What is a homestead exemption or adjustment on my tax bill?

In Texas, the taxable value of Homesteaded Property may only increase 10% each year. The Homestead Adjustment (shown as Homestead ADJ on the statements issued for MUD1 and MUD2) is a deduction of the assessed value above the 10% maximum taxable value that the property values may increase on a Homesteaded Property. That same amount of adjustment is shown on the Collin County Tax Assessor Collector’s (blue) statement as a Homestead Cap.

Can you explain how General Homestead works?

The General Homestead protects your assessed value from increasing by more than 10% from year to year. Any value assigned by the Central Appraisal District above the 10% increase from the prior year is adjusted off of the current year value and shown as the Homestead Adjustment (or Cap). For example, if your property had an assessed value of $500,000 in 2021 and has an assessed value of $575,000 in 2022, $25,000 of the value increase will be listed as the Homestead Adj on your statement and the assessed value of the property for the 2022 year will be $550,000 (capped at 10%).