Can you get a homestead exemption on a rental property in Texas?

Not on a property you rent out and do not live in. The exemption only attaches to a structure you occupy as your principal residence (Tax Code Section 11.13(j)(1)). The exceptions are narrower than people hope: the half of a duplex you live in can qualify, renting part of the home you live in does not end its homestead character (Section 11.13(k)), and a temporary absence of less than two years keeps it if you intend to return and do not establish a different principal residence (Section 11.13(l)), with no two-year limit for military service.

If I move out mid-year, do I lose my homestead exemption immediately?

No. The exemption is based on your status as of January 1 of the tax year. If you move out on June 1, 2026, you keep the exemption for all of 2026 because you occupied the home on January 1. You will not be eligible for the exemption in 2027 on that address. File for the exemption on your new primary residence before April 30 of the following year to lock in the benefit there.

Can I keep the homestead exemption on my rental property if I still plan to move back?

Sometimes, but the window is narrow. Tax Code Section 11.13(l) keeps the home's homestead character during a temporary absence if you do not establish a different principal residence and either the absence is under two years and you intend to return, or it is caused by military service or residency in a health or aging facility (no time limit for those two). The catch for landlords: the moment you file a homestead on a new house, or the absence stops looking temporary, the old exemption is gone. If you plan to lean on the temporary-absence rule while a tenant is in the house, confirm the treatment with the Tarrant Appraisal District in writing first.

I'm military and PCSing away from Fort Worth. Do I lose the homestead exemption if I rent out my house?

Not automatically. Section 11.13(l)(2)(A) preserves homestead status during an absence caused by military service, inside or outside the United States, with no two-year limit, as long as you do not establish a different principal residence. Many NAS JRB owners rent their house during a tour and keep the exemption. Two tripwires: filing a homestead exemption on a home somewhere else kills the Texas one, and appraisal districts differ on how they treat a fully tenant-occupied house, so notify TAD of the deployment and confirm the treatment in writing. Renting out part of the home while you still live in it is separately protected by Section 11.13(k).

How do I remove the homestead exemption from my rental property in Tarrant County?

Contact the Tarrant Appraisal District and notify them in writing that the property is no longer your primary residence. You can do this online at the TAD website or by submitting a written request. Once the exemption is removed, the taxable value of the property increases accordingly. It is better to proactively remove it than to have the district discover it and assess back taxes.

How much will my property taxes increase if I lose the homestead exemption in 76179?

In the 76179 zip code, losing the standard $140,000 school district homestead exemption increases your annual tax bill by roughly $1,500 to $1,750 depending on which district your home sits in: about $1,744 in Eagle Mountain-Saginaw ISD ($1.2457 per $100) or about $1,518 in Northwest ISD ($1.0841), at 2025-26 adopted rates. Additional homestead exemptions from the county and municipal taxing units may also be lost. The Tarrant Appraisal District website has a tax estimator tool where you can calculate the difference based on your specific appraised value.

Can I get the homestead exemption on both my old house and my new one at the same time?

No. Texas law limits the homestead exemption to one property per household per tax year, meaning your current primary residence. You cannot claim it on a rental property you used to live in while also claiming it on your new home. If both exemptions are on file, the appraisal district will remove one and may assess back taxes on the ineligible one.

Tarrant County · Owner Guide

What happens to my homestead exemption if I rent my house in Texas?

By Andrew ChavisUpdated September 23, 20269 min read

The Short Answer

In most cases you lose it, but not automatically. Texas homestead exemption eligibility requires the property to be your primary residence, and Tax Code Section 11.13(l) preserves the exemption during a temporary absence only if you do not establish a new principal residence and the absence runs under two years (no time cap for military service or care-facility stays). If you move out for good and rent the property to a tenant, the exemption will be removed, typically effective the following January 1. Your property tax bill will increase as a result. In 76179, the $140,000 school-district exemption is worth roughly $1,500 to $1,750 per year at 2025-26 adopted rates, and that is what you give up when you convert to a rental. You should apply for a new homestead exemption on your new primary residence as soon as possible after moving.

How the Texas Homestead Exemption Works

The Texas homestead exemption reduces the taxable value of your primary residence for property tax purposes. Statewide, the exemption reduces your taxable value by $140,000 for school district taxes (Tax Code Section 11.13(b), raised from $100,000 by Proposition 13 in November 2025, applied starting with the 2025 tax year), and school taxes are typically the largest component of your total tax bill. Homeowners 65 or older or disabled get an additional $60,000 school exemption under Section 11.13(c), and their school taxes are frozen by the Section 11.26 ceiling. Both are tied to the home's homestead status, so a senior owner converting to a rental gives up the extra exemption and the tax ceiling at the same time. Additional exemptions may apply through the county and individual taxing districts. The exemption is not automatic if you move; it stays attached to the property until the county appraisal district removes it, either because you filed for a new exemption elsewhere or because the district discovered you no longer occupy the home. If the exemption is removed for a prior year, you may owe back taxes.

Can You Get a Homestead Exemption on a Rental Property?

Not on a house you rent out and do not live in. Tax Code Section 11.13(j)(1) defines a residence homestead as a structure occupied as the owner's principal residence, so a property held only as a rental does not qualify. Three situations get closer than people expect. If you live in one side of a duplex or another separately secured and occupied portion of a structure, that portion can be your homestead under the same definition, and the side you rent is taxed as a rental. If you rent out part of the home you still live in, Section 11.13(k) says the structure keeps its homestead character, though the exemption does not cover a portion used primarily for purposes incompatible with your own residential use. And if you move out temporarily, Section 11.13(l) keeps the homestead character for less than two years, provided you intend to return and do not establish a different principal residence, with no two-year limit for military service or a stay in a health or aging care facility.

What Happens When You Convert to a Rental

Once the house stops being your principal residence for good, you are no longer eligible for the homestead exemption on that address. A temporary absence is different: Section 11.13(l) keeps the homestead character for less than two years if you intend to return and do not establish a different principal residence. The practical timing: the exemption is based on your occupancy status as of January 1 of the tax year. If you move out on March 1, 2026, your exemption stays in place for the 2026 tax year (because you occupied it on January 1), but you will not be eligible for 2027. When the appraisal district removes the exemption, which typically happens after you apply for a homestead elsewhere, or after the district catches the discrepancy, your school-district taxable value increases by $140,000, and your annual tax bill increases accordingly. In 76179 that means roughly $1,500 to $1,750 more per year in school taxes alone: about $1,744 at Eagle Mountain-Saginaw ISD's 2025-26 adopted rate of $1.2457 per $100, or about $1,518 at Northwest ISD's $1.0841. County and other local-option homestead exemptions come off on top of that.

You Lose the 10% Appraisal Cap Too

The homestead exemption caps how fast your appraised value can rise: Tax Code Section 23.23 limits increases to 10% per year on a residence homestead, no matter what the market does. That cap is tied to the homestead and expires January 1 of the first tax year you no longer qualify (Section 23.23(c)). Once the homestead cap is gone, a rental appraised under the indexed threshold ($5 million for 2024, adjusted by CPI since) falls under the separate circuit breaker in Section 23.231(d), which holds the annual increase to 20 percent of the prior year's appraised value plus new improvements. That section expires December 31, 2026 (Sec. 23.231(k)). Unless the Legislature extends it, from the 2027 tax year the appraisal district can mark a converted rental straight to market value in a single year. Example: if your 76179 house is appraised at $330,000 under the cap but market value is $360,000, the year after conversion the appraised value can jump the full $30,000 at once. At a 2.4% combined rate that is roughly $720 more per year, on top of the exemption loss. For owners who have held the home for years, with a wide gap between capped and market value, losing the cap is often a bigger dollar hit than losing the exemption itself.

How to Apply for a New Homestead Exemption

Once you establish a new primary residence, you should apply for the homestead exemption on the new property as quickly as possible. In Tarrant County, you file Form 50-114 (Application for Residence Homestead Exemption) with the Tarrant Appraisal District. Applications are accepted year-round but must be received by April 30 to apply to the current tax year. If you miss the April 30 deadline, the earliest you can get the exemption in place is the following January 1. You will need a Texas driver's license or state ID showing your new address, and you must certify that the property is your primary residence. The TAD website has the current form and filing instructions.

The Back-Tax Risk

If you continued claiming a homestead exemption on a property after you moved out, even unintentionally, because you never notified the appraisal district, the county can assess back taxes for the years the exemption was improperly applied, plus a penalty. Texas Tax Code Section 11.43(i) allows the appraisal district to back-assess up to five years if it discovers an ineligible exemption. That is real money: if the exemption was worth $1,000 to $1,700 per year in the years it was wrongly in place, a five-year clawback lands somewhere between $5,000 and $8,500, plus interest, and that is the school district alone. This comes up most often when owners move out, start renting, but never remove themselves from the homestead on the rental property. The fix is straightforward: notify the Tarrant Appraisal District in writing that the property is no longer your primary residence, and do it promptly when you move out. Do not wait for them to catch it.

Budgeting for the Tax Change

When you are running the cash flow math on a potential rental, you need to account for the higher property tax bill, not the rate you paid as an owner-occupant. If your current Tarrant County tax bill is $5,200/year with the homestead exemption and the exemption saves you $1,700/year, your tax bill as a landlord will be approximately $6,900/year. That difference affects your monthly cost calculation and your escrow payment if you have a loan on the property. Use the non-homestead tax rate in your cash flow projections. It is the accurate number. Many owners calculate cash flow using their current (lower) owner-occupied tax rate and are surprised when the bill goes up.

Common Questions

Can you get a homestead exemption on a rental property in Texas?: Not on a property you rent out and do not live in. The exemption only attaches to a structure you occupy as your principal residence (Tax Code Section 11.13(j)(1)). The exceptions are narrower than people hope: the half of a duplex you live in can qualify, renting part of the home you live in does not end its homestead character (Section 11.13(k)), and a temporary absence of less than two years keeps it if you intend to return and do not establish a different principal residence (Section 11.13(l)), with no two-year limit for military service.
If I move out mid-year, do I lose my homestead exemption immediately?: No. The exemption is based on your status as of January 1 of the tax year. If you move out on June 1, 2026, you keep the exemption for all of 2026 because you occupied the home on January 1. You will not be eligible for the exemption in 2027 on that address. File for the exemption on your new primary residence before April 30 of the following year to lock in the benefit there.
Can I keep the homestead exemption on my rental property if I still plan to move back?: Sometimes, but the window is narrow. Tax Code Section 11.13(l) keeps the home's homestead character during a temporary absence if you do not establish a different principal residence and either the absence is under two years and you intend to return, or it is caused by military service or residency in a health or aging facility (no time limit for those two). The catch for landlords: the moment you file a homestead on a new house, or the absence stops looking temporary, the old exemption is gone. If you plan to lean on the temporary-absence rule while a tenant is in the house, confirm the treatment with the Tarrant Appraisal District in writing first.
I'm military and PCSing away from Fort Worth. Do I lose the homestead exemption if I rent out my house?: Not automatically. Section 11.13(l)(2)(A) preserves homestead status during an absence caused by military service, inside or outside the United States, with no two-year limit, as long as you do not establish a different principal residence. Many NAS JRB owners rent their house during a tour and keep the exemption. Two tripwires: filing a homestead exemption on a home somewhere else kills the Texas one, and appraisal districts differ on how they treat a fully tenant-occupied house, so notify TAD of the deployment and confirm the treatment in writing. Renting out part of the home while you still live in it is separately protected by Section 11.13(k).
How do I remove the homestead exemption from my rental property in Tarrant County?: Contact the Tarrant Appraisal District and notify them in writing that the property is no longer your primary residence. You can do this online at the TAD website or by submitting a written request. Once the exemption is removed, the taxable value of the property increases accordingly. It is better to proactively remove it than to have the district discover it and assess back taxes.
How much will my property taxes increase if I lose the homestead exemption in 76179?: In the 76179 zip code, losing the standard $140,000 school district homestead exemption increases your annual tax bill by roughly $1,500 to $1,750 depending on which district your home sits in: about $1,744 in Eagle Mountain-Saginaw ISD ($1.2457 per $100) or about $1,518 in Northwest ISD ($1.0841), at 2025-26 adopted rates. Additional homestead exemptions from the county and municipal taxing units may also be lost. The Tarrant Appraisal District website has a tax estimator tool where you can calculate the difference based on your specific appraised value.
Can I get the homestead exemption on both my old house and my new one at the same time?: No. Texas law limits the homestead exemption to one property per household per tax year, meaning your current primary residence. You cannot claim it on a rental property you used to live in while also claiming it on your new home. If both exemptions are on file, the appraisal district will remove one and may assess back taxes on the ineligible one.