Lower Your 2025 Central Texas Property Taxes: Exemptions & Protest Guide

Guide Contents

• Section 1: Understanding Your Central Texas Property Tax Bill
• Section 2: How Your Property Value is Determined: The Appraisal Process
• Section 3: Unlock Savings: Essential 2025 Property Tax Exemptions
• Section 4: Challenging Your 2025 Appraisal: The Property Tax Protest
• Bonus = Should You DIY or Hire a Pro to Protest?
• Section 5: County Focus: Navigating Taxes in Central Texas
• Section 6: Mortgages and Property Taxes: Understanding Your Escrow Account
• Section 7: Your 2025 Property Tax Questions Answered: FAQs
• Section 8: Expert Guidance Matters: How Keenan Group Can Assist
• Section 9: Take Action for 2025: Resources and Next Steps
• Section 10: Glossary of Property Tax Terms

Welcome to Central Texas, a region celebrated for its vibrant culture and thriving real estate market. Whether you're a long-time homeowner or considering making this your new home, understanding the local property tax system for the upcoming 2025 tax year is crucial. With 25 years of experience serving this community, Keenan Group at Compass Real Estate knows that Texas property taxes can sometimes feel like a maze, especially with unique aspects like our non-disclosure policy on sales prices.

Unlike some states where sales prices are public record, Texas operates under a non-disclosure system. This means the county appraisal districts primarily estimate property values based on factors such as property improvements, land value, and available market data, rather than confirmed sale prices. While they strive for accuracy, this estimation process means your assessed value might not always align with the true market value.

But here's the good news: as a homeowner in Central Texas, you have significant opportunities to potentially lower your property tax burden. This guide will walk you through the essentials for 2025, including:

• Understanding Your Property Tax Bill
• Unlocking Valuable Exemptions
• Your Right to Protest
• County-Specific Information

At Keenan Group at Compass Real Estate, we're deeply rooted in the Central Texas community and committed to providing you with the knowledge and resources you need. Understanding your property taxes is a vital part of homeownership, and with our 25 years of local expertise, we're here to guide you every step of the way for the 2025 tax year.

Get a Free Comparative Market Analysis to Help With Your Property Tax Protest

Section 1: Understanding Your Central Texas Property Tax Bill: The Players

Navigating the property tax system can feel complex, partly because several different entities play distinct roles. It's helpful to understand who does what:

• Appraisal Districts (CADs): Each county in Texas has a Central Appraisal District (CAD) – such as the Travis Central Appraisal District (TCAD), Williamson Central Appraisal District (WCAD), and Hays Central Appraisal District (HCAD). The CAD's primary responsibility is to determine the market value of all taxable property within the county as of January 1st each year. CADs do not set tax rates or collect taxes; their function is strictly valuation and the administration of property tax exemptions. By law, they must reappraise all properties within their jurisdiction at least once every three years.
• Appraisal Review Board (ARB): Attached to each CAD is an Appraisal Review Board. The ARB is an independent panel of citizens appointed to hear and resolve disputes between property owners and the CAD regarding property valuations, exemption denials, and other appraisal matters. They act as an impartial adjudicator during the formal protest phase.
• Taxing Units: These are the local government entities that actually levy property taxes based on the values determined by the CAD. Examples include school districts, cities, counties, Municipal Utility Districts (MUDs), Emergency Service Districts (ESDs), community colleges, and hospital districts. Each taxing unit sets its own annual tax rate based on its budget requirements and the total taxable value within its boundaries.
• Tax Assessor-Collectors: This county office is responsible for calculating the actual tax bills for each property. They do this by applying the tax rates set by the various taxing units to the taxable value of the property (which is the appraised value determined by the CAD, minus any applicable exemptions). The Tax Assessor-Collector then mails the consolidated tax bills and collects the taxes owed on behalf of all the taxing units within the county.

The separation of these duties can sometimes be confusing. Understanding each entity's role helps you direct your questions or concerns effectively.

Section 2: How Your Property Value is Determined: The Appraisal Process

The foundation of your property tax bill is the property's value as determined by the county appraisal district (CAD). Understanding how this value is established is crucial.

• Market Value: The Foundation: Texas law requires CADs to appraise taxable property at its "market value" as of January 1st of the tax year. Market value is the price the property would likely sell for under prevailing market conditions.
• Mass Appraisal vs. Individual Characteristics: CADs use "mass appraisal" techniques, grouping similar properties and applying standardized models based on sales data. However, the law also requires them to consider individual characteristics affecting market value. This allows homeowners to protest if unique negative factors weren't accounted for.
• Appraisal Methods Used by CADs:
  • Sales Comparison (Market) Approach: Preferred for homes, comparing your property to similar recent sales, adjusting for differences.
  • Income Approach: Used for income-producing properties (apartments, offices), based on potential earnings.
  • Cost Approach: Estimates replacement cost minus depreciation, plus land value. Used for unique properties or new construction.
• The Challenge of Non-Disclosure in Texas: Texas is a "non-disclosure" state. This means property sales prices are not public record, and you aren't required to report your purchase price to the CAD.
  • Impact on CADs: This makes determining accurate market value harder for CADs, especially using the Sales Comparison approach. They often buy MLS data or use statistical models, which costs taxpayer money.
  • Information Imbalance: While homeowners aren't required to disclose, sales prices are usually in the MLS, accessible to Realtors (like Keenan Group Realtors) and CADs, but not easily available to the average homeowner. This creates a disadvantage when evaluating your assessment or gathering protest evidence.
  • Potential for Inaccuracy: Lack of transparent sales data can lead to less accurate mass appraisals, potentially resulting in assessments that don't reflect true market value – creating valid grounds for protest but making evidence gathering harder for homeowners.

Section 3: Unlock Savings: Essential 2025 Property Tax Exemptions

Taking advantage of available exemptions is one of the most effective ways to lower your 2025 property tax bill. Exemptions reduce the taxable value of your property. Apply through your county appraisal district.

The general deadline to file most exemption applications is April 30th, 2025. Late applications are possible for some key exemptions (Homestead, Over-65, Disabled Person: up to 2 years late; certain DV exemptions: up to 5 years late). Once granted, exemptions usually stay in place unless your eligibility changes or the CAD requests re-verification (often every 5 years).

Here are the most common exemptions:

• The Valuable General Residence Homestead Exemption: For your primary residence.
  
  
  • Eligibility: Own and occupy the property as your principal residence as of Jan 1st. Requires a Texas Driver's License/ID matching the property address. Only one homestead per individual/couple. Applies to mobile homes even if you don't own the land.
  • Benefit 1 (School Taxes): Mandatory $100,000 reduction in value for school district taxes.
  • Benefit 2 (Local Options): Cities, counties, etc., may offer an additional exemption (percentage up to 20% or flat amount, minimum $5,000 if offered). Varies by taxing unit.
  • Benefit 3 (The 10% Homestead Cap): After one full calendar year with the exemption, your appraised value (for tax calculation) cannot increase more than 10% per year, regardless of market value increases (excluding new improvements). Provides tax predictability.
  • Proration for New Owners (Since 2022): If you buy and occupy after Jan 1st, 2025, you can get a prorated exemption for the portion of 2025 you qualify, if the prior owner didn't claim it. The 10% cap starts Jan 1st of the year after your first full year with the exemption.
  • Application: Use Form 50-114 or your CAD's online portal. Processing can take up to 90 days.
• Age 65 or Older & Disabled Person Exemptions: Additional relief.
  
  
  • Eligibility (Over 65): Own and occupy as principal residence; qualify in the year you turn 65. May be automatic if CAD has birthdate. Surviving spouse (55+) may inherit the tax ceiling.
  • Eligibility (Disabled): Meet Social Security disability definition. Requires proof (e.g., SSA letter).
  • Benefit 1 (School Taxes): Mandatory additional $10,000 reduction for school taxes (on top of the $100,000 homestead).
  • Benefit 2 (Local Options): Taxing units may offer another local exemption (minimum $3,000 if offered). Varies widely.
  • Benefit 3 (School Tax Ceiling/Freeze): Your school district taxes are "frozen" at the amount paid in the first year you qualify for the O65/Disabled exemption. Taxes won't exceed this ceiling (unless significant improvements are made). Some other units may offer a local ceiling. Ceiling percentage is transferable to a new homestead.
  • Combining: Cannot receive both O65 and Disabled from the same taxing unit, but can choose the better one or mix/match across different units if offered.
  • Tax Deferral: O65/Disabled homeowners can defer paying homestead taxes (interest accrues at 5%). Taxes due upon sale/transfer. File affidavit with CAD.
• Disabled Veteran (DV) Exemptions: Honoring service.
  
  
  • General DV Exemption (Partial): For veterans with 10%+ service-connected disability rating. Can apply to any one property owned in Texas (doesn't have to be homestead). Amount based on rating (see Table 1). Surviving spouse/children may qualify. Use Form 50-135. Late filing up to 5 years.

  Table 1: General Disabled Veteran Exemption Amounts

  Disability Rating	Exemption Amount (Up To)
  10% - 29%	$5,000
  30% - 49%	$7,500
  50% - 69%	$10,000
  70% - 99%	$12,000
  Age 65+ w/ 10%+ rating OR Blind OR Loss of Limb(s)	$12,000

  • 100% Disabled Veteran Homestead Exemption: Total (100%) exemption on the veteran's residence homestead. Requires 100% VA disability compensation and 100% rating or individual unemployability. Surviving spouse may continue exemption. Apply using Form 50-114/online portal with VA docs. Can be prorated if qualified mid-year. Late filing up to 5 years.
  • Donated Residence Homestead Exemption (Partial DV): For homesteads donated to DV (rating < 100%) by charity. Exemption percentage equals disability percentage. Surviving spouse may qualify. Use Form 50-114.
  • Surviving Spouse of Service Member Killed in Line of Duty: 100% exemption on residence homestead for unremarried surviving spouse.
• Other Exemptions: Agricultural/timber valuation, Freeport goods, solar/wind devices, charitable/religious properties, etc. Check with your CAD.

Table 2: Key Exemption Summary (General, Over 65, Disabled Person)

Key Takeaway: Investigate all potential state and local exemptions offered by every taxing unit covering your property (county, city, school, MUDs, ESDs). Apply promptly and respond to any verification requests from the CAD to maintain your savings.

Section 4: Challenging Your 2025 Appraisal: The Property Tax Protest

You have the right to protest the appraised value assigned by the CAD if you believe it's incorrect for the 2025 tax year. A successful protest can lower your tax bill.

• Why Protest?: You'll receive a "Notice of Appraised Value" around April/May 2025. The deadline to file a protest is typically May 15th, 2025, or 30 days after the notice is mailed, whichever is later. Check your notice! Common grounds include:
  • Over Market Value: CAD value is higher than what your property would realistically sell for on Jan 1st, 2025.
  • Unequal Appraisal (Equity/Uniformity): Your property is valued higher than similar properties in your neighborhood.
  • Errors in Property Characteristics: Incorrect square footage, features, condition in CAD records.
  • Exemption Issues: Exemption wrongly denied or removed.
• Gathering Evidence: Your protest needs proof.
  • Comparable Sales (Comps): Recent sales of similar nearby properties. Crucial but hard to get due to non-disclosure. Keenan Group Realtors can provide this vital MLS data.
  • Equity Comparables: Data showing similar properties appraised lower per square foot.
  • Photographs: Document needed repairs, poor condition, or negative location factors.
  • Repair Estimates: Written quotes for necessary repairs.
  • Appraisal Reports: Recent independent appraisals.
  • Property Characteristics: Proof of errors in CAD records (surveys, plans).

The Protest Process Steps:

1. File Protest: Submit form/file online by the deadline.
2. Informal Meeting: Discuss evidence with a CAD appraiser; potential settlement.
3. Formal ARB Hearing: Present case to the independent Appraisal Review Board if no informal agreement. CAD also presents its case. ARB decides value.
4. Further Appeals: Options like binding arbitration or district court lawsuit exist if you disagree with the ARB decision (involve costs/complexity).

Non-Disclosure Impact: Texas's non-disclosure status significantly favors those with MLS access (CADs, professionals). A DIY protest based on market value is challenging without robust sales comps. This makes professional help, like obtaining a CMA from Keenan Group Realtors, particularly valuable in Texas.

Post-Protest Benefit: If your value is lowered via a formal protest/appeal, the CAD faces a higher burden ("clear and convincing evidence") to raise it significantly the following year, potentially extending your savings.

Section 5: County Focus: Navigating Taxes in Central Texas Counties

While state law sets the rules, local decisions heavily impact your tax bill. Tax rates and optional exemptions vary significantly by county, city, school district, MUD, etc. This guide focuses on the major counties in the Central Texas region, including Travis, Williamson, Hays, Bastrop, Caldwell, Burnet, Blanco, Fayette, Llano, and Lee.

Key Differences and Local Options:

Your total tax rate is the sum of rates from all entities taxing your specific address. Local option exemptions add another layer of variation. It's essential to check the specific details for your property's county and taxing units:

• Travis County: Includes the City of Austin and other entities offering various local option exemptions.
• Williamson County: Notable for significantly increasing county-level Over-65/Disabled exemptions and adding a county homestead exemption in recent years. These apply *only* to the county portion of the tax bill.
• Hays County: Cities (like Buda, Kyle, Dripping Springs), Austin Community College (ACC), Municipal Utility Districts (MUDs), and Emergency Service Districts (ESDs) within Hays County offer varying levels of local Over-65/Disabled and homestead exemptions.
• Additional Central Texas Counties (Bastrop, Caldwell, Burnet, Blanco, Fayette, Llano, Lee): Property owners in these counties will interact with their respective Central Appraisal Districts and local taxing units. While the state-level rules (like homestead exemptions and the protest process) are similar, local option exemptions and specific deadlines should always be verified directly with the county's CAD and taxing units.

You must identify all taxing units on your appraisal notice or tax bill and check their specific exemptions via the respective CAD website.

Central Texas County Appraisal District Contacts:

Table 3: Central Texas County Appraisal District Contacts

Finding County-Specific Info Online:

Your county's Central Appraisal District (CAD) website is the best source for:

• Exemption forms (50-114 for Homestead, 50-135 for Disabled Veteran, etc.)
• Online filing portals for exemptions and protests
• Detailed eligibility requirements for local exemptions
• Lists and databases of local option exemptions offered by each taxing unit (city, school district, MUD, etc.) that levies taxes on your property.
• Specific protest procedures and deadlines for that county.

Hyper-Local Impact: Your specific address determines your taxing units. Even across the street, different MUDs or school districts can mean different tax bills. Local analysis is key.

Section 6: Mortgages and Property Taxes: Understanding Your Escrow Account

Most homeowners with mortgages pay property taxes via escrow.

• How Escrow Works: Your lender collects extra funds with your monthly mortgage payment and holds them in an escrow account to pay your property taxes (and usually homeowner's insurance) when due.
• Why Escrow Payments Change: Lenders analyze your escrow account annually. If projected taxes/insurance increase, your monthly payment will likely rise. Common reasons:
   
  • Tax Bill Increases: Due to rising appraised values or tax rate hikes by local entities. Common in Central Texas's appreciating market.
  • New Home Purchase Effect ("Escrow Shock"): Initial escrow is often based on the previous owner's lower tax bill (due to their exemptions/cap). After you buy, exemptions/cap reset, property value may be reassessed higher, leading to a much larger tax bill and a significant escrow payment increase in your second year.
  • Insurance Premium Changes: Higher insurance costs also increase escrow needs.

Being proactive about exemptions and protests can help mitigate large tax bill increases and subsequent escrow shock. New buyers should anticipate potential tax increases after the first year.

Section 7: Your 2025 Property Tax Questions Answered: FAQs

• Q: Does disclosing my purchase price to the CAD automatically increase my 2025 taxes?

  A: Not necessarily. Texas is anon-disclosure state, and you don't have to report it. CADs often get MLS data anyway. Voluntarily providing a lower price might help get an accurate initial value, but the CAD must appraise at market value regardless.

• Q: Why doesn't Zillow show actual sold prices in Texas?

  A: Because Texas is non-disclosure, sales prices aren't public record, so sites like Zillow can't display them (or shouldn't).

• Q: How can I find sales prices for comparable properties for my 2025 protest?

  A: You typically need MLS access. Engage a licensed real estate agent like Keenan Group Realtors (Joe and Cara Keenan with Compass) or an appraiser. We can provide CMAs with relevant sales comps.

• Q: I just bought my home in late 2024/early 2025. When do I apply for the homestead exemption?

  A: Apply as soon as you own and occupy it as your principal residence. You can get a prorated 2025 exemption if the prior owner didn't claim it. Apply promptly!

• Q: Do I have to apply for my homestead exemption every year?

  A: No, usually it stays unless the CAD requests re-verification (often every 5 years) or your eligibility changes (e.g., you move).

• Q: Can I protest my 2025 taxes if I think they are too high?

  A: You protest the appraised value. If successful, the lower value usually results in a lower tax bill.

• Q: What's the difference between Market Value and Appraised Value on my 2025 notice?

  A: Market Value = Estimated sale price on Jan 1.
  Appraised Value = Value used for taxes.
  If you have the 10% homestead cap, Appraised Value can be lower than Market Value if the market rose more than 10%.

• Q: What happens if I miss the May 15, 2025 protest deadline?

  A: You generally lose your right to protest for the 2025 tax year. File on time!

• Q: Will protesting my 2025 taxes affect my ability to sell my home later?

  A: Unlikely. It's your right as a homeowner. Buyers focus on market value and condition. Actively managing taxes could even be seen positively.

• Key 2025 Deadlines Recap:
  • Jan 1, 2025: Valuation date.
  • Jan 31, 2025: Deadline to pay 2024 taxes without penalty.
  • Apr 30, 2025: General deadline to file 2025 exemption applications.
  • May 15, 2025: Typical deadline to file 2025 property tax protest (or 30 days post-notice).
  • Always verify specific dates with your CAD.

Section 8: Expert Guidance Matters: How Keenan Group at Compass Real Estate Can Assist

Navigating the 2025 Central Texas property tax system, especially with non-disclosure rules, requires expertise. With 25 years of dedicated experience in this market, Keenan Group at Compass Real Estate offers invaluable assistance.

• Leveraging Market Expertise in a Non-Disclosure State: Our access to the Multiple Listing Service (MLS) is critical. It allows us to pull the recent, comparable sales data essential for accurate valuations and effective tax protests – data not easily available to homeowners.
  
  
  • Comparative Market Analysis (CMA): Joe and Cara Keenan with Compass can provide a complimentary CMA using MLS data. This estimate of your property's current market value is vital for:
    • Evaluating your 2025 Notice of Appraised Value.
    • Gathering evidence for a property tax protest. A strong CMA is powerful evidence.
    • Informed decisions when buying or selling.
• Support Through Buying, Selling, and Ownership:
  • For Buyers: We help you anticipate 2025/2026 tax liabilities, considering reassessments and lost exemptions/caps, avoiding "escrow shock."
  • For Sellers: Understanding market value relative to tax assessments informs pricing strategy.
  • For Homeowners: We help interpret valuation notices, provide CMAs to assess fairness, and advise if a protest seems warranted, bridging the information gap caused by non-disclosure.

  • Client Testimonial

    "Thank you so much! You did an amazing job of: deciphering my brain dump, providing thoughtful, organized, clear responses to EVERY question, and giving us clear recommendations and resources to take action on now, as well as pin for the future. It's clear to me by the ongoing care you give to every client earns you the reputation you are able to sign off with: Austin Business Journal #12 Team Winners + 2025 Platinum Top 50 Austin Winners 2011-2025 + Realty Austin | Compass #1 Team Thank you so much for your time and for being a trusted resource for us."

    Keenan Group at Compass Real Estate acts as your essential information bridge. Our 25 years of experience and MLS access empower you with the insights needed to navigate property value and taxation confidently in Central Texas's unique market.

Section 9: Take Action for 2025: Resources and Next Steps

Stay informed and utilize available resources to manage your 2025 Central Texas property taxes effectively.

• Official Resources:
  • Texas Comptroller - Property Tax Assistance: https://comptroller.texas.gov/taxes/property-tax/
  • Travis CAD (TCAD): www.traviscad.org | (512) 834-9317
  • Williamson CAD (WCAD): www.wcad.org | (512) 930-3787
  • Hays CAD (HCAD): www.hayscad.com | (512) 268-2522
  • Bastrop CAD: www.bastropcad.org
  • Caldwell CAD: www.caldwellcad.org
  • Burnet CAD: www.burnet-cad.org
  • Blanco CAD: www.blancocad.org
  • Fayette CAD: www.fayettecad.org
  • Llano CAD: www.llanocad.org
  • Lee CAD: www.leecad.org
  • Key Forms: Look for Homestead (50-114) and DV (50-135) applications on CAD/Comptroller sites.
• Next Steps with Keenan Group at Compass Real Estate:
  • Understand Your Property's Value: Contact Keenan Group Realtors today for a complimentary Comparative Market Analysis (CMA). Knowing your market value is crucial for evaluating your 2025 tax assessment.
  • Buying or Selling?: Schedule a consultation. Joe and Cara Keenan with Compass offer 25 years of expertise to guide you, including property tax planning.
  • Concerned About Your 2025 Appraisal?: Received your notice and unsure if it's fair? Reach out. We provide market insights and CMAs to help you evaluate and decide on protesting.

Section 10: Glossary of Central Texas Property Tax Terms

Understanding key terminology is essential when dealing with property taxes. Here are definitions for some common terms:

Appraisal District (CAD)

A local government entity in each Texas county responsible for appraising taxable property at market value and administering exemptions.

Appraisal Review Board (ARB)

An independent panel of citizens that hears and resolves disputes between property owners and the CAD regarding property values and other appraisal matters.

Market Value

The most probable price a property would sell for in a competitive, open market under normal conditions as of January 1st of the tax year.

Appraised Value

The market value of your property as determined by the CAD. This is the starting point for calculating your taxes.

Assessed Value

In Texas, often the same as Appraised Value unless the Homestead Cap applies. If the cap applies, the Assessed Value (or "Appraised Value for Taxable Value") is lower than the Market Value.

Taxable Value

The Appraised Value (or Assessed Value if the cap applies) minus any applicable exemptions (like the Homestead, Over-65, or Disabled Veteran exemption). This is the value your tax rate is applied to.

Taxing Unit

A local government entity (e.g., school district, city, county, MUD) that has the authority to levy property taxes.

Tax Rate

The amount of tax levied per $100 of taxable value. Each taxing unit sets its own rate annually.

Homestead Exemption

A tax exemption for your primary residence that reduces its taxable value.

Homestead Cap (10% Appraisal Cap)

A limitation on the annual increase in the appraised value (for tax calculation purposes) of a residence homestead to no more than 10% per year, regardless of market value increases (after the first full year with the exemption).

Non-Disclosure State

A state where property sales prices are not public record (Texas is a non-disclosure state).

CMA (Comparative Market Analysis)

An estimate of a property's market value based on recent sales of comparable properties in the area.