The short answer
A qualifying disabled veteran in Texas may be eligible for a partial property-tax exemption, and some veterans receiving 100% disability compensation due to a service-connected disability may qualify for a total exemption on their residence homestead. Eligibility is determined by the appraisal district based on your individual circumstances.
Why this belongs in your budget conversation
In Texas, property taxes are a large and permanent part of a monthly housing payment. An exemption does not arrive as a check — it reduces the taxable value of the property, which in turn lowers the tax bill calculated by each taxing unit.
That distinction matters when you are shopping. Two homes at the same price can carry very different payments depending on the taxing units, any MUD or PID assessments, and what exemptions you qualify for on your residence homestead. Understanding your situation early gives you a realistic budget instead of a surprise at closing.
The partial exemption schedule (Tax Code Section 11.22)
Texas Tax Code Section 11.22 provides a partial exemption for qualifying disabled veterans, set as an amount of assessed value based on the disability rating:
- 10% to 29% disability rating — up to $5,000 of assessed value
- 30% to 49% disability rating — up to $7,500 of assessed value
- 50% to 69% disability rating — up to $10,000 of assessed value
- 70% to 100% disability rating — up to $12,000 of assessed value
Read that schedule carefully
These figures are reductions in assessed value, not refunds, credits or payments. A $12,000 reduction in assessed value lowers the value the tax rate is applied to; the dollar effect on your bill depends on the combined rates of the taxing units for that property.
The 11.22 exemption is also distinct from the total residence homestead exemption discussed below. Which one applies to you depends on your rating, your compensation status and the property itself, as determined by the appraisal district.
The total residence homestead exemption (Section 11.131)
Texas Tax Code Section 11.131 addresses a total exemption on the residence homestead for a veteran who receives from the United States Department of Veterans Affairs, or its successor, 100% disability compensation due to a service-connected disability and a rating of 100% disabled or of individual unemployability.
Because this is a homestead-based exemption, it attaches to the qualifying veteran's residence homestead rather than to any property. Applications, documentation and deadlines are handled by the appraisal district for the county the property sits in — Denton CAD or Collin CAD for most of the communities I serve.
Why this matters before you choose a house
Buyers often discover exemption questions after they are under contract, which is the least useful time. If you know how your situation is likely to be treated, you can compare communities honestly — including communities with MUD or PID assessments that an exemption does not address.
It also affects the conversation with your lender. Escrow estimates on a newly built home are frequently based on land-only or prior-year values, which can understate the payment once the finished home is assessed. Ask for an estimate that reflects the completed improvement and your expected exemption status, and confirm both with the appraisal district and your lender.
The VA funding fee is a separate question
The VA funding fee is a loan cost tied to VA-backed financing and is governed by VA rules, including provisions regarding exemption from the fee for certain veterans. It is administered separately from any state or county property-tax exemption.
In other words, qualifying for a property-tax exemption and being exempt from the VA funding fee are two different determinations, made by two different authorities. Verify the funding fee question with the VA and your VA-approved lender.
Builder credits, concessions and temporary buydowns
New construction adds another layer. Builders may offer closing-cost assistance, design credits or a temporary buydown of your interest rate. Temporary buydowns used with VA-backed financing are subject to VA rules, and seller or builder contributions are subject to program limits.
None of these should be treated as guaranteed. Availability, amounts and conditions vary by builder and home, and the underwriting treatment depends on the loan program. Get the terms in writing and have your VA-approved lender confirm how each item is handled before you count on it.
Questions to bring before you start touring
- Which appraisal district covers the communities I am considering?
- Based on my documentation, which exemption provisions may apply to my situation?
- What documents and deadlines does that appraisal district require?
- What is the estimated full-year tax bill on the completed home, not land-only?
- Does this community carry MUD or PID assessments in addition to taxes?
- How is the VA funding fee being handled in my loan estimate?
- Are any builder credits or buydowns permitted and how are they treated by my loan program?
A personal note
My dad served as an Army Ranger, so this work is not an angle for me. Veterans and military families have earned careful, patient guidance — and that means telling you what needs to be verified with the appraisal district, the VA and a qualified VA lender rather than giving you a confident answer I am not the right person to give.
What I can do is help you organize the questions, understand how a community's tax picture affects what you can comfortably buy, and advocate for you through the builder conversation and closing.
Frequently asked questions
Does a disabled veteran exemption eliminate my property taxes?
Not necessarily. Section 11.22 provides a partial exemption expressed as an amount of assessed value based on disability rating. A total residence homestead exemption under Section 11.131 applies only to veterans meeting the criteria in that section. Your appraisal district determines what applies to you.
Is the exemption a refund or a payment?
No. These exemptions reduce the taxable value used to calculate your bill; they are not checks or credits paid to you. The dollar effect depends on the tax rates of the units covering your property.
Where do I apply?
Applications are filed with the appraisal district for the county where the property is located — Denton CAD or Collin CAD for most North DFW communities. Requirements, documentation and deadlines are set by the district and the Texas Comptroller's guidance.
Is the VA funding fee the same as a property-tax exemption?
No. The VA funding fee is a loan cost governed by VA rules, including provisions about exemption from the fee for certain veterans. It is determined separately from any Texas property-tax exemption. Confirm it with the VA and your VA-approved lender.
Can a builder pay down my rate on a VA loan?
Temporary buydowns used with VA-backed financing are subject to VA rules, and builder or seller contributions are subject to program limits. Availability and terms vary by builder and home. Have the specific offer reviewed in writing by your VA-approved lender.
Sources
- Texas Comptroller — Property Tax Exemptions — as of September 2026
- Texas Comptroller — 100% Disabled Veterans FAQ — as of September 2026
- Collin CAD — Disabled veteran exemption FAQ — as of September 2026
- VA — Funding fee and closing costs — as of September 2026
- VA — Temporary buydown guidance — as of September 2026
This article is general education, not tax, legal or lending advice. Exemption eligibility is determined by your county appraisal district based on your individual circumstances and documentation. Verify current rules with the Texas Comptroller, your appraisal district, the U.S. Department of Veterans Affairs and a qualified VA-approved lender.