on those rates plus your capped value.
Do renovations or additions affect the 10% cap in Dallas?
- Yes. New improvements are not limited by the cap, so additions and major renovations can increase your appraised value even if you already have a homestead.
How do senior or disabled tax ceilings work with the cap?
- The tax ceiling limits the total amount of school taxes you pay after you qualify, while the 10% cap limits how fast your appraised value can rise. They are separate protections that can work together.
