Texas Property Tax Code: Key Sections Every Homeowner Should Know

Texas Property Tax Code: Key Sections Every Homeowner Should Know

The Texas Property Tax Code (Title 1 of the Texas Tax Code) is the law that governs how your property is ad valorem (value-based) taxed, what exemptions you can claim, how you can protest, and what happens if you appeal. It runs across dozens of chapters and hundreds of sections — most of which you'll never need to read.

But a handful of sections directly affect your property tax bill. Understanding them gives you a real advantage when it's time to protest your appraisal, claim an exemption, or challenge a decision by the appraisal district.

This guide breaks down the sections of the Texas Property Tax Code that matter most to homeowners, in plain language.

Quick Reference: The Sections That Matter

Chapter 23: Appraisal Methods and Procedures

Chapter 23 is the foundation of how appraisal districts determine your property's value. Two sections are especially important for homeowners.

Section 23.01 — Market Value Standard

This section establishes the basic rule: all taxable property must be appraised at market value as of January 1 of each tax year.

The code defines market value as the price the property would sell for under the following conditions:

• The property is offered on the open market with reasonable time to find a buyer
• Both buyer and seller know all the uses the property is capable of and any restrictions on its use
• Both parties are trying to maximize their gains, and neither is under pressure from the other

In practice, this means the appraisal district is supposed to determine what your home would actually sell for in an arm's-length transaction — not what you paid for it, not what your neighbor's home sold for, and not a theoretical maximum.

Key provisions homeowners should know:

• The chief appraiser must consider three valuation methods — cost, income, and market data comparison — and use the most appropriate one for your property
• Each property must be appraised based on its individual characteristics, not just as part of a mass appraisal group
• A residence homestead must be valued solely as a residence, even if the land could theoretically be used for something more valuable (like commercial development)
• If your appraised value was lowered through a protest, the chief appraiser cannot increase it the following year unless the increase is supported by clear and convincing evidence
• Property owners representing themselves are entitled to offer their own opinion of value and present evidence at a hearing

That last point is significant — you don't need to be a licensed appraiser to argue your case. The law explicitly protects your right to present your own analysis.

Section 23.23 — The 10% Homestead Appraisal Cap

Section 23.23 is the law that limits how much your homesteaded property's appraised value can increase each year for tax purposes:

The appraised value of a residence homestead for a tax year may not exceed the lesser of the property's market value or 110% of the preceding year's appraised value, plus the value of any new improvements.

In plain terms: your taxable appraised value can go up by no more than 10% per year, regardless of how much the actual market value increases. The only exception is new improvements (additions, not repairs), which are added at full value.

Important details:

• The cap applies to the appraised value (what you're taxed on), not the market value (what the district thinks the home would sell for). The district tracks both numbers separately.
• The cap takes effect on January 1 of the year after you first qualify for the homestead exemption. It does not apply in your first year.
• "New improvement" means an improvement that increases market value and wasn't included in the prior year's appraisal. Repairs and ordinary maintenance are not new improvements.
• If a structure is destroyed by a casualty (fire, storm) and rebuilt, the replacement is not treated as a new improvement — it won't bust your cap.

For a deeper explanation with examples, see: Understanding Capped Appraisal Value for Texas Taxes.

Chapter 11: Exemptions

Chapter 11 defines who qualifies for property tax exemptions and how much they're worth.

Section 11.13 — Residence Homestead Exemption

This is the most widely used exemption in Texas. Section 11.13 establishes:

• School district exemption: $140,000 off the appraised value (mandatory for all school districts, increased from $100,000 effective 2026)
• Optional local exemptions: Cities, counties, and special districts may offer additional exemptions — either a flat dollar amount or up to 20% of the property's appraised value (minimum $5,000)
• Over-65 additional exemption: $60,000 off school district taxes (increased from $10,000 effective 2026), plus any additional amounts offered by local taxing units
• Disabled person additional exemption: Same as over-65

To qualify, you must own the property, use it as your principal residence, and have a Texas driver's license or ID with a matching address. You can only claim one homestead at a time.

For a full walkthrough, see: Texas Homestead Exemption 2026: Save $140K.

Section 11.131 — 100% Disabled Veteran Exemption

Veterans with a 100% disability rating from the VA (or individual unemployability) are entitled to a total exemption from property taxes on their residence homestead — they pay zero.

This section also extends the exemption to surviving spouses who have not remarried, as long as the property was the veteran's homestead at the time of death and remains the spouse's homestead.

Section 11.26 — Over-65 and Disabled Tax Ceiling

Section 11.26 creates the school tax freeze (also called a "tax ceiling") for homeowners who are 65 or older or disabled:

• Once you qualify, your school district taxes are frozen at the dollar amount you owe that year
• The ceiling can go down if your value decreases, but it can never go up above the original amount
• If you move to a new home in Texas, you can transfer the ceiling as a percentage to your new homestead
• A surviving spouse aged 55 or older can continue receiving the ceiling

The tax ceiling is one of the most valuable protections available to Texas seniors. Combined with the $200,000 in combined exemptions, many senior homeowners pay little or no school district property tax.

Section 25.25: Corrections and Late Motions

Section 25.25 provides a way to correct errors on the appraisal roll outside the normal protest window. This is critical if you missed the May 15 deadline or discovered an error after the protest period closed.

Section 25.25(b) — Clerical Errors and Multiple Appraisals

The appraisal review board may order corrections if:

• There is a clerical error that affects a property owner's tax liability
• Multiple appraisals were made for the same property in the same year

These motions can be filed at any time before the tax roll is certified, and in some cases up to five years after the date the appraisal roll was certified.

Section 25.25(d) — Value Correction Motions

This section allows a property owner to file a motion to correct the appraisal roll if the appraised value is at least one-third higher than the correct appraised value. Key rules:

• You must file the motion before the taxes become delinquent (typically by January 31)
• You must pay the undisputed portion of taxes before the delinquency date
• The motion cannot be filed if the property was the subject of a protest under Chapter 41 that was resolved by agreement for the same tax year
• This is a separate remedy from the standard protest process — Section 25.25 and Section 41.41 are mutually exclusive

Section 25.25(d) is sometimes called the "last chance" motion — it's an option for homeowners who missed the protest deadline but believe their property is significantly overvalued.

Chapter 41: Protests (Local Review)

Chapter 41 establishes your right to protest and the procedures for doing so. These are the sections that govern the process from filing through hearing.

Section 41.41 — Grounds for Protest

This section lists every reason you can legally file a protest. The most common grounds for homeowners include:

• The appraised value of your property is too high
• Your property is appraised unequally compared to similar properties (the equity argument)
• The appraisal district failed to send you required notices
• Your property was incorrectly included on the appraisal roll (wrong owner, wrong property)
• Exemptions were denied, modified, or canceled
• The agricultural use determination was changed

When filing your protest, you'll check which ground(s) apply. For most homeowners, checking "incorrect appraised (market) value and/or value is unequal compared with other properties" preserves the broadest set of rights and allows you to present the widest range of evidence.

Section 41.44 — Notice of Protest (Deadlines)

This section sets the filing deadlines:

• May 15 or 30 days after the appraisal notice is delivered — whichever is later
• For changes ordered under Chapter 25: 30 days after notice of the change
• For agricultural use changes: 30 days after notice of the determination

Late filing exceptions:

• If you file late but before the ARB approves the appraisal records, you may still get a hearing if you show good cause for the delay
• If the appraisal district failed to send you a required notice (Section 41.411), you can file before the date taxes become delinquent
• Special extensions exist for property owners working offshore in the Gulf of Mexico (20+ continuous days) or serving on active military duty outside the U.S.

An electronic protest must include a statement identifying whether you're protesting under Section 41.41(a)(1) (value) or Section 41.41(a)(2) (other grounds).

Section 41.45 — Hearing Procedures

This section governs what happens at your ARB hearing:

• You're entitled to at least 15 days' notice before your hearing
• The hearing must be informal — formal rules of evidence don't apply
• Each party can present evidence, argument, and testimony
• You may appear in person, by telephone, by videoconference, or through an authorized agent
• The ARB must deliver a written order after the hearing that includes the reasons for the determination

For a complete walkthrough of the protest process, see: How to File a Texas Property Tax Protest (2026 Guide).

Chapter 42: Judicial Review (District Court Appeals)

If the ARB rules against you and you believe the decision is wrong, Chapter 42 gives you the right to appeal to district court.

Section 42.01 — Right of Appeal

Under Section 42.01, a property owner can appeal any ARB order that determined a protest, including decisions on:

• Appraised or market value
• Exemption eligibility
• Agricultural appraisal status
• Motions under Section 25.25

Filing Requirements

• You must file a petition for review with the district court within 60 days after receiving notice of the ARB's final order
• Missing this deadline bars the appeal entirely — there is no extension
• The case is heard as a trial de novo — the court examines all facts and law from scratch, not just whether the ARB made an error

When District Court Makes Sense

District court appeals are more expensive and time-consuming than protests or arbitration. They typically make sense when:

• The property value at stake is high enough to justify legal costs
• The ARB made a clear error that can be proven with strong evidence
• You're dealing with a complex valuation issue (income properties, commercial, unique land)

Chapter 41A: Binding Arbitration

As an alternative to district court, Chapter 41A offers binding arbitration — a faster and cheaper way to appeal an ARB decision.

Section 41A.01 — Right to Binding Arbitration

You can elect binding arbitration instead of filing in district court if:

• The property is your residence homestead, OR
• The appraised or market value determined by the ARB is $5 million or less

Important: Choosing one path waives the other. If you file in district court, you give up arbitration — and vice versa.

How It Works

• File a request for binding arbitration with the county appraisal district
• Pay a $550 deposit to the Texas Comptroller (for properties under $5 million)
• An arbitrator is assigned and conducts a hearing
• The arbitrator issues a binding award within 20 days of the hearing
• The award is final and generally cannot be appealed

When Arbitration Makes Sense

Binding arbitration is often the best option for homeowners because:

• It's cheaper than district court (no attorney required, low filing cost)
• It's faster — typically resolved within a few months
• The arbitrator's decision is binding on both sides, providing certainty
• It works well for straightforward market value disputes on residential property

Recent Amendments to the Tax Code

The Texas Property Tax Code is updated regularly by the Legislature. The most significant recent changes:

2023 — SB 2 / Proposition 4

• Homestead exemption increased from $25,000 to $100,000 (Section 11.13)
• Temporary 20% appraisal cap for non-homestead properties under $5 million (expires December 31, 2026)
• School tax rate compression

2025 — SB 4, SB 23 / Propositions 11 and 13

• Homestead exemption increased from $100,000 to $140,000 (Section 11.13)
• Over-65/disabled additional exemption increased from $10,000 to $60,000 (Section 11.13)
• Effective January 1, 2026

For a full history of recent changes, see: Texas Property Tax Law Changes: 2023-2026.

How the Texas Constitution Fits In

The Texas Property Tax Code implements rights and limitations established in the Texas Constitution — particularly Article VIII (Taxation and Revenue). The Constitution authorizes the homestead exemption, the 10% appraisal cap, agricultural appraisal, and the right to equal and uniform taxation.

For how these statutes connect to the constitutional framework, see: Property Tax Rules in the Texas Constitution.

Know the Code, Protect Your Tax Bill

You don't need to memorize the Texas Property Tax Code, but understanding the key sections gives you a real edge. Knowing that Section 23.01 requires your property to be appraised at market value based on its individual characteristics — or that Section 41.41 gives you the right to protest on equity grounds — puts you in a stronger position when it's time to challenge your appraisal.

If the legal details feel overwhelming, that's what professionals are for. Contact Ballard Property Tax Protest and we'll handle the code sections, the evidence, and the hearings — so you just get a lower tax bill.