Why Some Texas Homeowners Are Losing Their Homestead Exemption: Understanding Senate Bill 1801
March 11, 2026 | Michael Saegert, Atty at Law
Many Texas homeowners have recently been shocked to receive unexpected property tax bills, sometimes including several years of back taxes. In many cases, the reason is not a mistake — it is the result of a Homestead Exemption audit required under Texas law.
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During the 88th legislative session, the Texas Legislature passed Senate Bill 1801, which took effect on September 1, 2023. This law requires appraisal districts across Texas to conduct periodic reviews of homestead exemptions to confirm that property owners still qualify.
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For example, the Collin Central Appraisal District must now verify each residence homestead at least once every five years.
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While the goal of the law is to prevent fraud and ensure exemptions are properly applied, many homeowners are unaware that these audits are taking place — and some only discover the issue after their homestead exemption has already been removed.
What Senate Bill 1801 Requires
Under Texas Property Tax Code Section 11.13, homeowners may qualify for a Residence Homestead Exemption if the property is their primary residence.
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Senate Bill 1801 requires appraisal districts to periodically verify that homeowners who received this exemption still meet the eligibility requirements.
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The law requires appraisal districts to:
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Conduct periodic homestead audits
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Verify that the homeowner still occupies the property as their primary residence
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Confirm the homeowner still qualifies for the exemption
Importantly, homeowners do not need to reapply for the homestead exemption unless the appraisal district specifically requests verification.
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However, when an audit occurs, the appraisal district may send a request asking the homeowner to confirm eligibility.
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If the homeowner does not respond, the exemption may be removed.
Why Many Homeowners Are Not Aware of the Audit
One of the most common issues we see is that homeowners never realize the appraisal district attempted to verify their exemption.
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Several situations can cause the audit notice to go unnoticed.
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Incorrect Mailing Address
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If the appraisal district has an outdated mailing address on file, the notice may be sent to the wrong location.
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Mail Sent to a PO Box
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Some homeowners use a PO Box as their mailing address. If the property owner does not regularly check that mailbox, they may miss important notices from the appraisal district.
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The Notice Is Mistaken for a Scam
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Unfortunately, many homeowners assume the verification notice is a scam or junk mail and discard it without responding.
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The Homeowner Assumes No Action Is Needed
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Some homeowners believe that because they already received a homestead exemption in previous years, they do not need to respond to verification requests.
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However, under the new audit requirements, failing to respond may result in the exemption being removed.
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Changes in Property Ownership
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Another common situation occurs when ownership changes.
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Examples include:
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Transfer of ownership to a trust
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Transfer between spouses
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Title changes after refinancing or estate planning
Even if the homeowner still lives in the property, these ownership changes may trigger a review of the exemption.
What Happens When a Homestead Exemption Is Removed
When a homestead exemption is removed following an audit, the consequences can be significant.
Without the exemption:
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The property loses its tax reduction
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The property may lose its homestead appraisal cap
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Property taxes may increase dramatically
In some cases, the appraisal district may also apply back taxes for multiple years if the exemption is determined to have been invalid during that period.
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This can result in a large unexpected tax bill.
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Unfortunately, many homeowners only discover the issue when they receive a tax statement reflecting the change.
Can You Fight the Removal of a Homestead Exemption?
In many situations, homeowners may still have options to challenge the removal of their homestead exemption.
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However, timing is critical.
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If the homeowner receives a notice requesting verification, it is extremely important to respond promptly.
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If the exemption has already been removed, the property owner may still be able to contest the decision through the appraisal district’s protest process.
The sooner a homeowner addresses the issue, the more options may be available.
What Texas Homeowners Should Do
If you own property in Texas and have a homestead exemption, it is important to:
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Watch for verification letters from your appraisal district
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Make sure your mailing address on file is correct
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Respond promptly to any homestead audit requests
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Review property tax notices carefully
These steps can help prevent the exemption from being removed unnecessarily.
Need Help With a Homestead Exemption Issue?
If your homestead exemption has been removed or you received a large property tax bill after an audit, it may be important to review your situation as soon as possible.
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At Michael Saegert, Attorney at Law, we help Texas property owners understand their rights under Texas property tax law and explore options for challenging incorrect assessments.
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If you have questions about a homestead exemption audit or property tax protest, our office may be able to help you evaluate your options.
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