Texas Energy Home Tax Break for Older Homes

Texas law would let homeowners skip taxes on home value added by energy upgrades like new heat pumps or insulation.

By Texas Legislature -- Apr 13, 2026

Texas Energy Home Tax Break for Older Homes

Overview

Texas is considering a new law to encourage homeowners to make their homes more energy efficient. The proposal would let homeowners skip paying taxes on the extra value their property gains from energy upgrades. This applies to homes built before January 1, 2011 that receive upgrades on or after January 1, 2027.

The law lists 10 types of energy-saving improvements that qualify for the tax break. These include high-efficiency heat pumps, better insulation in attics, smart thermostats, energy-efficient water heaters, and upgraded windows. Homeowners can also qualify if they install technology that helps air conditioning systems respond to demand or electric vehicle chargers.

For example, if a homeowner installs a new heat pump that increases their home's appraised value by $5,000, they would not pay property taxes on that $5,000 increase. This makes energy upgrades more affordable and encourages families to make homes more comfortable while using less energy.

The Texas Comptroller's office will work with the State Energy Conservation Office to create guidelines for local tax officials. These guidelines will help ensure the tax break is applied fairly across the state. Property owners who qualify need to apply just once, and the exemption stays in place unless they sell the home or no longer qualify.

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About the source

The Texas Legislature is the state legislature of Texas, consisting of the House of Representatives with 150 members and the Senate with 31 members. Meeting in regular session every two years, the legislature passes state laws, sets the budget, and shapes policies affecting all 30 million Texans.

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