The \$200,000 school exemption, the senior freeze that locks your school taxes permanently, Williamson vs Hays County math — everything 55+ buyers need to know before purchasing in the Austin-San Antonio corridor
Texas has no state income tax, which is the headline. But Texas property taxes are among the highest in the country — effective rates of 1.8–2.5% before exemptions are common in the Austin-San Antonio corridor. For a $500,000 home, that is $9,000–$12,500/year before any exemptions. This is the number that shocks buyers arriving from South Carolina or Arizona.
What changes the picture dramatically for 65+ primary homeowners is the stacked exemption structure — particularly the 2025–2026 school tax freeze legislation that locked school taxes permanently for qualifying seniors. Here is the complete breakdown.
Every Texas homeowner who uses the property as their primary residence qualifies for the standard homestead exemption. As of 2026, this exemption is $140,000 — raised from $100,000 by Proposition 13 approved in November 2025. This reduces your taxable appraised value by $140,000 for all tax purposes.
File Form 50-114 with your county appraisal district by April 30. You have two years from the qualifying date to file late applications.
Texas homeowners age 65 or older who occupy the home as their primary residence qualify for an additional $60,000 exemption on top of the standard homestead exemption — but only for school district taxes. Total school district exemption: $140,000 + $60,000 = $200,000. For homes appraised at $200,000 or less, this completely eliminates school district taxes. For homes above $200,000, it dramatically reduces the school portion of the bill.
Once you qualify for the over-65 exemption, Texas law freezes your school district property taxes at the amount you paid in your qualifying year. The freeze is permanent — school taxes on your primary residence will never increase, regardless of how much your home appreciates. This is the most powerful financial benefit in the stack because property values in the Austin corridor have risen 40–60% over the past decade. Without the freeze, school taxes would have risen proportionally.
Estimates based on 2025–2026 Williamson and Hays County effective rates. Actual bills depend on specific entity millage rates, city/special district taxes, and appraisal values. Verify with county appraisal district before purchasing.
Sun City Texas is in Williamson County (Georgetown). Kissing Tree is in Hays County (San Marcos). Both counties have similar tax rate structures — total effective rates before exemptions of approximately 1.8–2.2%. The difference between them is typically small (under 0.2% in most cases) and varies year-to-year based on entity budget decisions. Neither county is materially better for tax purposes — choose your community based on location and amenity fit, not a small tax rate difference.
More important: MUD taxes. If your Kissing Tree or Rough Hollow parcel sits within a Municipal Utility District, add $1,000–$3,500/year to any county tax estimate. MUD taxes are not part of the county tax rate and do not benefit from homestead exemptions in the same way. Verify MUD status at the specific parcel level before closing.
| State / Scenario | Est. Annual Tax on $500K Home (65+ primary) |
|---|---|
| Texas — 65+ primary, all exemptions (Georgetown area) | ~$4,800–$6,500/yr |
| New Jersey — Monmouth County (no comparable TX-style exemptions) | ~$11,000–$14,000/yr |
| Illinois — Cook County (senior freeze exists but less powerful) | ~$7,000–$12,000/yr |
| California — Bay Area / LA (Prop 13 freeze; varies widely) | ~$5,000–$8,000/yr |
| South Carolina — Beaufort County (65+ primary) | ~$1,000–$1,400/yr (significantly lower) |
| Arizona — Maricopa County (65+ primary, primary) | ~$1,200–$2,200/yr (lower) |
Texas is not the lowest property tax state — South Carolina and Arizona are significantly cheaper for 65+ primary owners. But Texas' no-income-tax advantage means the comparison must be run on total tax burden, not property tax alone. For buyers with significant retirement income, Texas often wins on the combined picture despite higher property taxes.
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