How Do Property Taxes Change When You Buy a Home in Texas?

The current owner's property tax bill on a home you are about to buy may bear almost no resemblance to what you will actually owe. This surprises buyers in Texas more than almost anything else at the closing table. Here is exactly what changes and why.

Why the Seller's Tax Bill Is Not Your Tax Bill

In Texas, homestead-designated properties are subject to a statutory appraisal cap under Texas Tax Code Section 23.23: the appraised value cannot increase by more than 10% per year, regardless of actual market value growth. This means a seller who has owned a home for ten years and filed their homestead exemption may have an appraised value significantly below the current market value — and a tax bill that reflects that lower capped value. When you purchase the home, the homestead cap resets. The Kendall County Appraisal District (KCAD) will reappraise the property based on the purchase price or market value — whichever is supported — for the following tax year. Your tax bill in year two of ownership may be substantially higher than the seller's final tax bill.

The Homestead Exemption Does Not Transfer

The seller's homestead exemption also does not transfer to you at closing. To receive the $140,000 school district homestead exemption approved by Texas voters in November 2025, per the Texas Comptroller, you must file Form 50-114 with the Kendall County Appraisal District by April 30 of the tax year following your purchase. If you close in November and do not file by April 30, you lose that year's exemption. You may file retroactively for up to two prior years if you miss the deadline, but proactive filing is significantly simpler.

How to Estimate Your Real Tax Obligation

Before making an offer on any Texas property, request the following from your agent or title company: the property's current KCAD appraised value; the current combined tax rate for all applicable entities (Boerne ISD, Kendall County, city if applicable); the current homestead exemption status; and whether the current appraised value reflects the homestead cap or actual market value. Your agent can run a quick estimated tax calculation based on the purchase price and the current combined rate — this gives you a realistic picture of year-two taxes rather than relying on the seller's artificially capped bill.

Property Taxes Are Paid in Arrears in Texas

Texas property taxes are paid in arrears — the 2026 tax bill covers the 2026 calendar year and is due by January 31, 2027. At closing, taxes are prorated: the seller pays their share for the days they owned the property during the current tax year, and you take over from closing date forward. If the actual tax bill comes in higher than the proration estimate used at closing, you may owe a small additional amount to reconcile. Your title company will handle this calculation and it will appear on your closing disclosure.

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