Texas disabled veteran property tax exemption: what you get at every disability rating

Who qualifies for the Texas disabled veteran property tax exemption?

There isn't one Texas disabled veteran property tax exemption.

There are several.

The two that matter to most veterans are the partial exemption under Texas Tax Code §11.22 and the total residence homestead exemption under §11.131, and they work very differently.

Under §11.22, a veteran with a disability rating of at least 10% can designate property the veteran owns for a flat reduction in assessed value. The amount depends on the disability rating. Under §11.22(f), this exemption applies against only one property the veteran owns, which matters because it isn't limited to your residence homestead.

The 100% exemption under §11.131 is different. It applies specifically to your residence homestead and removes the total appraised value of that homestead from taxation when you meet the statute's disability requirements.

VA and Texas have separate jobs here. VA assigns the disability rating. Texas law creates the property tax exemption, and you apply through your county appraisal district. Your lender does not grant it.

There are also separate exemptions for donated homesteads and certain surviving spouses, covered further down this page, because the math and the timing are different.

One other detail matters if your home has more than one use. Texas defines a residence homestead to include a "separately secured and occupied portion of a structure." On a duplex, the total exemption reaches the portion you occupy as your principal residence, not the tenant's portion.

How much is the exemption at each disability rating?

Texas Tax Code §11.22 sets the partial exemption amounts directly.

A disabled veteran is entitled to an exemption from taxation of a portion of the assessed value of a property the veteran owns and designates as provided by Subsection (f) in accordance with the following schedule:

Texas Tax Code § 11.22(a)

Here is the schedule:

These are flat dollar amounts off the property's assessed value.

They are not percentages.

A 70% rating under §11.22 does not mean 70% of the property's value disappears from the tax roll. It means up to $12,000 of assessed value is exempt.

There is also a separate way to receive the $12,000 exemption under §11.22(b). A disabled veteran qualifies for that amount if the veteran is 65 or older with a disability rating of at least 10%, is totally blind in one or both eyes, or has lost the use of one or more limbs. So your disability rating alone isn't always what determines the amount.

The partial exemption can also continue after the veteran dies, under survivor rules covered in their own section.

What if you have a rating of 100 percent disabled or of individual unemployability?

Texas Tax Code §11.131(b) says a disabled veteran who has been awarded 100 percent disability compensation due to a service-connected disability and a rating of 100 percent disabled or of individual unemployability is entitled to an exemption from taxation of the total appraised value of the veteran's residence homestead. The statute covers a veteran who receives 100% disability compensation due to a service-connected disability and has been rated "100 percent disabled or of individual unemployability."

That second part gets missed a lot. A veteran rated TDIU or IU can qualify without having a 100% schedular disability rating. The statute specifically includes individual unemployability.

This is also not the same exemption as the flat-dollar schedule under §11.22. Section 11.131 applies to the residence homestead. A disabled veteran may take the §11.22 exemption against one designated property. A veteran who meets §11.131(b) — 100% disability compensation and a rating of 100% disabled or individual unemployability — may take the §11.131 exemption of the total appraised value of the residence homestead. A veteran who meets §11.131(b) may take the total exemption on the residence homestead. A disabled veteran may designate the §11.22 exemption on one property they own.

Whether both exemptions can be placed on the same parcel is something to confirm with the county appraisal district. Each exemption stands on its own section, but the treatment of both on one parcel is an administrative question I would not assume.

There is another rule for certain donated homes. Under §11.132, a veteran with a disability rating below 100% can receive an exemption equal to the veteran's disability percentage if the residence homestead was donated by a charitable organization at no cost, or at a cost that meets the limits in the statute. That one actually is percentage-based.

So the normal §11.22 exemption is a flat dollar reduction. A qualifying donated homestead under §11.132 exempts a percentage equal to the disability rating. Two different calculations under two different sections of Texas law.

When does the exemption actually start?

This is the part I would pay the most attention to, because the answer changes depending on which exemption you qualify for.

Texas generally looks at whether you qualified for an exemption on January 1. But the Legislature created a specific exception for the total disabled veteran homestead exemption under §11.131.

A person who qualifies for an exemption under Section 11.131 or 11.35 after January 1 of a tax year may receive the exemption for the applicable portion of that tax year immediately on qualification for the exemption.

Texas Tax Code § 11.42(e)

That means the §11.131 exemption can begin during the year. Texas Tax Code §26.1125 gives the calculation: if you qualify after the year has started, you owe tax only for the days before the date you qualified, and the days after qualification are exempt.

So if your qualifying 100% rating comes through in July, the total homestead exemption is prorated from the date you qualify in July.

Now compare that with a veteran whose 40% rating comes through in July. The §11.22 partial exemption is not included in any of the mid-year exceptions in §11.42, so it remains subject to the general January 1 rule. That veteran waits until January 1.

Two veterans can get disability decisions in the same month and have completely different property tax timing. Most explanations of this benefit don't make that distinction.

There is also a lot of old information online saying the total exemption begins on January 1 following the year you qualify. That was the rule before the law changed. The Legislature added §26.1125 through Senate Bill 201, effective January 1, 2012, and since then the law has provided for the §11.131 exemption to be prorated from the qualification date. If a page tells a veteran who qualifies during the year to wait until next January for the §11.131 exemption to begin, that page is out of date.

The timing is different again for other sections. Sections 11.132 and 11.133 are treated as effective January 1 of the tax year in which the person qualifies. For a qualifying surviving spouse under §11.133, Texas Tax Code §26.112 calculates the tax as if the person qualified on January 1 and remained qualified for the rest of the year. That is not the same as §11.131, which is prorated from the actual qualification date. The section number decides the answer.

How do you apply, and what is the deadline?

You apply with the appraisal district for the county where the property is located.

For the total homestead exemption under §11.131, and for the exemptions under §§11.132 and 11.133, the Comptroller form is Form 50-114, Residence Homestead Exemption Application. For the partial disabled veteran exemption under §11.22, the form is Form 50-135, Disabled Veteran's or Survivor's Exemption Application.

The filing window comes from Tax Code §11.43(a-d), which Form 50-135 cites directly: the completed application and supporting documents go to the appraisal district between January 1 and April 30 of the tax year you're requesting the exemption for. For good cause, the chief appraiser may extend that deadline by written order for one period of no more than 60 days.

Once an exemption under §11.22, §11.131, §11.132 or §11.133 is allowed, Texas Tax Code §11.43 says you generally do not have to claim it again every year. The exemption continues until the property changes ownership or your qualification changes. That doesn't mean you'll never hear from the appraisal district again — the chief appraiser can require a new application to confirm you still qualify, and must send written notice if one is required.

If you're dealing with a rating decision that arrives during the year, especially a new §11.131 qualification, talk directly with your county appraisal district about the filing steps for your property.

I'm a mortgage originator, not a tax advisor. I'm explaining what the Texas Tax Code says and how it affects the mortgage side. Questions about how the exemption applies to a specific property should go to your county appraisal district or a tax professional.

What happens to the exemption if the veteran dies?

The answer depends on which exemption the veteran had.

For the partial exemption under §11.22, the surviving spouse can continue receiving the amount the veteran was entitled to at the time of death, for as long as the spouse remains unmarried. If the spouse does not survive the veteran, the statute also provides an exemption for surviving children who are younger than 18 and unmarried.

The total homestead exemption under §11.131 can also continue for a surviving spouse. The spouse must not have remarried since the veteran's death, and the property must have been and remain the surviving spouse's residence homestead.

Texas also has a separate provision under §11.133 for the surviving spouse of a member of the U.S. armed services who was killed or fatally injured in the line of duty. If the surviving spouse has not remarried, §11.133 provides an exemption from taxation of the total appraised value of the surviving spouse's residence homestead. That is its own exemption, separate from the disabled veteran rules under §§11.22 and 11.131.

What happens at closing when you buy a home?

This is where the tax rule and the mortgage process meet.

You cannot hold a residence homestead exemption on a home you do not own yet. Texas defines the homestead as property occupied as the owner's principal residence, and before closing you're not the owner. So your property taxes are not simply zero at the closing table because you expect to qualify for the §11.131 exemption.

The sequence runs in this order. First you close on the home, and taxes are prorated between the seller and buyer based on what the tax roll shows that day. Then you own the property and can file Form 50-114 with the county appraisal district. Once the district approves the exemption, §26.1125 applies the mid-year calculation.

If the tax amount was already calculated, Texas Tax Code §26.1125(b) says the assessor "shall recalculate" the tax due and correct the tax roll. If the bill has already gone out and remains unpaid, the assessor must issue a corrected bill. If the tax has already been paid, the collector must refund the amount that exceeded the tax actually due.

The word shall matters. This isn't a county choosing whether to honor the proration. The recalculation requirement is in state law and applies statewide.

There is also a trap running the other direction. If you're buying a home from a veteran whose homestead currently has the total exemption, the tax roll can show the seller's exempt figure when you close. That exemption does not survive the ownership change, so your prorations and initial escrow can be built from a tax figure that is about to change, with the difference showing up later in the escrow process. It is worth checking before you close.

How the exemption changes your mortgage payment

This is the part county exemption pages don't cover, because it isn't their job.

Property taxes are part of the escrow account on a mortgage when taxes are escrowed, so the tax figure used to set up that account drives the monthly amount collected. At closing, the lender is working from the county's current tax information, and that information reflects the seller's exemption status rather than an exemption the buyer expects to receive later.

If you're buying a home and expect to qualify for the total exemption under §11.131, the appraisal district cannot approve that exemption before you own the property. So the initial escrow account may be based on a tax figure higher than the amount ultimately due once your exemption is approved.

After the appraisal district certifies the exemption and the tax bill is corrected, the mortgage servicer's next escrow analysis is where the mortgage side catches up. That can return the escrow surplus and reduce the monthly escrow collection going forward.

The reverse can happen when the seller's exemption disappears after a sale. If the initial escrow was built from the seller's exempt tax figure, the servicer may later have to adjust the account when the new tax amount is reflected.

This is why I want to know about your disability rating during preapproval rather than after closing. It changes which tax figure we're working from, and that figure runs through your escrow.

Don't assume every lender will qualify you using the tax figure you expect after the exemption. Lender and investor requirements differ. Some may accept documentation supporting the future exemption. Others may require the current tax figure or apply their own underwriting rules. The county rule is set by Texas law; the lender's underwriting treatment is a separate question.

Bring it up early. Ask how the lender is treating the property taxes in your qualification and what documentation they need. That is a much better conversation to have before you're writing an offer than after the loan is already moving.

If you're at the start of the process, the VA loan requirements in Texas cover what actually gets checked on a file. And if you own a Texas home already and were hoping to pull equity out, read why Texas blocks VA cash-out refinances before you plan around one.

Common questions

Does a 100% rating mean I pay no property tax at all?

If you meet Texas Tax Code §11.131, the total appraised value of your residence homestead is exempt from taxation. The statute also includes veterans rated for individual unemployability, so a 100% schedular rating is not the only way to qualify.

What if my rating comes through in the middle of the year?

If you qualify for the total homestead exemption under §11.131 during the year, the exemption begins from the qualification date and the tax is prorated under §26.1125. The regular partial exemption under §11.22 does not have that mid-year exception, so it remains subject to the January 1 rule.

Will my property taxes be zero at closing?

No. You cannot hold the homestead exemption before you own the property, so closing prorations use the tax roll as it exists on closing day. After you own the home and the appraisal district approves the exemption, Texas law requires the tax amount to be corrected when applicable.

Do I have to reapply every year?

Generally, no. Texas Tax Code §11.43 says an exemption under §§11.22, 11.131, 11.132 or 11.133 does not have to be claimed again every year once allowed, unless ownership or qualification changes. The chief appraiser can still require a new application to confirm that you continue to qualify.

Can I put the exemption on a rental property?

The partial exemption under §11.22 can be designated on any one property you own, so it can be applied to property other than your residence homestead. The total exemption under §11.131 is different and applies specifically to your residence homestead.

This article is educational content only. It is not a commitment to lend, an offer of credit, or legal or tax advice. Program rules change; the facts above were verified on the date shown and linked to their official sources. Your scenario gets verified against current guidelines, on your file, before anything is promised.