SB23

A larger school-tax exemption for older or disabled homeowners

SB23 raises the extra residence-homestead exemption for an adult who is disabled or is 65 or older from $10,000 to $60,000. That is $50,000 more home value excluded from school-district taxation—not a $60,000 check or a $60,000 reduction in taxes. It is additional to the general school homestead exemption and applies beginning with tax year 2025. final law, Article 1.

The bill was signed June 16, 2025. Its administrative provisions took effect immediately; the exemption and related school funding depended on voters approving SJR85. That condition was met: Proposition 11 was approved in the November 4, 2025 election, as confirmed by the November 19 canvass. This is not an exemption still awaiting a vote. official history; SJR85; official constitutional-election canvass.

Separate legislation, SB4 and its constitutional amendment, increased the general school homestead exemption to $140,000. Together the general and age/disability exemptions can exclude $200,000 of qualifying homestead value; SB23 alone did not create the entire $200,000. Qualifying under both age and disability does not double the extra exemption. These changes do not automatically reduce city or county taxes. Actual school-tax savings depend on the home’s taxable value, tax rate and applicable exemptions and tax ceilings. SB4 final law; official constitutional-election canvass; prior Section 11.13(b), (c) and (h); existing school-tax ceiling rules, Section 11.26.

State help for schools losing property-tax revenue

Starting in the 2025–26 school year, the state supplies additional aid for specified school revenue losses attributable to this exemption increase. For day-to-day operations, the comparison uses school-finance law as it existed September 1, 2024, and the lesser of the district’s current maintenance-and-operations rate or its adopted 2024 rate. This protects against specified losses, not every possible future budget shortfall. final law, Section 1.03.

For debt payments, the comparison uses law as it existed January 1, 2025. The aid addresses lost local debt-service revenue not offset by other state aid. Eligible debt is limited to debt eligible under Chapter 46 as of September 1, 2025, including qualifying refinancing; refinancing cannot increase the state’s assistance cost. The act waives the Section 46.034(a) limitation for this calculation. Existing limits on overpayment remain, and a new rule reduces additional aid when total state assistance and debt-service taxes exceed needed bond payments, subject to a floor for the new subsection (a-4) aid. It is not an unlimited promise to pay for all future school bonds. final law, Section 1.02; Section 46.061 refinancing rule; prior Section 46.071, including retained (d) and (e).

How the 2025 transition worked

Before the election, school tax rates, provisional appraisal rolls and tax bills were calculated as though the larger exemption would pass. Assessors also calculated the without-relief amount. After voter approval, the provisional bills became final, without another bill unless another correction rule required one. The act also provided a supplemental-bill fallback if voters rejected the amendment; that fallback should not be described as a current additional charge after approval. final law, Sections 2.07–2.13; official constitutional-election canvass.

The Texas Education Agency also calculated the 2025–26 maximum compressed school tax rates as though the measure passed. A failed-vote adjustment would have required approval from the Legislative Budget Board and governor. Districts’ excess-local-revenue obligations—often called recapture—were to be revised after updated values. Certain districts facing their first recapture election could obtain a delay if the increased exemption would put them below the excess-revenue threshold, and could adopt their 2025 tax rate before final certification. The commissioner set election deadlines; special elections could be on a Tuesday or Saturday. Approved districts could pay for credits in March–August 2026 installments or use the alternative statutory payment method with timely notice. final law, Sections 2.01–2.06.

Failure to hold or win a required delayed election triggers property detachment/annexation or district consolidation as necessary by the 2026–27 school year. Most school transition provisions expired September 1, 2026; this enforcement provision runs to September 1, 2027, and the unused failed-vote rate-adjustment authority to September 1, 2029. The temporary tax-roll and billing provisions expire December 31, 2026. These dates govern transition administration, not a new statewide homeowner application deadline. final law, Article 2.