Property Tax Reality Check: How Texas Taxes Actually Compare to California

If you are relocating from California to the Texas Hill Country, you have probably heard some version of this warning: "Texas property taxes are brutal." The headline is true — Texas effective property tax rates are roughly double California's. But the headline is not the whole story. The real comparison involves Proposition 13 protections you are giving up, a Texas homestead exemption system that significantly reduces your taxable value, and a zero-percent state income tax that offsets much or all of the property tax difference depending on your income. I have walked enough California-to-Texas clients through this math to know that the outcome varies dramatically by household — and that the buyers who understand the numbers before they commit make better decisions.

The raw numbers: what each state actually charges

Texas has no state income tax. That is the first line in every relocation pitch, and it is accurate. But Texas funds its government primarily through property taxes, and those rates reflect that structural choice. The statewide average effective property tax rate in Texas is approximately 1.60 to 1.63 percent of assessed value [1]. In the Hill Country, the rates vary by county and by which taxing entities — county, city, school district, and special districts — overlap your property.

California's base property tax rate under Proposition 13 is 1 percent of assessed value, with assessed value generally capped at the purchase price plus a maximum 2 percent annual increase [2]. For a new California homebuyer in 2025-2026, the effective rate typically lands between 1.10 and 1.30 percent once you add local voter-approved bonds, parcel taxes, and any Mello-Roos assessments. In some Southern California communities, Mello-Roos can push the effective rate to 1.50 percent or higher [3].

What Proposition 13 actually protects — and what you are giving up

Proposition 13, passed in 1978, is the foundation of California's property tax system. It caps your base assessed value at the purchase price and limits annual increases to 2 percent [2]. For a family that bought a $600,000 California home in 2015, the assessed value in 2026 might be around $745,000 — even though the home's market value is likely well above $800,000. That 2 percent cap compounds over time, creating a growing gap between what you pay and what a new buyer would pay.

When you sell that California home and buy in Texas, you lose the Prop 13 compounding advantage entirely. Your Texas property will be assessed at current market value on day one — and that is the basis for your tax calculation going forward. There is no "locked-in" base assessment in Texas. The closest equivalent is the 10 percent annual appraisal cap that applies to homesteaded properties under Senate Bill 2 (passed in 2019), which limits year-over-year increases in assessed value to 10 percent [4]. But 10 percent is five times the Prop 13 cap of 2 percent, and in a rapidly appreciating market, you will feel that difference.

The loss of Prop 13 protection is the single most important context for understanding the Texas property tax increase. You are not just moving to a higher-rate state — you are moving from a system that rewarded long-term ownership to one that resets at market value with every transaction.

The Texas homestead exemption: the number most buyers underestimate

In 2025, Texas voters approved Proposition 13, increasing the standard homestead exemption from $100,000 to $140,000 [5]. This exemption reduces your taxable value for school district taxes — the single largest component of your property tax bill. If your home is assessed at $500,000, your taxable value for school district purposes is $360,000, not $500,000. That is a meaningful reduction.

For homeowners 65 or older, or with a qualifying disability, Proposition 11 (also approved in 2025) added an additional $60,000 exemption on top of the standard $140,000, for a total school district exemption of up to $200,000 [5]. The over-65 exemption also provides a school district tax ceiling — freezing your school tax amount at the level paid when the exemption was first claimed.

Here is the practical impact: a $500,000 homestead in Kendall County with the standard $140,000 exemption sees a taxable value of $360,000 for school district purposes. That same property without any exemption would be taxed on the full $500,000. The exemption effectively reduces your school district tax bill by 28 percent on day one.

The real comparison: total tax burden, not just property tax

Property tax is one component of your total state and local tax burden. The full comparison must include state income tax, sales tax, and any other state-level levies. Here is where the Texas proposition gets compelling — or complicated, depending on your income.

California's state income tax ranges from 1 percent to 13.3 percent, with the top rate applying to income above $1 million [6]. Even middle-income earners in the $100,000 to $200,000 range face marginal rates of 6 to 9.3 percent. A household earning $150,000 in California pays roughly $9,000 to $11,000 per year in state income tax. In Texas, that bill is zero.

California's combined sales tax ranges from 7.25 to 10.25 percent depending on the county [7]. Texas's combined sales tax ranges from 6.25 to 8.25 percent [8]. The difference is modest — typically 1 to 2 percentage points — but it applies to all non-exempt purchases throughout the year.

At $175,000 household income, the California state income tax alone — approximately $10,200 per year — exceeds the entire property tax increase from moving to Texas. The total annual savings in this scenario approaches $10,000. Over ten years, that compounds to roughly $100,000 in combined tax savings, before accounting for any investment returns on the freed-up cash flow.

But the math shifts at different income and property value levels. A household earning $80,000 with a $400,000 California home moving to a $400,000 Texas home sees a smaller income tax offset — California's state tax on $80,000 is roughly $3,800 — while the property tax increase on a lower-value home is more moderate. The net benefit is still positive in most scenarios, but the margin narrows.

When the math does not work in your favor

There are scenarios where the relocation does not produce a net tax benefit — or where the benefit is marginal enough that other factors dominate the decision.

Low income, high Texas property value. A retiree selling a California home and buying a comparably priced Texas home, with minimal earned income, does not benefit from the income tax offset. They are paying higher Texas property taxes with no California income tax savings to offset them. For this buyer, the property tax increase is a pure cost — and it can be substantial. A $600,000 home in Kendall County at the combined 1.86 percent rate generates an annual tax bill of approximately $7,900 after the homestead exemption. That same home in a California county with a 1.1 percent effective rate would generate roughly $6,600 — but with no income tax offset, the Texas cost is a net increase of $1,300 per year.

California Prop 13 legacy value. Long-time California homeowners with deeply discounted Prop 13 assessments face the starkest comparison. A family that bought a $400,000 home in 2005 may be paying property taxes on an assessed value of approximately $510,000 in 2026 — but the market value is likely $800,000 to $1 million. Moving to Texas means the tax base resets to market value. Even with the homestead exemption, the Texas property tax bill on a $900,000 Hill Country home would be significantly higher than the Prop 13-protected California bill.

Insurance costs. This is the expense that catches nearly every California buyer off guard. Texas homeowner's insurance averages approximately $4,400 per year — nearly three times the California average of roughly $1,450 [9]. In hail-prone areas of the Hill Country, rates can be higher. Insurance is not a tax, but it is a recurring ownership cost that increases the total carrying cost of a Texas property relative to California.

The year-two reassessment surprise

This is the issue I warn every California buyer about, and it is the one most frequently ignored. In California, your property tax bill at closing is your property tax bill for the next several years — because Prop 13 locks in the assessed value at purchase price with a 2 percent annual cap. In Texas, your first-year tax bill is based on the prior owner's assessed value, which may be significantly below market value if they owned the property for years.

When the county appraisal district conducts its annual reappraisal — typically effective January 1 of the following year — your property will be reassessed at current market value. If you paid $550,000 for a home that was last assessed at $380,000, your tax bill can jump 30 to 45 percent in year two. The Infrastructure & Land Realities section covers how county appraisals work for Hill Country properties in more detail.

The 10 percent homestead appraisal cap limits annual increases after that initial reassessment — but the jump from the seller's basis to your market-value basis is uncapped. There is no transitional period. Your year-two tax bill reflects the full market value of the property, minus only your homestead exemption.

I tell every buyer: budget for the year-two number, not the year-one number. Ask the closing attorney or title company to estimate your expected tax bill based on current market value and the applicable exemptions. That is the number you should build into your monthly housing budget.

How to estimate your real post-sale tax bill

The formula is straightforward, but you need two data points: the current appraised value from the county appraisal district and the combined tax rate for your specific location.

Step 1: Look up the property's current appraised value on the Kendall County Appraisal District website (or the relevant county for your property). This is the prior owner's assessed value — the basis for year one.

Step 2: Find the combined tax rate for the property's taxing entities. In Kendall County, this varies depending on whether the property is within Boerne city limits, the Boerne ISD boundaries, or other overlapping jurisdictions. The county appraisal district and the Boerne community page can help identify these.

Step 3: Calculate the year-one tax bill: current assessed value × combined rate, minus the homestead exemption adjustment.

Step 4: Calculate the year-two tax bill: your purchase price × combined rate, minus the homestead exemption. This is the number that reflects your true ongoing cost.

The difference between step 3 and step 4 is the "year-two surprise." For many California-to-Texas buyers, this difference represents $2,000 to $8,000 or more in additional annual cost that they did not budget for.

Tax protest strategies: your right to challenge the appraisal

Texas property owners have the right to protest their appraised value annually through the county Appraisal Review Board (ARB) [10]. This is not a loophole or a special program — it is a standard process available to every property owner, and roughly 15 to 20 percent of Texas property owners file protests each year.

The most effective protests are supported by comparable sales data showing that the appraisal district's assessed value exceeds the property's market value. If the ARB determines that the appraisal is too high, the value is adjusted downward — and your tax bill decreases accordingly. Professional tax protest firms work on contingency (typically 25 to 50 percent of the savings) and handle the process for you, though you can also file a protest yourself at no cost.

For first-year buyers, the protest is particularly important because the appraisal district may assess the property at or near your purchase price — and in some cases, that assessment may exceed comparable sales in the area. A well-documented protest can reduce your taxable value by 5 to 15 percent in a soft market, which compounds into meaningful savings over multiple years.

Bottom line

Texas property taxes are higher than California's — there is no way to frame that differently. But the total tax picture is more nuanced than the property tax comparison alone suggests. For most working households earning above $80,000 to $100,000, the California state income tax savings offset a substantial portion — often all — of the property tax increase. For retirees or low-income buyers, the math may not work as favorably.

The critical planning steps are: budget for the year-two reassessment, not year-one; understand the homestead exemption and apply for it immediately; plan for the insurance cost increase; and consider the tax protest process as a standard part of your first-year ownership. These are not complicated steps, but they require awareness that most first-time Texas buyers do not have.

I have helped California families run these exact numbers for properties throughout Boerne, Fair Oaks Ranch, and the broader Hill Country. The analysis is always specific to the property and the household — there is no one-size-fits-all answer. But with the right data, the decision becomes clear.

Frequently asked questions

Do Texas property taxes really cost twice as much as California?

The effective rate in Texas (1.6 to 2.3 percent depending on county) is roughly double California's effective rate for new buyers (1.1 to 1.3 percent). On a $500,000 home, that translates to roughly $8,000 to $11,000 annually in Texas versus $5,500 to $6,500 in California. However, the Texas homestead exemption ($140,000 for school district taxes) reduces the taxable value, narrowing the gap. The full comparison must also include California's state income tax, which Texas does not charge [1][5].

What is the year-two property tax surprise?

In Texas, your first-year property tax bill is based on the seller's assessed value, which may be below market value if they owned the property for years. In year two, the county reappraises at current market value — your purchase price. This can cause a 30 to 45 percent increase in your tax bill from year one to year two. Budget for the year-two number, not the year-one number [4][10].

Does the $140,000 homestead exemption apply to all property taxes?

The $140,000 exemption applies specifically to school district taxes, which are the largest component of most Texas property tax bills. Other taxing entities — the county, city, and special districts — may offer smaller exemptions, but the school district exemption provides the most significant reduction. Over-65 and disabled homeowners receive an additional $60,000 exemption for school district taxes, plus a tax ceiling that freezes the school tax amount [5].

Can I protest my property tax appraisal if I think it is too high?

Yes. Every Texas property owner has the right to file an annual protest with the county Appraisal Review Board (ARB). The protest challenges the appraised value using comparable sales data, property condition issues, or other evidence. If the ARB agrees the value is too high, your taxable value is reduced. Roughly 15 to 20 percent of Texas property owners file protests each year. Professional protest firms work on contingency and typically charge 25 to 50 percent of the resulting tax savings [10].

How does California's Proposition 13 affect my decision to move?

If you have owned a California home for many years, your Prop 13-protected assessed value may be significantly below market value — meaning your current California property tax bill is lower than what a new buyer would pay. Moving to Texas resets your tax basis to the full purchase price (minus the Texas homestead exemption). For long-time California homeowners with low Prop 13 assessments, this can mean a larger property tax increase than the simple rate comparison suggests [2][3].

What about Texas homeowner's insurance costs?

Texas homeowner's insurance averages approximately $4,400 per year, compared to California's average of roughly $1,450 [9]. Hill Country properties may face additional premium factors including hail exposure, distance from fire stations, and wildfire risk in heavily wooded areas. This is not a tax, but it is a significant recurring cost that should be factored into the total housing budget alongside property taxes.

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Sources

1. Texas Comptroller / Tax Foundation — Texas Property Tax Rates. Statewide average effective property tax rate of 1.60–1.63%; highest-in-nation ranking among states without income tax. comptroller.texas.gov
2. California Board of Equalization — Proposition 13 Assessment Limits. Base assessment at purchase price; 2% annual increase cap; reassessment upon change of ownership. boe.ca.gov
3. CalcLogix — California Property Tax Guide 2026. Effective rates for new buyers at 1.10–1.30%; Mello-Roos impact; supplemental tax bill explanation. calclogix.com
4. Texas Senate Bill 2 (2019) — 10% Homestead Appraisal Cap. Annual appraisal increase limit of 10% for homesteaded properties; compression of school district tax rates. capitol.texas.gov
5. Ballotpedia / Texas Comptroller — Propositions 13 and 11 (2025). Homestead exemption increase to $140,000; over-65/disabled additional exemption increase to $60,000; school tax ceiling provisions. ballotpedia.org
6. California Franchise Tax Board — Tax Rates and Brackets. State income tax rates from 1% to 13.3%; marginal rates by income bracket for 2025-2026. ftb.ca.gov
7. California Department of Tax and Fee Administration — Sales Tax Rates. State base rate of 7.25%; combined rates by county reaching 10.25%. cdtfa.ca.gov
8. Texas Comptroller — Sales Tax Rates. State rate of 6.25%; combined rates up to 8.25% with local additions. comptroller.texas.gov
9. Insurance Information Institute / Bankrate — Homeowner's Insurance Cost Comparison. Texas average of ~$4,400/year vs. California average of ~$1,450/year; Hill Country hail and wind exposure factors. bankrate.com
10. Texas Comptroller — Property Tax Protests and Appraisal Review Board. Annual protest rights; comparable sales evidence; ARB process; 15–20% protest filing rate statewide. comptroller.texas.gov

Last verified: July 1, 2026