How the bigger homestead exemption changed a typical school tax bill

Key facts

• School homestead exemption: $25,000 (to 2021) → $40,000 (2022) → $100,000 (2023) → $140,000 (2025)¹²³
• Extra exemption since 2021: $115,000
• Savings on that alone, at the 2025-26 rate: about $1,250 a year (our math)⁴

In short

A homestead exemption takes part of your home’s value off the tax roll. For school taxes, Texas raised it three times: to $40,000 in 2022, $100,000 in 2023 and $140,000 in 2025.¹²³ At Leander ISD’s rate for tax year 2025 (school year 2025-26) of $1.0869 per $100, adopted Aug.⁵ 21, 2025, the extra $115,000 saves a homeowner about $1,250 a year.⁴ The state pays the district back for most of the lost tax money, so schools are not meant to lose funding.¹

Related: property tax bill · tax rate history

Layer 1: what an exemption does

Your school tax is the rate times your taxable value. Taxable value is your home’s value minus exemptions. A bigger exemption means a smaller taxable value, so a smaller bill. Everyone with a homestead gets the same dollar amount off. So it helps lower-priced homes the most, as a share of their bill.

Layer 2: one example home

Assume a home worth $500,000 every year, with a homestead and no age-65 freeze. We keep the value fixed so you can see the effect of rates and exemptions alone. Real values changed a lot over these years.⁴

Tax year	Exemption	Taxable value	LISD rate per $100	School tax (our math)
2021	$25,000	$475,000	$1.3370	$6,351
2022	$40,000	$460,000	$1.2746	$5,863
2023	$100,000	$400,000	$1.1087	$4,435
2024	$100,000	$400,000	$1.0869	$4,348
2025	$140,000	$360,000	$1.0869	$3,913

Rates are from the district’s audit.⁴ The drop has two causes: the bigger exemption and lower rates. At the 2025 rate, the exemption change alone is worth about $1,250 ($115,000 × $1.0869 ÷ 100).⁵ The rest comes from lower rates, mostly the state “compressing” the operating rate.²

People 65 or older or disabled get another $60,000 off, starting in 2025. Leander ISD adds $3,000 of its own, so $63,000 in all. Their school tax is usually frozen.³⁶

Questions to ask

• Where does the district show how exemptions change its tax income?
• How does the state make up for school tax lost to exemptions, and where is that reported?

Changes to this page

• Nov. 2, 2026: Added questions to ask.
• Nov. 2, 2026: We re-checked the example math. We added the law behind the yearly homestead value limit.

Layer 3: the law and the counterweights

The law:

• The Texas Constitution, Art. VIII, §1-b(c), sets the school homestead exemption. Changing it takes a vote of the people. Tax Code §11.13(b) carries the dollar amount.¹³
• Each increase came with a state law that pays districts for the lost local tax (for example, S.B. 1 in 2021 and S.B. 2 in 2023).¹²

Counterweights (the other side):

• The state pays, so all Texans pay. Money to replace local taxes comes from the state budget.¹
• Renters and businesses get no homestead exemption. Supporters say homeowners needed relief most. Critics say the relief skips renters, though some say rent could fall over time.
• Rising values can eat the savings. If your home’s value rises fast, your bill can still go up. The yearly limit on homestead value growth is 10%.⁷
• Not shown: city, county and other taxes. This page covers only the school part.
• Which year: every figure here is for tax years 2021 to 2025. Nothing on this page is about tax year 2026. We will cover the 2026 rate after the Nov. 3 election.⁵

Numbers marked “our math” are our estimates, not official figures. The notes show the inputs and the steps.

Footnotes

1. Texas Legislative Council, Analyses of Proposed Constitutional Amendments (2022), Proposition 2 (S.J.R. 2, 87th Leg., 3rd C.S.): exemption raised from $25,000 to $40,000 from tax year 2022; S.B. 1 pays districts for the loss. https://www.tlc.texas.gov/docs/amendments/analyses22.pdf ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

2. Texas Comptroller, Fiscal Notes, “Property Tax Cuts as Large as Texas” (Dec. 2023): Proposition 4 / S.B. 2 raised the exemption from $40,000 to $100,000 for 2023 and compressed rates by $0.107. https://comptroller.texas.gov/economy/fiscal-notes/archive/2023/dec/proptax.php ↩ ↩² ↩³ ↩⁴

3. Texas Proposition 13 (2025) and Proposition 11 / S.B. 23, from tax year 2025. ↩ ↩² ↩³ ↩⁴

4. Leander ISD, Annual Comprehensive Financial Report 2025, statistical Table 9, page 126 (rates through 2024-25); 2025-26 rate first proposed in the June 19, 2025 board packet, page 8 (https://meetings.boardbook.org/Public/DownloadAgenda/795?meeting=687821#page=8). Tax year 2021 = school year 2021-22, and so on. Example home and math are ours. ↩ ↩² ↩³ ↩⁴

5. Leander ISD, draft FY2025 audit, Management’s Discussion and Analysis, in the Nov. 20, 2025 board packet, page 110: “A total tax rate of $1.0869 was adopted on August 21, 2025, and reflects no change from the prior year’s rate.” https://meetings.boardbook.org/Public/DownloadAgenda/795?meeting=714882#page=110 ↩ ↩² ↩³

6. Williamson County Tax Office, “2026 Tax Rates and Exemptions by Jurisdictions,” Leander ISD row: 65+ and disabled exemptions $60,000 plus $3,000 local option. https://www.wilcotx.gov/DocumentCenter/View/22307 ↩

7. Texas Tax Code §23.23 (homestead value limit). https://statutes.capitol.texas.gov/Docs/TX/htm/TX.23.htm ↩