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Texas Homestead Exemption on a New Build: When to File and How It Lowers Your Mortgage Payment

Published October 24, 2026 · Kyler Hood, Sales Agent, eXp Realty LLC

Short answer: the Texas homestead exemption takes $140,000 off the value your school district can tax. On a new build, you can file as soon as you close and move in. You don't have to wait until January. Once the appraisal district applies it, your tax bill drops, and your lender lowers your escrow to match.

I'm Kyler Hood, a new construction agent in North and East DFW. I tour new builds in Wylie, Forney, Rockwall and nearby cities. I also looked up the 2026 tax rates for 29 cities, one by one. This guide uses those numbers. If you're still picking a home, my floorplan search shows plans and prices from the builders I cover.

In this guide

• What is the Texas homestead exemption?
• Who qualifies on a new build?
• When should you file on a new build?
• How do you file in Collin, Kaufman and Rockwall counties?
• How much does it save in Wylie, Forney and Rockwall?
• How does the exemption reach your mortgage payment?
• When does the 10% cap start?
• Who should file the week they close?

What is the Texas homestead exemption?

It's a set dollar amount the state takes off your home's value before school taxes are figured. It only applies to the home you live in. Texas law says school districts must take off $140,000 (Texas Comptroller).

• Texas voters raised it from $100,000 to $140,000 on November 4, 2025 (FOX 7 Austin).
• Owners who are 65 or older, or disabled, get another $60,000 off school taxes (Texas Comptroller).
• Cities, counties and other taxing units may add their own exemption. It can be up to 20% of the value, and no less than $5,000. Each one picks its own amount (Texas Comptroller).

Who qualifies on a new build?

You qualify if you own the home and it's where you live most of the time. That's the rule from the Texas Comptroller. A rental or a second home doesn't count.

• You can only claim one homestead at a time (Form 50-114).
• You need a copy of your Texas driver's license or state ID. A few people are exempt from this, such as active duty military and their spouses (Form 50-114).
• The address on that license or ID must match the new home (Collin CAD). So update your license address first.

When should you file on a new build?

File right after you close and move in. You don't have to wait for January 1. Say you buy after January 1. The state's form says you can get the exemption for the rest of that year. That works if the last owner didn't have it (Form 50-114). On a brand-new home, the last owner is usually the builder.

• The usual window is January 1 to April 30 of the year you want it (Form 50-114).
• If you miss it, you can still file late. You get up to two years after the deadline (Form 50-114).
• Appraisal districts value every home as of January 1 each year (Texas Comptroller). A home finished in spring may have been a bare lot on that date. Or it may have been half built.

How do you file in Collin, Kaufman and Rockwall counties?

You file Form 50-114 with the appraisal district in your home's county. Don't send it to the state (Form 50-114). Filing is free. Collin CAD says there is never a fee to apply (Collin CAD).

Collin CAD doesn't take faxed or emailed forms (Collin CAD). Kaufman CAD also says there's no charge to file (Kaufman CAD).

How much does it save in Wylie, Forney and Rockwall?

It takes about $1,400 to $1,800 a year off the school line in these five cities. That's the $140,000 exemption times each school district's 2026 rate. The rates come from my 29-city tax homework, checked in late September 2026. The school districts are listed by name with the Texas Education Agency.

• The math is simple: $140,000 divided by 100 is 1,400. Then 1,400 times the school rate gives the yearly amount.
• This only counts the school line. Any city or county exemption would be extra.
• It assumes the home's taxed value is at least $140,000.

How does the exemption reach your mortgage payment?

It reaches you through escrow. Escrow is the account your lender uses to pay your property tax for you. Your lender has to review that account once a year and send you a statement (CFPB). When your tax bill drops, the next review lowers your monthly escrow.

• Texas property taxes are generally due by January 31. Penalty and interest start February 1 (Texas Comptroller).
• If the escrow comes up short, the lender can spread the catch-up over at least 12 months (CFPB).
• Ask your lender to set escrow from the tax on your price, not an old bill. My guide to the year-two payment jump covers why that matters.

When does the 10% cap start?

The cap starts on January 1 of the year after your first exemption year. After that, your home's taxed value can't go up more than 10% a year. New work on the home can add to it (Tex. Tax Code 23.23). So the first year you file, there's no cap yet. That's one more reason to file early.

Who should file the week they close?

This fits the buyer who closes on a new build after January 1 and plans to live in it. On a new build, the builder usually never had a homestead on the house. That means you can file now and not wait for the next year. In Forney ISD, the school exemption alone is worth $1,801.66 a year at the 2026 rate. My neighborhood guides list the tax rate for each community I've toured.

One more thing before you sign at a model home. The builder's sales rep works for the builder. Having your own agent means someone compares the options and spots the blind spots for you. They also negotiate for you. That includes the tax side, like the homestead step.

This is general information, not tax, legal or lending advice. Exemption rules come from the Texas Comptroller, Form 50-114 and the Texas Tax Code, checked October 24, 2026. School rates come from my 2026 tax homework, checked September 24 to 29, 2026. Rates and rules can change. Confirm your numbers with your appraisal district and your lender.

Kyler Hood, eXp Realty.