96-1740 Texas Property Tax Exemptions

Texas Property

Tax Exemptions

Complete and Partial Property

Tax Code Exemptions Available to

Property Owners Who Qualify

February 2018

Glenn Hegar

Texas Comptroller of Public Accounts

Tax Code Section 5.05(a) authorizes the Comptroller’s ofce to prepare and issue publications relating to the appraisal of

property and the administration of taxes as a public service. By publishing this manual, the Comptroller’s ofce is mak-

ing available an information resource of a general nature regarding the appraisal of property and the administration of

taxes. This publication does not address and is not intended to address all aspects of property appraisal, tax administra-

tion or property tax law. The information contained in this publication neither constitutes nor serves as a substitute for

legal advice. Pursuant to Tax Code Section 5.041(f), the Comptroller’s ofce may not advise a property owner, a property

owner’s agent or the appraisal district on a protest matter. Questions regarding property appraisal, tax administration, the

meaning or interpretation of statutes, legal requirements and other similar matters should, as appropriate or necessary,

be directed to an attorney or other appropriate counsel.

Texas Property Tax

Property Tax Exemptions

Table of Contents

Property Tax Exemptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Exemption Applications

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Owner’s Qualications

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Property’s Qualications and Use

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Chief Appraiser Determinations

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Types of Exemptions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Residence Homestead

(Tax Code Section 11.13)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Veterans’ Exemptions (Tax Code Sections 11.131, 11.132, 11.133, 11.22 and 11.23(a))

. . . . . . . .5

Surviving Spouse of First Responder (Tax Code Section 11.134)

. . . . . . . . . . . . . . . . . . .6

Charitable Organizations Generally (Tax Code Section 11.18)

. . . . . . . . . . . . . . . . . . . . .6

Community Land Trusts (Tax Code Section 11.1827)

. . . . . . . . . . . . . . . . . . . . . . . . . .6

Primarily Charitable Organizations (Tax Code Section 11.184)

. . . . . . . . . . . . . . . . . . . . .6

Religious Organizations (Tax Code Section 11.20)

. . . . . . . . . . . . . . . . . . . . . . . . . . .7

Private Schools (Tax Code Section 11.21)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Public Property (Tax Code Section 11.11)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Appendix A – Tax Code Exemption General Application Provisions

. . . . . . . . . . . . . . . . . .9

Appendix B – Other Property Tax Code Exemption Summaries

. . . . . . . . . . . . . . . . . . . 11

Appendix C – Residence Homestead Exemptions.

. . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Texas Property Tax

Property Tax Exemptions

Property Tax Exemptions — 1

Texas Property Tax

Property Tax Exemptions

Property tax in Texas is a locally assessed and locally ad-

ministered tax. There is no state property tax. Property tax

brings in the most money of all taxes available to local taxing

units. Property taxes pay for schools, roads, police and re-

men, emergency response services, libraries, parks, and other

services provided by local government. State law provides for

a variety of exemptions from property tax for property and

property owners that qualify for the exemption.

Texas offers a variety of partial or total (absolute) exemp-

tions from property appraised values used to determine local

property taxes. A partial exemption removes a percentage or

a xed dollar amount of a property’s value from taxation. A

total (absolute) exemption excludes the entire property from

taxation. Taxing units are mandated by the state to offer cer-

tain (mandatory) exemptions and have the option to decide

locally on whether or not to offer others.

Exemption Applications

The law requires the property owner to apply for an exemp-

tion in most circumstances.

If a property owner fails to le

a required application on time, the owner usually forfeits the

right to the exemption unless late application provisions exist

in law.

The general deadline for ling an exemption application is

before May 1.

Charitable organizations improving property

for low-income housing and community housing develop-

ment associations must le the application for exemption

within 30 days of acquiring the property.

Tex. Tax Code § 11.43(a)

Tex. Tax Code §§ 11.43(d), 11.431, 11.433, 11.435, 11.438, 11.439 and

11.4391

Tex. Tax Code § 11.43(d)

Tex. Tax Code § 11.436

Some exemptions require the property owner to le an ap-

plication one time and others require the property owner to

le an application annually. Most one-time exemptions al-

low the chief appraiser to request a new application to verify

that a property or property owner remains eligible for the ex-

emption. Appendix A is a chart outlining which Tax Code

exemptions:

• require no application;

• require an annual application; or

• require a one-time application, unless requested by the

chief appraiser.

Appraisal district chief appraisers are responsible for deter-

mining whether or not property qualies for an exemption.

Property owners may appeal the chief appraiser’s exemp-

tion determinations, including the denial of an exemption.

Taxing units, on the other hand, may appeal the granting of

an exemption to a property owner.

An individual property

owner may not, however, challenge the grant of an exemption

to another property owner. Only a taxing unit may challenge

the granting of an exemption.

Property is taxable unless the

owner shows that it meets all legal requirements for a total

exemption.

Exemption applications ask for most or all of the information

needed to decide an exemption issue. Most exemption cases

will depend on one or more of the following three issues: (1)

the owner’s eligibility; (2) the property’s qualications; or (3)

the property’s use.

Tex. Tax Code § 11.45

Tex. Tax Code § 41.41

Tex. Tax Code § 41.03

Tex. Tax Code § 11.01(a)

2 — Property Tax Exemptions

Owner’s Qualiﬁcations

Ownership requirements vary by exemption. Exemptions,

such as those for individuals or families (homestead or dis-

abled veterans’ exemptions), may require evidence of age,

physical condition or disability, military service, family rela-

tionship or other factors.

The date for determining most exemption qualications is

Jan. 1, but there are some exceptions. Certain exemptions are

determined immediately upon a change in life of the prop-

erty owner or by the chief appraiser on a property’s acquisi-

tion date.

January 1

The date for determining owner qualications for general

homestead exemptions is Jan. 1. Property receiving exemp-

tions for freeport, abatement, pollution control, historic or

archeological site, solar- and wind-powered energy devices,

offshore drilling rigs, water conservation initiatives and dis-

abled veterans must qualify on Jan. 1.

Immediate

Homeowners who reach age 65 or who become disabled dur-

ing a tax year, will qualify immediately for those exemptions,

as if the homeowner qualied on Jan. 1 of the tax year. In

addition, a surviving spouse age 55 or older may qualify for

the deceased spouse’s exemption, if the spouse dies in the

year that he or she reaches age 65. Disabled veterans or their

surviving spouses with homes donated by charitable organi-

zations, surviving spouses of U.S. armed services members

killed in action and surviving spouses of rst responders

killed or fatally injured in the line of duty also qualify im-

mediately for those exemptions, as if they qualied on Jan. 1

of the tax year.

Organizations qualifying for immediate exemption include

cemeteries, charitable organizations, religious organizations,

private schools, low-income housing organizations, youth

development associations, nonprot water supply and waste-

water service corporations, veteran’s organizations and other

nonprot organizations.

Tex. Tax Code § 11.43(d)

Tex. Tax Code § 11.42

Acquisition Date

When the state, a political subdivision of the state and other

qualifying organizations acquire property used for public

purposes, the chief appraiser determines the property’s ex-

emption qualications as of the acquisition date.

Property’s Qualiﬁcations and Use

Many exemptions apply only to specic classes of property.

The property owner must list all property subject to the ex-

emption and demonstrate that each property meets exemp-

tion requirements.

How and when the property owner uses the property is often

critical in determining exemption cases. An important factor

is whether a property’s use is exclusive, primary or incidental.

Chief Appraiser Determinations

The chief appraiser is responsible for (1) granting an exemp-

tion application; (2) disapproving an exemption application

and asking for more information; (3) modifying an exemp-

tion application; or (4) denying an exemption application. A

property owner is entitled to a written notice of a modica-

tion or the denial of an exemption application and may pro-

test such before an appraisal review board (ARB), if a protest

to the ARB is timely led.

A chief appraiser may deny an application for any number of

reasons. Denial of an exemption application can be because,

but not limited to, any of the following reasons:

• Property owner is not entitled to the exemption;

• The property does not qualify for an exemption;

• Documentation led with an exemption application does

not support the exemption;

• Exemption is not led timely;

• In the case of age 65 or older and disabled, only one ex-

emption may be claimed;

• Documentation led with a request for homestead exemp-

tion does not match the property address; or

• In the case of a residence, an exemption has already been

granted on another property.

Tex. Tax Code §§ 11.42 and 11.436

Tex. Tax Code § 11.45

Property Tax Exemptions — 3

Texas Property Tax

Types of Exemptions

Tax Code exemption requirements are extensive. Property

owners should read applicable statutes carefully. The Comp-

troller’s hardcopy publication annotated Property Tax Code

contains the text of the law and notes on signicant court cases.

The following is a short summary of selected exemption pro-

visions. Appendix B lists other exemptions authorized by the

Tax Code.

Residence Homestead

(Tax Code Section 11.13)

Most residential exemption court cases concern the owner’s

qualications for the exemption; whether the exemption cov-

ers specic improvements or amounts of land; or whether the

property is the principal residence of the owner. Appendix C

lists mandatory and local option residence homestead exemp-

tions, their amounts and the applicable taxing units.

General Residence Homestead

Texas law requires school districts to offer a $25,000 exemp-

tion on residence homesteads.

Any taxing unit, including a

city, county, school district or special district, has the option

of deciding locally to offer a separate residence homestead

exemption of up to 20 percent of a property’s appraised value,

but not less than $5,000.

Counties are also required to of-

fer a $3,000 exemption if the county collects farm-to-market

roads or ood control taxes.

There are no specic qualications for the general homestead

exemption other than the owner has an ownership interest in

the property and uses the property as the owner’s principal

residence.

However, an applicant is required to state that the

applicant does not claim an exemption on another residence

Tex. Tax Code § 11.13(b)

Tex. Tax Code § 11.13(n)

Tex. Tax Code § 11.13(a)

Tex. Tax Code § 11.13(j)(1)

homestead in or outside of Texas. The application must in-

clude a copy of the applicant’s driver’s license or state iden-

tication card. This requirement does not apply to a resident

of a facility that provides services related to health, inrmity,

or aging; or to applicants who are certied for participation

in the Attorney General’s Address Condentiality Program.

A chief appraiser is prohibited by law from allowing a home-

stead exemption unless the address on the identication pro-

vided corresponds to the address of the property for which

the exemption is claimed. A chief appraiser may waive this

requirement for an active duty U.S. armed services member or

the spouse of an active duty service member if the application

includes a copy of the military identication card and a copy

of a utility bill for the residence homestead. A chief appraiser

also may waive the requirement if the applicant holds specic

driver’s license issued for judges and the spouses of judges or

peace ofcers and includes with the application a copy of the

application for that license.

Normally the exemption applies to those portions of the

house actually used as a residence, as opposed to business

or other use.

The homestead includes up to 20 acres of land

and any improvements used for residential purposes.

The home must be the principal residence of the applicant.

A qualied homeowner does not lose his or her homestead

exemption if the homeowner does not establish a different

principal residence, intends to return and occupy the resi-

dence and is temporarily absent for a period of less than two

years. The law provides that homeowners in military service

inside or outside the United States or in a facility providing

services related to health, inrmity or aging may be away

from the home longer than two years and still keep the home-

stead exemption. The two-year limit does not apply to these

homeowners.

Tex. Tax Code § 11.43(j)

Tex. Tax Code § 11.43(n) and (p)

Tex. Tax Code § 11.13(k)

Tex. Tax Code § 11.13(j)(1)

Tex. Tax Code § 11.13(l)

4 — Property Tax Exemptions

Age 65 or Older or Disabled

Texas law requires school districts to offer an additional

$10,000 residence homestead exemption to persons age 65 or

older or disabled.

Any taxing unit, including a city, county,

school district or special district, has the option of deciding

locally to offer a separate residence homestead exemption for

persons age 65 or older or disabled in an amount not less than

$3,000.

To qualify for the mandatory and local option exemption for

persons age 65 or older, the owner must be age 65 or older

and live in the house.

If the age 65 or older homeowner

dies, the surviving spouse may continue to receive the local

option exemption if the surviving spouse is age 55 or older at

the time of death and lives in and owns the home and applies

for the exemption.

A disabled person must meet the denition of disabled for the

purpose of payment of disability insurance benets under the

Federal Old-Age, Survivors and Disability Insurance Act.

homeowner does not have to meet the denition of disabled

or age 65 or older on Jan. 1 of the tax year, but may qualify

as disabled or age 65 or older at any time during the tax year.

The exemption applies to the entire tax year as if the person

was disabled or age 65 on Jan. 1.

If these applicants are not

specically identied on a deed or other recorded instrument,

they must provide an afdavit or other compelling evidence

of ownership.

The trustor of a qualifying trust may qualify for the residence

homestead exemption. A residence owned by an individual

through an interest in a qualifying benecial trust and oc-

cupied by such individual as a trustor or beneciary of the

trust may qualify. An owner’s surviving spouse who has a

life estate in a residence may also qualify the property for a

residence homestead exemption.

The Tax Code places a ceiling on school taxes for residence

homesteads owned by p ersons who a re age 65 a nd older or d is-

abled. The tax ceiling continues for age 55 or older surviving

Tex. Tax Code § 11.13(c)

Tex. Tax Code § 11.13(d)

Tex. Tax Code § 11.13(c) and (d)

Tex. Tax Code § 11.13(q)

Tex. Tax Code § 11.13(m)(1)

Tex. Tax Code § 11.42(c)

Tex. Tax Code § 11.43(o)

spouses of age 65 or older owners who die while qualied for

the tax ceiling. These homeowners may also transfer the per-

cent of tax paid, based on their ceiling, when they purchase

another home and use it as their principal residence.

A county, city or junior college district can offer a tax limita-

tion on homesteads of taxpayers who are disabled or age 65

or older.

The taxing unit’s governing body may adopt the

limitation or citizens in the taxing unit by petition and elec-

tion may adopt the limitation.

Once adopted, the Tax Code

provides for the tax ceiling for disabled and age 65 or older

homeowners and their right to transfer to another homestead

in that taxing unit the same benet of that tax ceiling. It also

provides for surviving spouses age 55 or older to retain the

tax ceiling.

Manufactured and Cooperative Housing

Manufactured homes may qualify for homestead exemptions.

For a manufactured home to qualify as a residential home-

stead, the owner must follow detailed provisions concerning

a statement of ownership.

A property owner may also receive a homestead exemption

for cooperative (co-op) housing.

Upon receiving a request

from the co-op, the chief appraiser must separately appraise

and list each individual stockholder’s interest. Each stock-

holder whose interest is separately appraised may protest and

appeal the appraisal like any other property owner.

Uninhabitable or Unstable

If a qualied residential structure for which the owner re-

ceives an exemption is rendered uninhabitable or unusable

by a casualty or by wind or water damage, the owner may

continue to receive the exemption. The exemption for the

structure and the land and improvements used in the residen-

tial occupancy of the structure while the owner constructs a

replacement qualied residential structure on the land con-

tinues if the owner does not establish a different principal

residence for which the owner receives an exemption during

that period and intends to return and occupy the structure as

the owner’s principal residence.

Tex. Tax Code § 11.26(a), (g) and (i)

Tex. Tax Code § 11.261(a)

Tex. Const. art. VIII, § 1-b(h)

Tex. Tax Code § 11.261(g) and (i)

Tex. Tax Code § 11.432

Tex. Tax Code § 11.13(o)

Tex. Tax Code § 23.19(b)

Tex. Tax Code § 11.135

Tex. Tax Code § 11.13(j)(1)(D) and (j)(2)

Property Tax Exemptions — 5

To continue to receive the exemption, the owner must begin

active construction of the replacement qualied residential

structure or other physical preparation of the site on which

the structure is to be located not later than one year after the

owner ceases to occupy the former qualied residential struc-

ture as the owner’s principal residence. The owner may not

receive the exemption for that property under these circum-

stances for more than two years. The site of a replacement

qualied residential structure is considered under physical

preparation if the owner has engaged in architectural or engi-

neering work, soil testing, land clearing activities or site im-

provement work necessary for the construction of the struc-

ture or has conducted an environmental or land use study

relating to the construction of the structure.

Veterans’ Exemptions (Tax Code

Sections 11.131, 11.132, 11.133,

11.22 and 11.23(a))

Partial Exemption

Texas law provides partial exemptions for any property

owned by disabled veterans and surviving spouses and chil-

dren of deceased disabled veterans.

It also provides a partial

exemption for residence homesteads donated at no cost or not

more than 50 percent of the good faith estimate of its market

value to disabled veterans by charitable organizations that

extends to surviving spouses who have not remarried. The

amount of exemption is determined according to percentage

of service-connected disability.

Total Exemption

A surviving spouse of a member of the U.S. armed services

killed in action is allowed a total property tax exemption on

his or her residence homestead if the surviving spouse has not

remarried since the death of the armed services member.

A disabled veteran who receives 100 percent disability com-

pensation due to a service-connected disability and a rating

of 100 percent disabled or individual unemployability from

the United States Department of Veterans Affairs is entitled

to an exemption from taxation of the total appraised value of

the veteran’s residence homestead.

If these veterans qualify

Tex. Tax Code § 11.135

Tex. Tax Code § 11.22

Tex. Tax Code § 11.132

Tex. Tax Code § 11.133

Tex. Tax Code § 11.131

for the exemption after Jan. 1 of a tax year, they receive an

exemption for the applicable portion of that year immediately

upon qualifying for the exemption. Likewise, if the property

no longer qualies in a year, the exemption is removed for

that portion of the year.

The 100 percent disabled veteran exemption extends to a sur-

viving spouse who was married to a disabled veteran who

qualied or would have qualied for this exemption if it had

been in effect at the time of the veteran’s death. To be entitled

to this exemption, the surviving spouse must not have remar-

ried; the property was the residence homestead of the surviv-

ing spouse when the veteran died; and the property remains

the residence homestead of the surviving spouse.

If the surviving spouse is eligible for the exemption and then

qualies a different property as a residence homestead, the

surviving spouse is entitled to the same dollar amount of the

former exemption that was last received at the former home-

stead. The surviving spouse cannot remarry to receive the

subsequent exemption. The chief appraiser of the county in

which the former residence was located must provide to the

surviving spouse a written certicate so that the amount of

the exemption on the subsequent qualied homestead can be

determined.

The chief appraiser is also required, under Tax Code Section

11.431 to accept and approve or deny an application for the

surviving spouse after the deadline for ling has passed, if the

application for the exemption is led not later than two years

after the delinquency date for the taxes on the homestead.

Veterans Organizations

Property owned by a veterans organization is exempt. Quali-

ed veterans’ organizations are dened as non-prot organi-

zations composed primarily of members or former members

of the armed forces of the United States or its allies and that

are chartered or incorporated by the U.S. Congress.

Tex. Tax Code §§ 11.42, 26.10(c) and 26.1125

Tex. Tax Code § 11.131

Tex. Tax Code §§ 11.131

Tex. Tax Code § 11.431

Tex. Tax Code § 11.23(a)

6 — Property Tax Exemptions

Surviving Spouse of First Responder

(Tax Code Section 11.134)

Texas law provides a total property tax exemption for the res-

idence homestead of a surviving spouse of a rst responder

killed or fatally injured in the line of duty if the surviving

spouse has not remarried since the rst responder’s death.

This exemption applies regardless of the date of the rst

responder’s death. If the surviving spouse is eligible for the

exemption and then qualies a different property as a resi-

dence homestead, the surviving spouse is entitled to the same

dollar amount of the former exemption that was last received

at the former homestead. The chief appraiser of the county

in which the former residence was located must provide to

the surviving spouse a written certicate so that the exemp-

tion amount on the subsequent qualied homestead can be

determined.

Charitable Organizations Generally

(Tax Code Section 11.18)

Property owned by qualied charitable organizations is ex-

empt. An organization must meet requirements regarding

how it is organized, what it does and how it uses its property.

The organization is limited to charitable activities that are

listed in Tax Code Section 11.18.

Exemptions for charitable organizations require the proper-

ty owner to have a charter or bylaws dedicating property to

particular purposes and providing for disposition of property

upon dissolution.

The bylaws must pledge the group’s prop-

erties to charitable purposes. The organization may not allow

anyone to realize private gain from the organization’s activi-

ties.

In some cases, particularly involving medical care fa-

cilities, children’s homes and nursing homes, questions may

involve whether the institution serves people who cannot pay

for services as well as those who can.

The exemption applies to property (buildings and land on

which the buildings are located and personal property) owned

by the charitable organization. The property must be used

exclusively by the organization or other equally qualied or-

ganizations. If part of the property is leased to or used by a

Tex. Tax Code § 11.134

Tex. Tax Code § 11.18

Tex. Tax Code § 11.18(f)

Tex. Tax Code § 11.18(e)

nonqualied person or business, the other use must be limited

to activities that benet the people the organization serves.

Community Land Trusts (Tax Code

Section 11.1827)

Real and personal property owned by a community land

trust for the purpose of providing affordable housing for low-

income and moderate-income residents, promoting resident

ownership of housing, keeping housing affordable for future

residents, and capturing the value of public investment for

long-term community benet is exempt.

The exemption must

be adopted by the governing body of the taxing unit before

July 1.

Once the exemption is allowed, it does not have to be

claimed in subsequent years unless the ownership changes or

the person’s qualications for the exemption changes.

To receive the exemption, the trust must meet certain require-

ments of a charitable organization; own the land for the pur-

pose of leasing it and selling or leasing housing units located

on the land; and engage exclusively in the sale or lease of

housing as provided for in the Local Government Code Sec-

tion 373B.002. The trust must also conduct an annual audit

by an independent auditor and report the results of the au-

dit to the local governing body and the chief appraiser. The

property cannot be exempted after the third year on which

the trust acquired the property unless the trust is offering to

sell or lease the property or is leasing the property according

to Local Government Code Chapter 373B.

Primarily Charitable Organizations

(Tax Code Section 11.184)

Real and personal property owned by organizations engaged

primarily in performing charitable functions is exempt. Be-

fore applying for an exemption with the appraisal district, an

organization must obtain from the Comptroller’s ofce a de-

termination letter stating the organization is engaged primar-

ily in performing charitable functions. The chief appraiser

must accept a Comptroller’s ofce determination letter as

conclusive evidence that the organization engages primarily

in performing charitable functions and is eligible for exemp-

tion. The chief appraiser determines if the organization uses

Tex. Tax Code § 11.18

Tex. Tax Code § 11.1827 and Tex. Loc. Gov’t Code § 373B.004

Tex. Tax Code § 11.1827

Tex. Tax Code § 11.43(c)

Tex. Tax Code § 11.1827

Property Tax Exemptions — 7

its property for its charitable purposes. An organization is

required to obtain a new Comptroller’s ofce determination

letter every fth year after the exemption is granted. To im-

plement the determination process, the Comptroller’s ofce

has adopted rules and prescribed a form for applying for a

determination letter.

The exemption also applies to partially complete improve-

ments or for physical preparation. The exemption for incom-

plete improvements lasts for three years.

Religious Organizations (Tax Code

Section 11.20)

Places of religious worship and clergy residences owned by

qualied religious groups are exempt. Religious organiza-

tions must be organized and operated primarily for religious

worship or the spiritual welfare of individuals. The religious

organization must meet requirements similar to those im-

posed on charitable and youth organizations.

Generally, if an organization qualies under this section, it

may exempt property of the following types: actual places

of religious worship, personal property used at the place of

worship, residences for clergy and personal property used at

the residences. A religious organization may use its assets in

performing its functions or the functions of another religious

organization.

Public property owned by the state or a taxing unit and leased

to a religious organization may receive the religious organi-

zation exemption if the property is used as a place of regular

religious worship and meets other requirements of the Tax

Code. The religious organization applies and takes other ac-

tion relating to the exemption as if the organization owned

the p roper t y.

A property owned by a religious organization and leased for

use as a school may be exempt as a school. A religious or-

ganization’s land held for expanding or constructing a place

of worship may be exempt, so long as the land produces no

revenue during the holding period. The land exemption has a

Tex. Tax Code § 11.20

Tex. Tax Code § 11.20(c)

Tex. Tax Code § 11.21

Tex. Tax Code § 11.184

Tex. Tax Code § 11.20

limit of six years for contiguous property and three years for

non-contiguous property.

The exemption also applies to partially complete improve-

ments or for physical preparation. The exemption for incom-

plete improvements lasts for three years.

Exemptions for religious organizations require the property

owner to have a charter or bylaws dedicating property to par-

ticular purposes and providing for disposition of property

upon dissolution.

Private Schools (Tax Code Section

11.21)

The school exemption applies to property used for school

purposes. As with charitable and religious organizations, the

school must use its assets in performing its function or the

function of another educational organization.

A property

owned by a religious organization and leased for use as a

school may be exempt as a school.

The exemption also applies to partially complete improve-

ments or for physical preparation. The exemption for incom-

plete improvements lasts for three years.

Exemptions for private schools also require the property

owner to have a charter or bylaws dedicating property to

particular purposes and providing for disposition of property

upon dissolution.

Public Property (Tax Code Section

11.11)

To qualify for the public property exemption, the state of

Texas or a political subdivision of the state must own the

property. The property must be used for public purposes

such as the health, comfort and welfare of the public. State-

owned property is taxable if it is rented to a private busi-

ness that uses it for something inconsistent with the agency’s

duties. The property may not be used to provide housing to

8 — Property Tax Exemptions

the public other than students or agency employees. However,

if an educational institution uses the property primarily for

instructional purposes and secondarily for residences, the

property is exempt. Additionally, property held for the benet

of a state junior college, college or university is exempt under

the same conditions.

Property of a higher education development foundation or an

alumni association located on land owned by the state for

the support, maintenance or benet of a state institution of

higher education is exempt provided that the foundation or

organization meets the requirement. The organization must

be organized exclusively to operate programs or perform

activities for the benet of institutions of higher education.

Finally, the property must be used exclusively for those pro-

grams or activities.

An improvement is considered owned by the state and prop-

erty used for public purposes if it is located on land owned

by the Texas Department of Criminal Justice, leased and used

Tex. Tax Code § 11.11

by the department and subject to a lease-purchase agreement

providing that legal title to the improvement will pass to the

department at the end of the lease term.

Tangible personal property leased to the state or a political

subdivision is exempt if the property is subject to a lease-

purchase agreement providing that the state or political sub-

division takes legal title to the property at the end of the lease

term. The exemption ends 30 days after the lease terminates

if the state or political subdivision does not take title to the

personal property.

Real and personal property owned by a nonprot corporation

engaged primarily in providing chilled water and steam to

certain health-related facilities is exempt. The corporation’s

property would be considered as if it were owned by the state

and used for health and education purposes. Certain facilities

related to transportation leased to a private entity to provide

transportation or for utility purposes are also exempt.

Tex. Tax Code § 11.11

Property Tax Exemptions — 9

Appendix A

Tax Code Exemption General Application Provisions

No Application Required

Tax Code Section Exemption

11.11 Public Property

11.12 Federal Exemptions

11.14 Tangible Personal Property Not Producing Income

11.145 Income-Producing Tangible Personal Property Having Value Less Than $500

11.146 Mineral Interest Having Value of Less than $500

11.15 Family Supplies

11.16 Farm Products

11.161 Implements of Husbandry

11.25 Marine Cargo Containers Used Exclusively in International Commerce

Annual Application Required

Tax Code Section Exemption

11.111 Public Property Used to Provide Transitional Housing for Indigent Persons

11.1801 Charity Care and Community Beneﬁts Requirements for Charitable Hospital

11.181 Charitable Organizations Improving Property for Low-Income Housing

11.1825 Organizations Constructing for Rehabilitating Low-Income Housing: Property Not Previously

Exempt (Note: See provisions of 11.1826)

11.184 Organizations Engaged Primarily in Performing Charitable Functions (Note: Reapplication

required every ﬁfth tax year instead of annually.)

11.185 Colonia Model Subdivision Program

11.23(b)-(g), (i), (k) or (l) Miscellaneous Exemptions: Federation of Women’s Clubs; Nature Conservancy of Texas;

Congress of Parents and Teachers; Private Enterprise Demonstration Associations; Bison, Buﬀalo

and Cattalo; Theater Schools; Community Service Clubs; Scientiﬁc Research Corporations; and

Incomplete Improvements

11.24 Historic Sites

11.251 Tangible Personal Property Exempt

11.252 Motor Vehicles Leased for Personal Use

11.253 Tangible Personal Property in Transit

11.28 Property Exempted from City Taxation by Agreement

11.311 Landﬁll-Generated Gas Conversion Facilities

11.32 Certain Water Conservation Initiatives

10 — Property Tax Exemptions

One-Time Application Required, Unless Requested by Chief Appraiser

Tax Code Section Exemption

11.13 Residence Homestead

11.131 Residence Homestead of 100 Percent or Totally Disabled Veteran

11.132 Donated Residence Homestead of Partially Disabled Veteran

11.133 Residence Homestead of Surviving Spouse of Member of Armed Forces Killed in Action

11.134 Residence Homestead of Surviving Spouse of First Responder Killed in Line of Duty

11.17 Cemeteries

11.18 Charitable Organizations

11.182 Community Housing Development Organizations Improving Property for Low-Income and

Moderate-Income Housing: Property Previously Exempt (Note: See provisions of 11.182(e)(3),

11.182(g) and 11.1826)

11.1827 Community Land Trust

11.183 Association Providing Assistance to Ambulatory Health Care Centers

11.19 Youth Spiritual, Mental and Physical Development Associations

11.20 Religious Organizations

11.21 Schools

11.22 Disabled Veterans

11.23(a), (h), (j), (j-1) or (m) Miscellaneous Exemptions: Veterans Organizations; County Fair Associations; Medical Center

Development; Medical Center Development in Populous Counties; and National Hispanic

Institute

11.231 Nonproﬁt community Business Organization Providing Economic Development Services to

Local Community

11.254 Motor Vehicle Used for Production of Income and for Personal Activities

11.27 Solar and Wind-Powered Energy Devices

11.271 Oﬀshore Drilling Equipment Not in Use

11.30 Nonproﬁt Water Supply or Wastewater Service Corporation

11.31 Pollution Control Property

11.315 Energy Storage System in Nonattainment Area

11.33 Raw Cocoa and Green Coﬀee Held in Harris County

11.437 Exemption for Cotton Stored in Warehouse

Property Tax Exemptions — 11

Appendix B

Other Property Tax Code Exemption Summaries

Type Tax Code Section Summary

Public property used to

provide transitional housing

for the indigent

11.111 This section exempts property owned by the United States or a federal

agency and used to provide transitional housing to the poor under a program

operated by the U.S. Department of Housing and Urban Development. The

property is exempted only by ordinance or order of the taxing units in which

the property is located.

Federal exemptions 11.12 Property exempt from ad valorem taxation under federal law is exempt from

taxation.

Tangible personal property

not used to produce income

11.14 Generally, all tangible personal property, other than manufactured homes,

that is not held or used for production of income is exempt from property

taxes. However, the governing body of a taxing unit may, by oﬃcial action,

continue to tax property other than family supplies, household goods or

personal eﬀects. A structure that is substantially aﬃxed to real estate and is

used or occupied as a residential dwelling is taxable. The term structure does

not include trailer-type vehicles designed primarily for use as temporary living

quarters in connection with recreational, camping, travel or seasonal use.

Income-producing tangible

personal property and

mineral interest property

having value of less than

$500

11.145 and 11.146 An owner’s personal property used to produce income is aggregated to

determine if the owner’s total taxable value in each separate taxing unit is

less than $500 and is exempt. The taxable value of a property owner’s mineral

interests is aggregated to determine if the taxable value within each taxing

unit is less than $500 and is exempt.

Family supplies 11.15 A family is entitled to an exemption from taxation of its family supplies for

home or farm use.

Farm products 11.16 Livestock, poultry, agricultural products, eggs and some nursery products

are exempt when they are still in the hands of the person who raised them.

Nursery products are exempt only if they are still growing on Jan. 1. Livestock,

poultry and eggs must be owned by the person who is paying for their care

on Jan. 1. Farm products include standing timber or timber that has been

harvested and on Jan. 1 is located on the real property on which it was

produced and is under the ownership of the person who owned the timber

when it was standing.

Implements of husbandry 11.161 Machinery and equipment used for farming, ranching and timber production,

regardless of primary design, is exempt.

Cemeteries 11.17 Cemetery property is exempt. The property must be used exclusively for

human burial. The property may not be held for proﬁt.

12 — Property Tax Exemptions

Type Tax Code Section Summary

Charity care and community

beneﬁts requirements for

charitable hospital

11.1801 To qualify as a charitable organization under Tax Code Section 11.18(d)

(1), a nonproﬁt hospital or hospital system must provide charity care and

community beneﬁts as follows: (1) at a level that is reasonable in relation

to the community needs, as determined through the community needs

assessment, the available resources of the hospital or hospital system, and

the tax-exempt beneﬁts received by the hospital or hospital system; (2) in

an amount equal to at least 4 percent of the hospital’s or hospital system’s

net patient revenue; (3) in an amount equal to at least 100 percent of the

hospital’s or hospital system’s tax-exempt beneﬁts, excluding federal income

tax; or (4) in a combined amount equal to at least 5 percent of the hospital’s

or hospital system’s net patient revenue, provided that charity care and

government-sponsored indigent health care are provided in an amount equal

to at least 4 percent of net patient revenue.

Charitable organization

improving property for low-

income housing

11.181 A charitable organization improving property for low-income housing is

exempt if it meets the Tax Code requirements and uses volunteer labor to

build or repair housing for sale, without proﬁt, to a low-income individual or

family. Each property may be exempt for a maximum of ﬁve years after the

property’s acquisition date. Property that received an exemption based on its

ownership by an organization that constructs or rehabilitates property and

uses the property to provide aﬀordable, low-income housing and that was

subsequently transferred by that organization to a charitable organization

is not exempted after the ﬁfth year it was transferred. If the organization

sells the property to an individual or family that is not low income, the

chief appraiser enters a penalty in the appraisal records and notiﬁes the

organization and the buyer. The penalty is equal to the taxes that would have

been imposed in each year the property was exempt plus 12 percent interest.

Community housing

development organizations

(CHDOs) improving

property for low-income

and moderate-income

housing (property previously

exempt)

11.182 Improved or unimproved real property owned by an organization under Tax

Code Section 11.182 is exempt if certain requirements are met. The statute

applies to CHDOs (as provided under 42 U.S.C. §12704) meeting requirements

of charitable organizations under Tax Code Section 11.18(e) and (f) and

engaging exclusively in building or repairing property for sale or rent without

proﬁt to low-income or moderate-income individuals or families and related

activities. An organization may qualify for an exemption only if it received an

exemption under Tax Code Section 11.182 for the subject property for any

part of the 2003 tax year. The statute includes restrictions on eligibility and

requirements pertaining to, under speciﬁed conditions, the number of years

property may be exempted, exemption in subsequent years for multifamily

rental property of 36 or more dwelling units, certain property constructed

after Dec. 31, 2001, property used for administrative purposes, property

acquired or sold during the preceding year, and change in ownership. The

statute includes requirements for preparation and delivery of annual audits.

Property Tax Exemptions — 13

Type Tax Code Section Summary

Organizations constructing

or rehabilitating low-income

housing property not

previously exempt

11.1825 Real property owned by an organization under Tax Code Section 11.1825

is exempt if certain requirements are met. Generally, the statute applies to

organizations constructing or rehabilitating and using to provide housing to

individuals or families meeting certain income eligibility requirements and

exemption is prohibited for housing projects constructed by an organization

if construction was completed before Jan. 1, 2004. The statute provides for an

exemption of 100 percent of appraised value of single-family dwellings subject

to sale and, for multi-family or single-family dwellings subject to rental, an

exemption of 50 percent of appraised value unless otherwise provided by a

the governing body of a taxing unit any part of which is located in a county

with a population of at least 1.8 million. An organization may not receive an

exemption from a taxing unit located in a county with a population of at least

1.8 million unless the exemption is approved by the taxing unit’s governing

body. Under such circumstances, the statute sets forth a process by which an

organization must submit a written request for exemption approval to a taxing

unit’s governing body and the governing body must take speciﬁed action on

the request and, if the taxing unit approves the exemption, the chief appraiser

must still make a determination that the property qualiﬁes for an exemption.

The statute includes restrictions on eligibility and requirements pertaining to,

under speciﬁed conditions, status, history, policies, and board composition

of the organization, income eligibility, housing project square footage

reservation for certain individuals or families, rent, property owned for purposes

of rehabilitation, transfer of property and change of ownership, appraisal

requirements, and public notice of capitalization rates. Tax Code Section

11.1826 includes requirements for preparation and delivery of annual audits.

Charitable associations

providing assistance to

ambulatory health care

centers

11.183 An organization that assists ambulatory health care centers is exempt if it is

exempt from federal income tax; is funded by a grant under the Federal Public

Health Service §330; does not perform abortions or provide abortion services;

and meets other Tax Code requirements.

Colonia Model Subdivision

Program

11.185 Unimproved real property owned by an organization under the colonia model

subdivision program is entitled to an exemption if the organization meets the

requirements of Tax Code Section 11.18(e) and (f); purchased the property or

is developing the property with proceeds of a loan from Texas Department

of Housing and Community Aﬀairs; and owns the property for the purpose

of developing a model colonia subdivision. Buildings and tangible personal

property used for administration can also qualify for an exemption. Penalty

with 12 percent annual interest may be assessed under certain circumstances

if the property is sold.

Youth spiritual, mental

and physical development

associations

11.19 The property of qualiﬁed youth development groups aﬃliated with a state

or national organization is exempt. A youth development association may

use its property in performing its functions or the functions of another youth

development organization. The exemption also applies to partially complete

improvements or physical preparation. The exemption for incomplete

improvements lasts only three years.

Miscellaneous exemptions 11.23 The miscellaneous exemptions apply to speciﬁc entities, such as veteran’s

organizations, theater schools and medical center development, as well other

exemptions. See the Tax Code for more information.

14 — Property Tax Exemptions

Type Tax Code Section Summary

Nonproﬁt community

business organization

providing economic

development services to

local community

11.231 An association that qualiﬁes as a nonproﬁt community business organization

is entitled to an exemption from taxation of buildings and tangible personal

property it owns and uses exclusively to perform its primary functions. The

exemption also applies to real property owned by the organization consisting

of an incomplete improvement that is under active construction or other

physical preparation and is designed and intended to be used exclusively by

qualiﬁed nonproﬁt community business organizations. It also applies to the

land on which the incomplete improvement is located that will be reasonably

necessary for the use of the improvement.

Use of exempt property by non-qualiﬁed nonproﬁt community business

organizations does not result in the loss of an exemption if the use is

incidental to use by qualiﬁed nonproﬁt community business organizations

and limited to activities that beneﬁt the beneﬁciaries of the nonproﬁt

community business organizations that own or use the property.

Historic or archeological

sites

11.24 To qualify for the historic or archeological site exemption, a structure must be

designated a historic building or archeological site and the taxing unit must

vote to grant an exemption. The structure must be designated as a Recorded

Texas Historic Landmark by the Texas Historical Commission or the taxing unit

must designate it as historically signiﬁcant and in need of tax relief. The taxing

unit decides the amount of the exemption.

Marine cargo containers

used exclusively in

international commerce

11.25 Marine cargo containers used exclusively in international commerce are

exempt. A marine cargo container is a container used to transport goods

by ship, readily handled without reloading to transfer from one mode of

transport to another and used repeatedly. The deﬁnition also includes

a container that is fully or partially enclosed, has an open top suitable

for loading or consists of a ﬂat rack suitable for securing goods onto the

container. The exemption is limited to property owned by a citizen or entity of

a foreign country and taxed in a foreign country.

Goods exported from Texas 11.251 The Tax Code provides for a freeport exemption to implement Art. VIII, Sec. 1-j

of the Texas Constitution which exempts goods, wares, ores, merchandise and

other tangible property, other than oil, gas and petroleum products (deﬁned

as liquid and gaseous materials immediately derived from reﬁning petroleum

or natural gas) and aircraft or repair parts used by a certiﬁed air carrier. The

freeport goods qualify if they leave Texas within 175 days of the date they are

brought into or acquired in the state. Freeport goods that are aircraft parts may

qualify if they leave the state within 730 days of being acquired or brought into

the state, but this extension requires oﬃcial action by the taxing unit.

Leased vehicles for personal

use

11.252 Motor vehicles (passenger cars or trucks with a shipping weight of not

more than 9,000 pounds) leased for personal use are exempt. Personal use

means 50 percent or more of its use, based on mileage, is for activities that

do not involve the production of income. By rule, the Comptroller’s oﬃce

has established exemption application requirements and procedures to

determine whether a vehicle qualiﬁes. The lessee completes a Comptroller-

adopted form certifying under oath that the vehicle is not primarily used for

the production of income. The owner (lessor) maintains the lessee executed

forms for inspection and copying by the appraisal district. The owner renders

nonexempt vehicles for taxation and provides the chief appraiser with an

additional list of all leased vehicles. A city, by ordinance adopted before Jan. 1,

2002, may tax personal-use leased vehicles.

Property Tax Exemptions — 15

Type Tax Code Section Summary

Tangible personal property

in transit

11.253 The Tax Code provides for an exemption for goods-in-transit to implement

Art. VIII, Sec. 1-n of the Texas Constitution. Goods in transit are goods acquired

inside or outside the state, stored under a bailment contract by a public

warehouse operator at one or more public warehouse facilities that are not

in any way owned or controlled by the owner of the property who acquired

or imported the property and then shipped to another location in or out of

this state within 175 days. The goods do not include oil, gas or petroleum

products or special inventories such as motor vehicles in a dealer’s retail

inventory. To tax goods in transit, taxing units must take oﬃcial action.

Motor vehicle used for

production of income and

for personal activities

11.254 One passenger car or light truck, if it is owned by an individual and used in

the individual’s business or profession and also used for personal activities,

is exempt. The exemption does not apply to vehicles used to transport

passengers for hire.

Solar- and wind-powered

energy devices

11.27 Persons who install a solar- or wind-powered energy device to produce

energy for onsite use are entitled to exempt the amount of value the device

contributes to their property.

Oﬀshore drilling rigs 11.271 Oﬀshore drilling rigs that are stored in a county bordering the Gulf of Mexico

or a bay or other body of water immediately adjacent to the Gulf of Mexico

are exempt. Drilling rigs are exempt only if they are stored for a purpose other

than repair and are not used for drilling. They must be designed for oﬀshore

drilling. Personal property that is used or part of an oﬀshore spill response

system is exempt if the system is being stored while not in use in a county

bordering the Gulf of Mexico or a bay or other body of water immediately

adjacent to the Gulf of Mexico. Certain ownership requirements apply.

Personal property used in connection with the exploration or production of

oil or gas is not exempt as an oﬀshore spill response containment system.

Tax abatement 11.28 Property owners who have entered redevelopment and tax abatement

agreements with local taxing units under Tax Code Chapter 312 are allowed to

exempt all or part of the property’s value from taxation.

Nonproﬁt water supply

or wastewater service

corporations

11.30 Property owned and reasonably necessary for a nonproﬁt water supply or

wastewater service corporation’s functions is exempt. The exemption also

applies to partially complete improvements or for physical preparation. The

exemption for incomplete improvements lasts for three years.

Pollution control 11.31 Property acquired after Jan. 1, 1994 and used for pollution control may

receive an exemption. The exemption applies to all or part of real and

personal property used solely or partly as a facility, device or method to

control air, water or land pollution. The exemption also applies to an extensive

list of clean energy technologies that are used to control pollution. The

Texas Commission on Environmental Quality (TCEQ) is required to adopt

rules to create a list of facilities, devices or methods to control pollution that

are eligible for exemption. Property not eligible for the exemption includes

residential; park or scenic land; vehicles; property subject to a tax abatement

agreement before Jan. 1, 1994; and property owned by a person or company

that manufactures pollution control equipment or provides pollution

control services. To qualify for a use determination, the person or company

must apply to TCEQ for a permit or permit exemption. TCEQ notiﬁes the

chief appraiser about the application and determines the proportion of the

property that is used for pollution control. Then, TCEQ issues a determination

letter to the applicant. The property owner sends the letter with the

exemption application to the appraisal district. The chief appraiser must

accept the letter’s determination as conclusive evidence for the exemption.

16 — Property Tax Exemptions

Type Tax Code Section Summary

Landﬁll-generated gas

conversion facilities

11.311 A person is entitled to an exemption on personal property that is located on

or in close proximity to a landﬁll and is used to collect gas generated by the

landﬁll; compress and transport the gas; process the gas; and deliver the gas.

This property is considered used as a facility, device or method for the control

of air, water or land pollution.

Energy storage system in

nonattainment area

11.315 Energy storage systems used, constructed, acquired or installed to meet or

exceed air pollution laws, rules and regulations is exempt if the governing

body of the taxing unit provides for the exemption by oﬃcial action. It must

be in an area designated as non-attainment; be in a municipality with a

population of at least 100,000 adjacent to a municipality with a population

of more than two million; have 10 megawatt capacity; and be installed on or

after Jan. 1, 2014.

Certain water conservation

initiatives

11.32 Property designated by a taxing unit as property upon which approved local

initiatives have been implemented may be exempt. The taxing unit may

exempt part or all of the value of property with approved water conservation,

desalination or brush control initiatives. The taxing unit’s governing body

must designate approved initiatives by adopting an ordinance or other law.

Raw cocoa and green coﬀee

held in Harris County

11.33 This section exempts all raw cocoa and green coﬀee held in Harris County.

The owner need not claim the exemption, once granted, in subsequent years

unless requested by the chief appraiser.

Cotton Stored in Warehouse 11.437 A person who operates a warehouse used primarily for the storage of cotton

for transportation outside of Texas may apply for an exemption under Tax

Code Section 11.251 for the cotton stored in the warehouse on behalf of

all the owners of the cotton. The cotton must be eligible for a freeport

exemption under Tax Code Section 11.251 and is presumed to have been

transported outside of Texas not later than 175 days after the date the cotton

was acquired or imported into Texas.

Property Tax Exemptions — 17

Appendix C

Residence Homestead Exemptions

Exemption

Tax Code

Section Taxing Unit

Total or

Partial

Mandatory or

Local Option Amount

General Residence

Homestead 11.13(b) School Districts Partial Mandatory $25,000

General Residence

Homestead 11.13(n)

Cities, Counties, School

Districts or Special Districts Partial Local Option

An amount up to 20

percent of the property’s

value, but not less than

$5,000

Farm-to-Market

Roads or Flood

Control (if collected) 11.13(a) Counties Partial

Mandatory (if

collected) $3,000

Age 65 or Older or

Disabled 11.13(c) School Districts Partial Mandatory $10,000

Age 65 or Older or

Disabled 11.13(d)

Cities, Counties, School

Districts or Special Districts Partial Local Option

An amount adopted by

the taxing unit, but no

less than $3,000

Disabled Veterans 11.22

Cities, Counties, School

Districts and Special Districts Partial Mandatory

An amount determined

by the percentage of

service-connected

disability

Disabled

Veterans with

Homes Donated

by Charitable

Organizations 11.132

Cities, Counties, School

Districts and Special Districts Partial Mandatory

An amount determined

by the percentage of

service-connected

disability

100 Percent

Disabled Veterans 11.131

Cities, Counties, School

Districts and Special Districts Total Mandatory

100 percent of the

property’s value

Surviving Spouse of

U.S. Armed Services

Member Killed in

Action 11.133

Cities, Counties, School

Districts and Special Districts Total Mandatory

100 percent of the

property’s value

Surviving Spouse

of First Responder

Killed or Fatally

Injured in the Line

of Duty 11.134

Cities, Counties, School

Districts and Special Districts Total Mandatory

100 percent of the

property’s value

For more information, visit our website:

comptroller.texas.gov/taxes/property-tax

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this document may be requested in alternative formats

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Texas Comptroller of Public Accounts

Publication #96-1740

February 2018