Retiring to the Texas Hill Country: The Over-65 Exemption, School Tax Freeze, and Fixed-Income Math

Texas property tax has two layers that matter here: the school district layer, which is the largest single slice of most bills, and the city, county, and special district layers around it. The homestead exemptions attack the school layer first. Since the 2025 tax year, the general residence homestead exemption removes $140,000 of your primary home's appraised value from school district taxes, up from $100,000, after Texas voters approved Proposition 13 in November 2025 [1][4]. On top of that, an owner who is 65 or older, or disabled, qualifies for an additional $60,000 school exemption under the companion Proposition 11, up from $10,000 [1][3]. Combined, an over-65 owner removes $200,000 of value from the school district lines.

The filing is a one-time step. You submit the residence homestead exemption application, Form 50-114 or the county appraisal district's equivalent, to the appraisal district for the county where the home sits, and the exemption stays in place as long as that home remains your primary residence [1]. Counties and cities are allowed to layer their own optional exemptions on top, so the effective number in your specific taxing jurisdictions can be higher than the state floor [1]. For an owner who qualifies at 65, the additional $60,000 is automatic once the base exemption is filed and the appraisal district has your date of birth on record. It does not require a second application for most owners, and our complete homestead exemption guide walks through the application and the deadlines county by county.

The exemption reduces the tax base. The freeze, under Texas Tax Code Section 11.26, is the more powerful protection, because it caps the school district tax on your homestead in dollars [2]. Once you qualify for the over-65 or disabled exemption, the school district may not charge more in any later year than the dollar amount imposed in the first tax year you qualified. Values can climb, school tax rates can climb, and your school line stays put [2].

Three things can raise a frozen total, and a retiree building a long-term budget should know all three. First, new improvements beyond ordinary repairs and maintenance add the school tax on the added value [2]. A major addition or a rebuilt kitchen can attach a new school line to the old frozen base. Second, voter-approved school debt passed after your qualifying year can add the tax needed to pay it [2]. Third, moving to a different homestead resets the ceiling to that new home's first qualifying year, which is the one case where a retiree consciously restarts the freeze [2]. The reverse also matters: the freeze follows the qualifying owner, and if the qualifying homeowner dies, the surviving spouse who is 55 or older generally keeps the exemption and the ceiling for life [2]. For a California couple where one spouse is older, that surviving-spouse rule is often the deciding reason the younger spouse wants the homestead in both names.

The 2025 legislative session tightened the floor for mid-year qualifiers. If you turn 65 after January 1, the two-year comparison rule in Section 11.26(a-11), clarified by SB 2520, keeps your ceiling from being spiked by a partial first year [2][5]. The practical translation: a couple closing on a Boerne home in September, with one spouse turning 65 in November, should file the exemption immediately at closing and expect the freeze to settle into its permanent amount the following tax year. Confirming the exact sequence with the appraisal district costs one phone call and removes a whole category of surprise.

California retirees come to Texas with a specific tax feature in their rearview mirror: California taxes pension income, traditional 401(k) withdrawals, and IRA distributions as ordinary income, on brackets that start at 1% and climb toward the top rates [6][8]. Social Security retirement benefits are lucky, because California exempts those from state tax, so that income is not taxed in California either [6]. The California tax load lands on the accounts a retiree actually lives on: the pension and the IRA.

Texas has no state personal income tax at all, so every retirement income source carries a zero state rate: pensions, 401(k) and IRA withdrawals, Social Security, military retirement pay [7]. Federal tax treatment does not change with the state line, so the savings comparison is state-level only, which is exactly how the two retirement guides I recommend, income tax arbitrage with real monthly numbers and the estate plan reset for California Texans, frame the math.

The size of the state tax saving depends entirely on how much of your income comes from taxable accounts. The illustrative example below uses a couple drawing $60,000 a year from a traditional IRA, since that is the most common shape of a California retirement portfolio.

Here is the tradeoff that keeps Texas retirement math honest. Texas property tax rates are higher than what a recent California buyer pays, and the median-priced Texas home is dramatically cheaper, so the bill still usually wins in Texas, but the rate differences matter between towns. Tax year 2025 combined rates run about 1.86% in Boerne and Kendall County, around 2.27% in San Antonio in Bexar County, and roughly 1.6% to 1.7% inside Fair Oaks Ranch on the Kendall and Bexar sides respectively, before exemptions [12]. A recent California buyer under Proposition 13 typically pays roughly 1.1% to 1.2% [12].

The second half of the math is the bill, not the rate. In Boerne, a $505,000 median-priced home at the combined 1.86% rate starts around $9,400 a year in total property tax before exemptions [9][12]. For an over-65 owner, the $200,000 exemption removes about $2,022 of school tax on the Boerne ISD line, and the school freeze then keeps that school line flat in the first qualifying year [2][3][4][12]. The separate 10% appraisal cap on homestead value growth limits how fast the appraised value can climb, but it does not cap the bill in years when rates rise or voters approve new debt [13].

The question I hear most from California retirees is not about taxes; it is about doctors. The honest geography is good for most needs and less good for the most specialized ones. Two freestanding 24/7 emergency centers sit right at the edge of the Hill Country: Methodist ER Boerne at 134 Menger Springs Road inside Boerne city limits, and Fair Oaks Emergency Room at 27638 I-10 West at Boerne's western edge, the closest ER to Fair Oaks Ranch [14][15]. For routine and urgent care, a Boerne or Fair Oaks Ranch retiree is a short drive from care with a hospital system behind it.

Full inpatient care and the specialists live in San Antonio. Methodist Hospital Stone Oak sits roughly 12 miles from Fair Oaks Ranch, and the South Texas Medical Center, anchored by Methodist Hospital and University Hospital with its Level I trauma center, is about 20 to 25 minutes from Boerne down I-10 East [16]. The medical center is also where the Audie L. Murphy VA Hospital serves the region's veterans. The practical pattern local retirees settle into: primary care and routine imaging in Boerne, annual specialists and planned procedures in the medical center, urgent care minutes away at either ER. Medicare Advantage competition is strong in the San Antonio market, with 59 plans from 11 carriers and an average plan premium around $16 a month, which means plan portability and out-of-area coverage deserve real comparison before you commit to a carrier [17].

The Hill Country healthcare overview and the healthcare guide for new residents both dig into hospital systems and drive times by community. For a retiree, the planning step is simple and worth doing before the move: choose a Medicare Advantage or Medigap plan whose network includes the Methodist and University Health systems on the San Antonio side, not just the Boerne urgent care sites, so a specialist referral never forces a plan change.

Most Hill Country new construction is single-story ranch style, on a slab, with the primary suite and laundry on one level, which is exactly the aging-in-place shape many California retirees want without a remodel. The tradeoff is heat exposure on a slab versus a California crawl space or hillside foundation, a topic our Hill Country maintenance guide covers honestly.

The area also has real 55-plus options. In Boerne, Regency at Esperanza is the Toll Brothers age-qualified collection inside the Esperanza master-planned community, with resort amenities and homes starting around the high four hundreds [19][20]. It is also the closest true 55-plus community to Fair Oaks Ranch, which has no dedicated age-restricted community of its own [20]. In San Antonio, Del Webb's Hill Country Retreat on the west side is the largest age-qualified community, with a 28,000-square-foot clubhouse and homes mostly in the high $300,000s to mid-$600,000s [18]. A retiree who wants acreage, horses, or a custom build instead of a managed community is better served by the broader Hill Country inventory, at the price of owning the maintenance directly.

Whatever shape a retiree prefers, the county and school district lines on the specific lot matter more than the community brochure, and the HOA resale certificate plus the county appraisal district record answer both in one afternoon. For Fair Oaks Ranch specifically, our community features guide shows how the two-tier HOA and the three-county split change the monthly total from one street to the next.

Here is the budget table I build with retiree clients, and it is the part of this article I most want a reader to treat as a starting point rather than an answer. It assumes a 30-year fixed mortgage at 7% with 20% down, which matches the late-September 2026 Freddie Mac average, and it applies the modeled property tax from Section 4 for an over-65 owner with the exemption filed [9][10][11][12]. The housing line pales next to the widest California comparison, and the genuinely fixed lines, property tax and HOA, are the ones worth verifying on the exact lot.