This is the single biggest number people get wrong when they move up in Texas, so let's be careful and direct: the seller's tax bill is not a reliable estimate of yours.
How Texas actually values your new home
Your property taxes are calculated by the county appraisal district on the home's taxable value, under Texas law : generally using a January 1 valuation date, the exemptions that apply to you, and the rates set by each taxing unit (city, school district, county, and others). The appraisal district determines value through its own process; a sale is one piece of market data it may consider, but your purchase price does not automatically become your taxable value, and the seller's bill does not transfer to you either.
What the seller's bill often does include : and yours won't:
- The homestead appraisal limitation ("the cap"). If a homeowner has a general homestead exemption, Texas limits increases in the appraised value used to calculate their taxes to 10% per year, plus the value of any new improvements : and the limitation applies beginning in the second year of the exemption. Note carefully: it limits appraised value, not market value and not the tax itself. Over years of a rising market, that limitation can hold a home's taxable value well below its market value.
- An over-65 or disability school tax ceiling. Homeowners 65 or older (or disabled) can have their school-district taxes frozen at a ceiling amount. Texas law does allow qualifying homeowners to transfer a school tax ceiling to a new home in some circumstances : ask the appraisal district : but it's a specific provision, not a general rule.
- Exemptions the seller qualified for that you may not : or may: age-based, disability-based, or the disabled veteran exemption.
The seller's exemptions, tax ceilings and appraisal limitation are not a dependable estimate of your future bill. Purchase-year treatment and later-year treatment can differ. Ask the applicable appraisal district how your closing date, occupancy and exemption application affect each year; the Texas Comptroller's exemption guidance explains statewide eligibility.
A worked example
Illustration, not a quote. A Southlake home sells for $1,100,000. The sellers have lived there twelve years with a homestead cap holding their appraised value down, and one of them is 65 with the school tax ceiling. Their actual tax bill was calculated on a taxable value well below $1.1M.
The buyer's bill will be calculated on the appraisal district's determination of value for the home : informed by the sale, among other data : with the buyer's own exemptions applied. The school homestead exemption : $140,000 off school-district value, as Texas Tax Code §11.13(b) requires school districts to provide : is worth thousands at this price. But the gap between the seller's bill and the buyer's is real money, every year.
The right way to estimate: the values, the exemptions you qualify for, and the rates that apply to your purchase : not the seller's bill, and not an assumption that the purchase price is automatically the taxable value. Ask your agent to run this estimate with you before you offer. (How I work with sellers: the seller's guide.)
What to check before you offer
- The seller's actual tax bill : and which parts of it you will and won't inherit
- Whether the seller has exemptions you won't (over-65 ceiling, disabled veteran)
- Whether a school tax ceiling transfer provision applies to you, if you're 65+
- Your estimated bill: the applicable value, your exemptions, the local rates
- The homestead exemption filing window for your new address : it doesn't carry over; you file it yourself
Common questions
Will my taxes go up automatically after I buy?
Not "automatically" to your purchase price : but the appraisal district will determine a value for the new tax year, and the seller's exemptions and appraisal history may not reflect your situation. Estimate from your own values and rates, not from the seller's bill.
Does the 10% cap follow me to my new home?
No. Do not assume your old home's capped value transfers. Ask the new property's appraisal district when a limitation begins for your ownership and how it calculates the base value.
When do I file the homestead exemption on the new house?
You can file once you own and occupy it. You have a window after occupancy to qualify : check the exact deadline with your appraisal district. Confirm your eligibility and application with the appraisal district rather than assuming the seller's records establish your own exemption.
Want the real tax estimate on a house before you offer? Text me the address: 817-372-9896. I'll run the numbers with you : before you sign anything.
