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This 2026 homeowner's guide to legislative changes breaks down the new tax exemption, HOA drought protections, and SB 38 eviction reforms. Get the facts to protect your Texas property.
As a real estate professional who lives and breathes the Texas market, I can tell you that the 89th Legislative Session was one for the history books. We are seeing a massive shift in how the state handles everything from your backyard fence to your annual tax bill. These changes are not just technical tweaks. They represent a fundamental movement toward protecting your rights as a property owner.
Whether you are sipping coffee in a Dallas high rise or planning a renovation in a Houston suburb, these laws affect your bottom line. I have spent hours analyzing the new codes so you do not have to. Here is a comprehensive look at the new landscape for Texas homeowners in 2026.
If you felt like your property taxes were a second mortgage, help has arrived. The most significant news is the jump in the general homestead exemption. Thanks to Senate Bill 4 and the subsequent voter approval of Proposition 13, the exemption for school district taxes has moved from $100,000 to a staggering $140,000.
The increase is particularly significant when you remember that as recently as 2021, the homestead exemption in Texas was a mere $25,000. It was boosted to $40,000 in 2022, and then saw a huge jump to $100,000 in 2023. And just last year in 2025, Senate Bill 4 expanded it to $140,000.
For those over 65 or living with a disability, the news is even more impactful. Senate Bill 23 increased the additional exemption from $10,000 to $60,000. When you stack this on top of the general homestead exemption, seniors now have $200,000 of their home value protected from school taxes.
Think about that for a second. If your home is valued at $400,000, you are now only paying school taxes on $260,000 of that value. As an example, if we applied this to Katy ISD’s current tax rate of $1.1171, that equates to a nearly $1,564 savings per year. That’s a massive win for middle class families across the state and is retroactive for 2025 property taxes.
I recently spoke with a young family who was worried about their escrow increasing. When we crunched the numbers with the new $140,000 exemption and the extra tax rate compression from House Bill 8, their monthly payment actually dropped by nearly $150. That is money that stays in their pocket for groceries, repairs, or a family vacation.
We have all heard the stories about the “HOA Police.” Maybe you even have a story of your own. The 89th Legislature took aim at some of the most common friction points between homeowners and their associations.
Texas homeowners have been fighting an uphill battle with their insurance companies for years now. Rate hikes have felt arbitrary and impossible to predict, while non-renewal notices have landed in mailboxes with little warning and even less explanation. For many families, the stability of knowing their home is covered has quietly become one of the most stressful parts of homeownership in the state.
Two pieces of legislation aim to change that. House Bill 2067 and Senate Bill 458 are designed to bring transparency and accountability back to a process that has left too many Texans feeling powerless. For a state that faces genuine risks from hurricanes, hailstorms, and flooding, having a functional and fair insurance market isn’t a luxury. It’s a necessity.
Under HB 2067, insurers must now provide a clear, written reason for any non-renewal or cancellation. Knowledge is power. If they tell you the roof is the issue, you can fix the roof and find new coverage. Before this, many homeowners were left guessing why they were being dropped.
Furthermore, Senate Bill 458 introduces a “Right to Appraisal” for both home and auto policies. If you and your insurance company disagree on the value of a loss, you now have a formal, streamlined process to resolve that dispute without heading straight to a courtroom. This is about fairness and making sure you get what you pay for when you sign that policy.
We also saw significant reforms to the protest process. House Bill 1533 brings more transparency to the Appraisal Review Board (ARB) hearings. The goal is to make the process feel less like a “kangaroo court” and more like a fair hearing. If you have ever stood in a crowded room at the appraisal district office feeling like the deck was stacked against you, these changes are for you:
The Texas Legislature also made some significant changes that affect real estate investors this year. Here’s a quick recap of what you can expect.
The 20% appraisal cap for non-homestead properties, which includes rental homes and commercial buildings, is currently set to expire at the end of this year. If you own investment property, you should keep a very close eye on the next legislative session to see if this protection is extended.
Protecting your property rights took a massive step forward with Senate Bill 38. This law creates an expedited process for property owners to remove unauthorized occupants or squatters. In the past, this could take months of expensive legal battles. The new law streamlines the role of local law enforcement. It allows them to remove individuals who cannot prove they have a legitimate lease or ownership interest much more quickly.
It also streamlines the eviction process for landlords who have tenants with legitimate leaseholds who are delinquent on rent or have violated other lease terms, clearly outlining the processes, timelines, and fees that each party are subject to.
Finally, if you run a business out of your home, House Bill 9 is your best friend in 2026. Businesses can now exclude up to $125,000 of “business personal property” from local property taxes. This includes your equipment, furniture, and inventory. If you have been paying taxes on the computers or tools you use to earn a living, this exemption could put thousands of dollars back into your pocket.
Look, I know that was a lot to take in. But here’s the bottom line: the Texas Legislature actually showed up for homeowners this session, and that is worth celebrating. Between the bigger homestead exemption, the HOA reforms, the insurance fixes, and the appraisal changes, there is something in this package for just about every property owner in the state. That does not happen every session, and it did not happen by accident.
The thing that really gets me excited is that all of these changes point in the same direction. More transparency. Greater accountability. More power back in your hands and less in the hands of the institutions that have, let’s be honest, had the upper hand for a long time. Your HOA has to post the rules online now. Your insurance company has to tell you why they dropped you. The appraisal district has to show you their evidence before you walk into that hearing room. These feel like common sense things that probably should have been the law all along.
So here is what I want you to do → Pull up your latest appraisal notice. Double check that your homestead exemption is filed. If you are over 65, make sure that additional exemption is on there too, because that $200,000 in protected value is a game changer. And if any of this has you wondering what it means for your specific situation, reach out. That is exactly what I am here for. This is your money, your home, and your future. Let’s make sure you are getting every dollar you are entitled to.
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