Thanks largely to expanded tax exemptions approved by Texas voters in 2025, two of every five homeowners in El Paso County have owed no school property taxes the past two years.
A growing number of homeowners classified as 100% disabled by the Department of Veterans Affairs also is contributing to the growth in El Paso County homeowners who don’t pay taxes to a school district, according to an El Paso Matters analysis of Central Appraisal District data.
In 2024, just over 42,000 El Paso County homeowners – 23% of all those with homestead exemptions – paid no school taxes. In 2025, that jumped to more than 77,000, or about 42% of all properties with homestead exemptions. This year, the number will fall back to about 72,000, 39% of all properties with homestead exemptions.
In 2025, the Texas Legislature unanimously approved amendments to the Texas Constitution that increased the homestead exemption for school property taxes to $140,000 from the previous $100,000, and increased the exemption for people with disabilities and those age 65 and older to $60,000, up from $10,000. Texas voters overwhelmingly supported those amendments in the November 2025 election.
Homestead exemptions are available on residential properties in Texas that are occupied by the owners. The homestead and over-65 exemptions are fairly simple to obtain through the El Paso Central Appraisal District. The exemptions reduce the amount of property tax owed by such owners, but also shift the tax burden to property owners without exemptions – mostly commercial, industrial and rental housing properties.
The 2025 changes benefited all Texas homeowners with exemptions, but had a particularly profound impact in communities such as El Paso that have low home values compared to the rest of the state. The median home sale price in El Paso in June was $280,000, compared with the state median of $342,900, according to the Texas Real Estate Research Center at Texas A&M University.
Lowered school taxes have been a rare bit of good economic news for El Pasoans facing rising utility bills, general inflation and increasing property taxes from other local governments. The changes have added to the financial challenges for some El Paso school districts, and also created some unique dynamics for the Socorro and Ysleta school districts, which will ask voters to approve property tax increases in the November general election.
Any home protected by a homestead exemption in Texas with a taxable value of less than $140,000 now faces no school property tax, which historically has been the largest part of property tax bills for Texas homeowners. For those with the additional over-65/disability exemption, homes with a taxable value of less than $200,000 pay no school district property tax.
The expanded exemptions were proposed by state leaders in response to voter anger over rising property tax bills as the cost of housing shot up in the wake of the COVID-19 pandemic.
The exemptions only apply to school property taxes, though city and county governments in El Paso offer smaller exemptions.
The number of El Paso County homes paying no school property tax because their exemptions exceeded the taxable value of their homes more than doubled between 2024 and 2025, when the new exemptions took effect. Those numbers dropped by about 10% this year, but are still significantly above 2024 levels, an El Paso Matters analysis shows.
The impact on schools
The percentage of homes not paying school taxes varies by districts, largely because of differences in property values.
Among El Paso’s three most-populous school districts, the largest number of homes not paying school taxes is in Ysleta ISD, which has fewer residents than Socorro and El Paso ISDs.
In part, that’s because homes in Ysleta ISD have lower average market value – about $211,000, according to the Central Appraisal District – than in the other two urban districts. The average market value in El Paso ISD is $280,000, and in Socorro ISD it’s $254,000.
But Ysleta ISD also offers an additional homestead exemption that’s not available in any other El Paso County school district. In addition to the state-mandated $140,000 homestead exemption and the $60,000 exemption for people with disabilities or older than 65, Ysleta exempts the first 20% of a homestead’s value from taxation.
As a result, a home in Ysleta owned by someone without a disability or older than 65 pays no school taxes if the home has a taxable value of $175,000 or less. For those eligible for the additional $60,000 state exemption, they pay no school tax as long as the taxable value is $250,000 or less.
As a result, 60% of Ysleta ISD homeowners pay no school tax because their exemptions exceed the taxable value of their home. Another 6% of Ysleta homeowners pay no property taxes at all because they are 100% disabled vets. So two-thirds of Ysleta ISD homeowners will pay no school property tax this year.
Just over a third of El Paso ISD homeowners will owe no school property tax this year; in Socorro ISD, just under a fourth of homeowners won’t owe school tax.
In the three rural school districts in El Paso’s Lower Valley – Fabens, San Elizario and Tornillo – home values are significantly lower than in urban areas, so between two-thirds and three-fourths of homeowners pay no school tax.
In the three other districts that are a mixture of rural and suburban – Anthony, Canutillo and Clint – 29% to 40% of homeowners won’t pay school tax this year.
The sharp increase in the number of homeowners paying no school property tax has little direct impact on revenues El Paso County school districts because of the way Texas funds schools. The state uses a complex system known as “recapture” that redirects property tax revenue from wealthier districts to poorer ones to create more equity in school finance.
The legislation that expanded the exemptions last year included “hold harmless” provisions, which committed the state government to making up revenues the school districts lost to the expanded exemptions.
But local schools said the state changed its calculations earlier this year in a way that sharply reduced the additional state assistance. That resulted in $18 million less than Socorro ISD was expecting, $17 million less for El Paso ISD and $10 million less for Ysleta ISD. That discovery forced the districts to scramble to adjust their 2026-27 school year budgets.
The expanded exemptions create a unique circumstance for November elections in Socorro ISD and Ysleta ISD on whether to increase school property taxes.
The passage or failure of the tax initiatives will have no impact on voters who owe no school taxes. That’s likely about two of every five eligible voters in Ysleta, and one in five eligible voters in Socorro. How those voters cast their ballots could be decisive.
Unless the state raises exemptions or property values decline, the number of El Paso County homes paying no school taxes will drop in the next few years as home values rise.
However, El Paso’s rapidly aging population will offset some of that decline as more of our housing stock is owned by people 65 and older who qualify for the extra $60,000 exemption. This year, about 62,000 homeowners have the over-65/disabled exemption, an increase of 9,000 – 17% – since 2022.
One in every three homestead properties in El Paso County now have the over-65/disabled exemption.
Exemptions for 100% disabled vets
The other contributor to the rise in El Paso County homeowners owing no school property tax is a 30% increase since 2024 in the number of homes owned by people with a 100% VA disability rating – growing from just under 10,000 to almost 13,000 this year.
The number of veterans with 100% disability ratings increased 90% nationwide between fiscal years 2021 and 2025, according to Department of Veterans Affairs data. The growth came after Congress passed the PACT Act, which was designed to expand the number of veterans qualifying for disability benefits.
Almost half of El Paso’s growth in 100% VA disability exemptions since 2024 has taken place in the Socorro Independent School District, which has the highest population of the county’s nine school districts. The number of such exemptions in Socorro ISD has increased by 36% since 2024.
In El Paso County’s six suburban and rural school districts, the number of 100% VA disability exemptions has grown by 41% since 2024.
About one in every 15 El Paso County homes with a homestead exemption is now owned and occupied by a veteran with a 100% disability rating from the VA, or their surviving spouse.
Such veterans have been exempt from all property tax in Texas since 2009. The benefit passes to a surviving spouse when a qualifying veteran dies and the spouse doesn’t remarry.
The exemption was approved by Texas voters in 2007, with 86% voting yes.
The state government has increasingly recognized that the property tax exemption for 100% disabled veterans is reducing tax revenue for local governments. A report from the Texas Comptroller’s Office estimated that El Paso’s city and county governments in 2023 lost a combined $25 million in property tax revenue due to the 100% disabled veteran exemption.
El Paso County in 2023 had 8,519 homes subject to the exemption; this year’s number is 52% higher. Based on this year’s valuations and tax rates, the city and county will likely forgo more than $40 million in combined property tax revenues from homes protected by the exemption.
Reducing benefits for disabled veterans would be a political nonstarter in Texas, so the state since 2016 has instead focused on providing some revenue to city and county governments near military bases that have been most affected by the exemption. The state payments aren’t available to school districts, community colleges, hospital districts or other local governments that assess property taxes.
Between 2024 and 2026, city and county governments requested more than $167 million in funding to offset some of their tax losses to the 100% disabled exemption, but the Legislature only funded $9.5 million a year, enough to cover $28.5 million over those three years, or 17% of the requests, according to the Texas Comptroller’s Office.
The El Paso city and county governments requested a combined $45.3 million over the last three years and received $7.9 million, or 17% of their requests.
The low rate of granted requests creates difficult choices for cities and counties with large numbers of 100% disabled veterans. Elected officials can reduce services to offset the revenue lost to exemptions, or they can raise taxes on those not covered by the exemptions.
Both options risk political backlash.
The post Why 39% of El Paso County homeowners will pay no school property taxes this year appeared first on El Paso Matters.
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