Applying for Child Care Facility Property Tax Exemptions

Important reminder: The deadline to apply for Prop 2 property tax exemptions for tax year 2025 is Wednesday, April 30, 2025

Background on Proposition 2

During the 88th Legislative Session, the Texas Legislature passed Senate Bill (SB) 1145 and Senate Joint Resolution (SJR) 64 to amend Article VIII of the Texas Constitution to allow cities and counties the option to provide an exemption from ad valorem property taxation between 50 to 100 percent of the appraised value of all or a part of real property used to operate a child care facility, contingent on voter approval.

On November 7, 2023, 64.8% of Texas voters approved the constitutional amendment (Proposition/Prop 2), which paved the way for SB 1145 and SJR 64 to officially become law on January 1, 2024.

On March 20, 2024, the Houston City Council passed an ordinance to approve the property tax exemption equal to 100% of the appraised value of qualifying child care facilities for Tax Year 2024 and each year after that.

On March 26, 2024, the Harris County Commissioners Court approved property tax exemptions equal to 100% of the appraised value for qualifying child care facilities for Tax Years 2024 and 2025. The Commissioners Court will deliberate exemption modifications and extensions every two years. Importantly, these exemptions do not apply to property taxes collected by the Harris County Flood Control District, Harris County Hospital District, or the Port of Houston Authority.

If you'd like more information on the property tax process, please read the Harris Central Appraisal District (HCAD)’s Guide to Understanding the Property Tax Process.

Eligibility Requirements for Child Care Facility Property Tax Exemptions

To be eligible for property tax exemptions under Prop 2, child care facilities must participate in the Texas Workforce Commission’s Texas Rising Star Program and maintain a minimum 20% enrollment of children receiving subsidized services through the Texas Workforce Commission. Applicants will need to submit documentation to verify they meet both of these requirements.

Additionally, a property owner cannot claim the child care facility exemption on property they lease to another to operate a qualifying child care facility if the person also claims a Texas Tax Code Section 11.13 residence homestead exemption on the property or leases any part of the property to another for use as a primary residence.

The Harris Central Appraisal District (HCAD) will review submitted applications and documentation to determine whether the property referenced in the application qualifies for the property tax exemptions based on the Texas Tax Code.

Child care facilities that are interested in participating in the Texas Rising Star Program are encouraged to visit the program’s website to learn more about the certification process.

Application and Affidavit Forms to Claim the Exemptions

Child care facilities that meet all the eligibility requirements must apply for the exemptions to be applied to their HCAD accounts and reflected in their 2025 tax year property tax bill. The exemptions are not automatically applied.

All eligible facilities must submit Form 50-844, the application. Facilities that do not own their property and rent their spaces will also need to submit Form 50-845, the affidavit that the property owner must complete. The following section provides more information relevant to child care facilities that rent their spaces.

Eligible facilities located within the Houston city limits will only need to submit one application and affidavit (if applicable) to claim both the City of Houston and Harris County exemptions.

Child care facilities must print out the application and affidavit (if applicable), available below in English, Spanish, Vietnamese, Mandarin, and French.

Once you have completed the form(s), you must print, sign, and mail OR deliver the application and affidavit (if applicable) by April 30, 2025 to the following HCAD address:

13013 Northwest Freeway Houston, Texas 77040-6305

What to Know If You’re a Child Care Provider That Rents Your Facility

State law requires that property owners pass on all savings to the child care provider(s) that rent their facilities. For properties taxed as a single entity but subdivided for tenants, the law states that only the square footage used for child care may be used to calculate the tax exemption by the local appraisal district.

By submitting form 50-845 (the affidavit), property owners are required to do the following:

  1. Provide the child care provider with a disclosure document stating:
    1. The amount of property taxes the property owner is saving as a result of the exemption; and
    2. How the property owner will ensure that rent charged to the child care provider is reduced to equally match the exemption reduction.
  2. State the amount they are reducing in rent charged to the child care provider.
  3. Certify that the total rent charged to the child care provider is not higher than the average rental costs for child care facilities.
  4. Certify that the total rent charged to the child care provider is similar to that of other tenants leasing a similar space.

Documentation Needed to Apply for the Exemptions

Applicants must include the following documents with their application:

  1. Documentation that the child care facility participates in the Texas Workforce Commission’s Texas Rising Star Program as described by Government Code Section 2308.3155.
  2. Documentation that at least 20% of children enrolled in the child care facility receive subsidized child care services provided through the child care services program administered by the Texas Workforce Commission.
  3. For a property owner leasing the property to a qualifying child care facility, Form 50-845 (the affidavit) certifying that the property owner has provided to the child care facility a disclosure in accordance with Tax Code Section 11.36(f).

Deadlines to Claim the Exemptions for the 2025 Tax Year

Eligible child care facilities can immediately begin applying for the City of Houston and Harris County property tax exemptions.

For the exemptions to apply to the 2025 tax year, eligible child care facilities must mail OR deliver the application and affidavit (if applicable) by April 30, 2025 to the following HCAD address:

13013 Northwest Freeway Houston, Texas 77040-6305.

For the exemptions to apply to the 2025 tax year, envelopes must be postmarked no later than April 30, 2025.

The chief appraiser at HCAD may request additional information to evaluate an application. Property owners must comply within 30 days of the request, or the application will be denied. The chief appraiser may extend this deadline for a single period not to exceed 15 days for good cause shown (Tax Code Section 11.45).

Confirmation That Exemptions Were Applied and the Reapplication Process

Later this spring, HCAD will mail notices of appraised values to all entities that pay property taxes. These notices will show the exemptions granted during the 2025 tax year. If found to be eligible for the exemptions by HCAD, child care facilities who submitted a complete application will see the City of Houston and Harris County property tax exemptions applied to their property tax bill.

Once the child care exemption is granted, an application does not need to be resubmitted annually unless the property’s ownership changes or qualifications for the exemption change. The chief appraiser may require a new application to confirm eligibility by sending a written notice and an application. 

Where To Receive Assistance

For any questions regarding this exemption and the application process, please contact the Harris Central Appraisal District (HCAD) using one of the following methods.

  • Online web form: Click here
  • By phone: (713) 957-7800
  • In person: Make an Appointment with HCAD’s customer service team Monday through Friday, 8:00AM - 5:00 PM