Texas Over-65 Property Tax Deferral: The DFW Homestead Move That Frees Cash for Care

By Dallas Senior Advisor Care Team · September 3, 2026

Texas Over-65 Property Tax Deferral: What It Actually Does for a Dallas Homeowner

Texas has no state income tax, which means the state funds schools, cities, counties, and hospital districts largely through property taxes — and in Dallas County that combined rate lands on a house that may have quadrupled in value since a parent bought it in the 1980s. A widow in Lake Highlands or Preston Hollow can own her home outright and still owe five figures a year in property taxes to Dallas ISD, the City of Dallas, Dallas County, Dallas College, and Parkland Hospital District. When that same person now needs eight hours a day of paid help at DFW's going rate of roughly $26 to $34 an hour, the tax bill and the care bill are competing for the same fixed income. A Texas over 65 property tax deferral, authorized by Section 33.06 of the Texas Tax Code, is the tool that lets the care bill win. Any homeowner age 65 or older can file a deferral affidavit with their county's chief appraiser and stop collection of ad valorem taxes on their residence homestead for as long as they own and occupy it.

The word families most often mishear is deferral. This is not forgiveness, and it is not an exemption. The taxes continue to be assessed every year and continue to sit against the property as a lien; what stops is collection. No taxing unit can sue, foreclose, or begin delinquency proceedings on a homestead while a valid deferral affidavit is on file. The accumulated balance, plus interest, comes due when the owner dies, sells, or stops using the property as a homestead, and the estate or the buyer settles it out of the proceeds. For a family whose plan already involves selling the house eventually — which is most families making a senior care decision in DFW — that trade can be exactly right. For a family that intends to keep the house in the family, it is a debt someone will have to pay in cash.

Why the Ceiling and the Over-65 Exemption Come First — Before Any Deferral

Before a Dallas family reaches for the deferral affidavit, it is worth confirming the two benefits that reduce the bill outright rather than postponing it. The first is the residence homestead exemption itself, which removes a portion of a home's value from school district taxation. The second is the additional age-65 homestead exemption, which stacks on top of the general one for any owner who has turned 65. Texas voters have approved substantial increases to both of these amounts in recent legislative cycles, and the figures have moved more than once, so do not rely on a number you read in an old article — pull your own account on your appraisal district's website and confirm which exemptions are actually posted on it. It is common in North Texas to find a parent who turned 65 four years ago and never applied, because nobody told them the exemption is not automatic.

The more valuable benefit is the school tax ceiling under Section 11.26. Once a homeowner qualifies for the over-65 exemption, the school district portion of the tax bill — usually the largest single line — is frozen at that year's amount and cannot rise, no matter what happens to the appraised value, unless the owner makes significant improvements. Cities, counties, and some special districts may adopt an optional ceiling as well, and many DFW jurisdictions have. A parent who qualified in 2015 and has held that ceiling ever since is carrying a school tax bill that ignores a decade of North Texas appreciation. A surviving spouse who is at least 55 when the qualifying spouse dies can keep the ceiling on the same home. If a family discovers a parent qualified but the district never applied the ceiling, correcting that is often worth more, permanently, than deferring anything.

Four Appraisal Districts, One Family, Four Sets of Paperwork

The metro's geography complicates this in a way that families in single-county metros never deal with. A DFW family is routinely managing property in more than one appraisal district at once — a parent's house in Dallas County under the Dallas Central Appraisal District, an adult child in Plano or Frisco under the Collin Central Appraisal District, a sibling in Flower Mound or Carrollton under Denton Central Appraisal District, another in Arlington under the Tarrant Appraisal District, and occasionally a lake house in Rockwall CAD. Each district runs its own portal, its own forms queue, and its own turnaround. The state forms are uniform — the Comptroller's residence homestead exemption application and the tax deferral affidavit for an over-65 owner are the same statewide documents — but you file each one with the chief appraiser of the county where the property sits, not with a central state office and not with the taxing units themselves.

This matters most when a parent moves. If a widow sells in Oak Cliff and buys something smaller near a daughter in McKinney or Stonebridge Ranch, she does not simply inherit her old benefits. She must apply again in Collin County, and she should request a tax ceiling certificate from Dallas CAD before or shortly after the move, because a percentage of her school tax ceiling can transfer to the new Texas homestead. Families who skip that step lose years of frozen value and only notice when the first full bill arrives. Practically: file the new homestead application, request the certificate from the old district, and confirm in writing with the new district that both the age-65 exemption and the transferred ceiling percentage are posted on the account before the next tax year closes.

The Catch Most DFW Families Find Too Late: Mortgages, Reverse Mortgages, and Accruing Interest

A deferred balance is not free money. Interest accrues on the deferred taxes each year the deferral remains in place — the statutory rate was lowered by the Legislature in recent years and is well below the standard delinquency penalty structure, but it is compounding against a balance that grows by a full tax bill every January. On a house carrying a $9,000 annual bill, a five-year deferral is a mid-five-figure claim against the sale proceeds. That is often still the right call when the alternative is unpaid care hours, but a family should run the arithmetic against the home's likely sale price rather than treating the deferral as costless.

The larger trap is a lender. A deferral stops the taxing units from collecting; it does not override a mortgage contract. If a parent still carries a mortgage or a home equity loan, the servicer almost certainly requires taxes to be escrowed and paid, and will pay them and bill the borrower regardless of what the appraisal district has on file — and failing to keep taxes current can be a default under the loan documents. Reverse mortgages are stricter still: a HECM requires the borrower to keep property taxes and insurance current, and a deferral can put the loan in technical default and set foreclosure in motion. The deferral is a clean tool for a parent who owns free and clear. For anyone with a lien on the property, do not file until the servicer confirms in writing how it will handle it.

What Happens to the Homestead When a Parent Moves Into Assisted Living

This is the question that decides whether the deferral survives the care decision, and the answer surprises most families. A deferral, the over-65 exemption, and the tax ceiling all depend on the property remaining the owner's residence homestead — and Texas law explicitly contemplates an owner who is not physically living there. A home does not stop being a residence homestead simply because the owner has moved into a facility providing services related to health, infirmity, or aging, provided the owner does not establish a different principal residence and does not rent the property to someone else. A move from a house in Lakewood into a Type B assisted living community in Richardson or a nursing facility near Baylor University Medical Center generally does not, by itself, end the homestead status.

The word that ends it is rent. Families under financial pressure often reach the obvious conclusion — lease the empty house, use the rent toward a $3,800 to $5,800 monthly assisted living bill — without realizing that renting the property can terminate the homestead treatment and, with it, the exemption, the ceiling, and the deferral, making the whole deferred balance plus interest immediately collectible. There are also downstream interactions with Texas Medicaid: the homestead is generally treated as an exempt resource for long-term-care eligibility within equity limits, but the Medicaid Estate Recovery Program may assert a claim against the estate later, and a deferred tax lien sits alongside it. Before you rent, sell, or transfer a DFW parent's homestead during a care transition, get the sequence reviewed by a Texas elder law attorney and confirm the exemption status with the appraisal district in writing. The order of those three moves determines what the family keeps.

Talk to a free Dallas advisor →