Central Texas Property Taxes: What Homeowners 65+ Should Know Before Downsizing

Central Texas Property Taxes: What Homeowners 65+ Need to Know Before Downsizing

Living in Central Texas brings sunshine, vibrant communities, and beautiful Hill Country views. But for homeowners age 65 and older—especially those living on fixed incomes—property taxes can be a major factor when deciding whether to move.

Whether you live in Travis, Williamson, or Hays County, understanding your property tax benefits before selling a longtime home can help you accurately evaluate the cost of your next space. As an Austin-based Senior Real Estate Specialist (SRES®), one of the most reassuring facts I share with clients is that you don't have to give up your hard-earned tax protections when you downsize.

How the Texas Over-65 Tax Ceiling Works

One of the most valuable benefits for Texas homeowners age 65 and older is the Over-65 homestead exemption and the related school district tax ceiling, often referred to as a "tax freeze."

The exemption and tax ceiling work together, but they serve different functions:

• The Exemption: Reduces the overall taxable value of your home.

• The Tax Ceiling: Locks in the maximum dollar amount you pay for school district taxes.

Once you qualify, your school district taxes generally cannot increase above your ceiling, even if your home’s appraised value continues to rise. (Note: The appraisal district still assesses your property value each year, but the ceiling limits the school taxes you actually pay.) While major additions can adjust this cap, routine repairs and maintenance will not.

What Happens When You Downsize or Relocate?

One of the best features of the Texas tax ceiling transfer over 65 is its portability. When you sell your residence homestead and move to a new qualifying home anywhere in Texas, you can transfer your tax ceiling.

However, you do not transfer the exact dollar amount. Instead, you transfer the percentage of savings.

For example, if your former home would have generated $10,000 in school taxes without the ceiling, but you only paid $6,000 under your freeze, you were paying 60% of the tax bill. That same 60% rate is applied to establish the new school tax ceiling on your next home.

Moving Between Travis, Williamson, and Hays Counties

If you are downsizing in Austin, TX or moving between surrounding counties, this portability is critical. You can easily request a transfer of your school tax ceiling percentage across county lines.

Keep in mind that city, county, and junior college districts can also adopt their own local option tax ceilings. Unlike the statewide school district freeze, these local ceilings are specific to each taxing unit. Before moving across county lines, it pays to verify local rules so there are no surprises on your tax bill.

Three Steps to Protect Your Tax Benefits

1. Request a Tax Ceiling Transfer Certificate: Contact the appraisal district for your current home (such as Travis Central Appraisal District) to request your official ceiling transfer documentation. (Note: Texas Comptroller Form 50-114-A is an exemption affidavit, not the transfer certificate).

2. File for Your Homestead Exemption: When you purchase your new home, file your exemption application with the new county appraisal district along with your transfer certificate.

3. Verify the New Tax Record: Review your new property tax records to confirm your Over-65 exemption and transferred tax ceiling have been applied correctly.

Planning Your Next Chapter

Downsizing is about more than square footage—it's about less maintenance, lower stress, and a lifestyle that fits where you are today. If you have questions about navigating property tax transfers or finding the right low-maintenance home in Central Texas, visit me at austinwithpatti.com or reach out directly. I am always here to guide you through every step with clarity and compassion.

This article is for general informational purposes only and is not tax or legal advice. Property-tax laws and local policies can change.