The Texas Over-65 School Tax Ceiling and How It Ports to a New Home When You Downsize

If you are 65 or older and thinking about selling the Northwest Austin home you raised your family in, there is a fear I hear almost every time the conversation turns to downsizing: "I have my taxes frozen. If I move, I lose that, right?" It is one of the most common reasons long-tenured owners in 78750, 78759, and 78726 stay in a house that is now too big, too much to maintain, and worth far more than they paid.

The fear is understandable, but the premise is usually wrong. Texas built portability into the over-65 school tax ceiling on purpose, specifically so that turning 65 does not chain you to one address for the rest of your life. The catch is that what transfers is not the dollar amount you are used to seeing on your bill. It is a percentage. Understanding the difference between those two things is the whole game, and it is where most downsizers, and frankly a lot of agents, get it wrong.

This is a general-information guide, not tax or legal advice. Your appraisal district and a CPA who knows Texas property tax should confirm the numbers for your specific situation before you make a move based on them.

What the over-65 school tax ceiling actually is

Texas gives homeowners a residence homestead exemption on their primary home. When you turn 65, or in the year you qualify as disabled, you get something more valuable than an exemption: a ceiling, sometimes called a freeze, on the school district portion of your property tax bill.

Here is what that means in practice. In the year you qualify for the over-65 exemption, the school district taxes on your homestead are capped at that year's amount. From then on, that school tax bill cannot go up, even if your appraised value climbs, even if the school district raises its tax rate. It can only go down. The one exception is significant improvements. If you add a pool, a room, or a major addition, the ceiling is adjusted upward to account for the new construction. Routine maintenance and normal repairs do not raise it.

For a long-tenured owner in Northwest Austin, this is enormous. Values in these zip codes have run up dramatically over the last decade. Owners who locked their school ceiling years ago are frequently paying school taxes on a frozen base while their neighbors who bought recently pay on today's full value. The school district portion is the single largest line on most Central Texas tax bills, so freezing it is where the real money is.

The ceiling applies only to school district taxes. It does not automatically freeze your county, city, or special district taxes. More on those below, because in Travis and Williamson counties the local picture matters.

The exemptions that come with turning 65, and what changed in 2025

The ceiling rides on top of the exemptions, and Texas voters just made those exemptions dramatically larger. This is recent enough that a lot of owners have not absorbed it yet.

In November 2025, Texas voters approved Proposition 13, which raised the school district residence homestead exemption from $100,000 to $140,000, effective for the 2025 tax year. A companion measure, Proposition 11, raised the additional homestead exemption for homeowners who are 65 or older or disabled from $10,000 to $60,000. Stack them together and a qualifying over-65 homeowner now exempts $200,000 of value from school district taxation before the rate is even applied.

To put that in plain terms: a Northwest Austin senior with a homestead now subtracts $200,000 off the top of their home's value for school tax purposes, and then the ceiling freezes whatever is left. State estimates put the average annual savings from the larger exemptions at several hundred dollars for a typical homeowner and closer to $900 or more for an over-65 owner, though the exact figure depends entirely on your value and your local rate.

When exemptions jump like this, ceilings get recalculated downward too, because the ceiling can always fall. If you already had a frozen school bill and the exemption grew, your ceiling should reflect the lower taxable base. This is one more reason to actually read your appraisal notice rather than assume nothing changed.

The part downsizers miss: the ceiling ports, but as a percentage

This is the section that changes people's decisions, so I want to be precise about it.

Under Texas Property Tax Code Sections 11.26 and 11.261, an over-65 homeowner (or a qualifying disabled homeowner) can transfer the tax ceiling to a new homestead anywhere in Texas, in the same school district or a different one. You do not lose the benefit by moving. But the dollar amount of your old ceiling does not follow you. What follows you is the percentage of reduction the ceiling gave you.

How the percentage transfer is calculated

The appraisal district looks at your old home and asks: what percentage of the full, un-frozen school tax were you actually paying under your ceiling? Then it applies that same percentage to what the school taxes would be on your new home.

The Comptroller's own illustration makes it concrete. Suppose your ceiling on your old home was $100, but without the ceiling you would have owed $400. You were paying 25 percent of the full amount. Now you move. If the school taxes on the new home would normally be $1,000 in the first year, your new ceiling is set at 25 percent of that, or $250. Same percentage, new dollar figure.

So the ceiling absolutely transfers. It just re-expresses itself as a percentage applied to the new home's value rather than as the old dollar number you had memorized.

What this means when you downsize to a less expensive home

Here is the honest part that works in a downsizer's favor. If you sell a large Northwest Austin house and buy something smaller and less expensive, the school taxes on the new home before any ceiling will be lower, because the home is worth less. When your transferred percentage gets applied to that smaller number, your new dollar ceiling is usually lower than your old one.

In other words, downsizing to a cheaper home does not just cut your maintenance, insurance, and utility costs. It typically drops your frozen school tax bill in dollar terms too, because the same percentage of a smaller tax is a smaller number. The owners who are terrified of "losing the freeze" often end up with a lower frozen bill than they had, not a higher one.

What the percentage transfer does not do is hand you a rock-bottom bill on an expensive home. If you sell a modest house with a deep freeze and buy a much pricier one, you keep the percentage, but a percentage of a much larger tax is a larger number.

What happens if you move up instead of down

Not every over-65 move is a downsize. Some owners move to be near grown children, or into a newer single-story home that costs more than the one they left. The mechanics are identical: your percentage transfers, and it applies to the new home's higher school tax base. You still come out ahead of a buyer with no ceiling at all, but you should run the actual first-year numbers with the appraisal district before assuming the move is tax-neutral. This is exactly the kind of figure I will not estimate for you in a blog post, because it turns on your specific old and new values.

How to actually transfer the ceiling

The transfer is not automatic. Selling your old home and buying a new one does not move the ceiling on its own. You have to request it and file for it. The process is straightforward but easy to forget in the middle of a move.

• Request a tax ceiling certificate from your former appraisal district. This is Texas Comptroller Form 50-272, the School Tax Ceiling Certificate for Homeowner Age 65 or Older, Disabled, or Surviving Spouse Age 55 or Older. It documents your old ceiling and the percentage you were paying. In our area that means Travis Central Appraisal District (TCAD) or Williamson Central Appraisal District (WCAD), depending on where your old home sits.
• File a residence homestead exemption application on the new home, and claim the over-65 exemption on it, at the appraisal district for the new property.
• Submit the ceiling certificate to the new appraisal district so they can calculate your transferred ceiling using your percentage.

Do not assume the two appraisal districts will talk to each other for you. If your old home was in Travis County and your new one is in Williamson County, or vice versa, you are the one connecting the paperwork. Build it into your moving checklist alongside your address changes.

County, city, and other local taxes are a separate question

The school tax ceiling under Section 11.26 is state-mandated. Every Texas school district must offer it to qualifying over-65 owners. The other taxing units on your bill, your county, your city, your community college district, and any special districts, are a different story.

Section 11.261 lets those local taxing units adopt their own optional over-65 or disabled ceiling, and many have. But it is optional, it varies unit by unit, and the amounts and exemptions differ from one jurisdiction to the next. A Northwest Austin owner's total picture might include a school ceiling that always applied, plus a county ceiling, a city ceiling, or a community college ceiling that some entities offer and others do not.

Because our footprint straddles Travis and Williamson counties, and because the same 78750 or 78726 address can sit in different combinations of city, county, and district lines, this is not something to guess at. Pull your actual tax bill, look at each taxing unit line by line, and ask TCAD or WCAD which of those units grant you an over-65 exemption or ceiling and whether those transfer. I wrote more about how the two counties compare on taxes generally in my Travis County vs Williamson County property tax guide, and the mechanics of the underlying exemptions and the appraisal cap in my guide to Northwest Austin property taxes and exemptions.

Surviving spouses and other edge cases

A few situations come up often enough with senior clients that they are worth spelling out.

Surviving spouse age 55 or older. If an over-65 homeowner dies, a surviving spouse who is at least 55 at the time of death can keep the over-65 exemption and the school tax ceiling, as long as the home remains their primary residence. This matters for widows and widowers who worry that the freeze died with their spouse. It did not, provided the age and residence conditions are met.

Both spouses on the deed. You only need one owner living in the home to be 65 or older to qualify the homestead for the over-65 exemption and ceiling. You do not both have to have turned 65.

Timing your birthday year. The over-65 exemption applies for the entire tax year in which you turn 65. You do not have to wait until your birthday to file. If you are turning 65 this year, file now.

You still have to live there. The ceiling is a homestead benefit. It applies to your primary residence, not a rental, a second home, or an investment property. When you move, the ceiling moves with you to your new primary residence, not to the home you left behind.

A note on the tax deferral option, which is a different tool

Owners sometimes confuse the ceiling with the over-65 property tax deferral. They are not the same thing. The ceiling caps your school taxes while you keep paying them each year. The deferral is a separate right that lets a homeowner 65 or older postpone paying property taxes on their homestead entirely, with interest accruing, until the home is sold or the owner passes. It is a powerful option for owners who are house-rich and cash-tight, but it is a different mechanism with real tradeoffs, and it deserves its own full treatment rather than a footnote here. If that is your situation, flag it with your CPA specifically.

What this means for a Northwest Austin downsizer

Put the pieces together and the picture for a long-tenured 78750, 78759, or 78726 owner looks very different from the fear I opened with.

You are probably sitting on substantial equity, in a home that is larger and higher-maintenance than you need, paying county and city taxes that may or may not be frozen, with a school tax ceiling you assumed you would forfeit if you moved. In reality, that ceiling ports as a percentage, and if you downsize to a less expensive home, the transferred percentage usually produces a lower frozen school bill, not a higher one. The larger 2025 exemptions, $140,000 plus another $60,000 for over-65 owners, reduce the taxable base further before the ceiling even applies.

None of that decides whether you should sell. Carrying costs, the emotional weight of a long-held home, where you want to be next, and what is actually available at the price and single-story layout you want all matter more than the tax mechanics. But the tax mechanics should stop being the reason you do not explore the move. I walk through the broader sell-before-you-downsize decision in this post on selling before downsizing, and the relocation-side homestead and cap rules in my guide to Texas homestead exemptions and property tax caps.

Frequently asked questions

If I sell my Northwest Austin home and buy a smaller one, do I lose my tax freeze?

No. The over-65 school tax ceiling transfers to your new Texas homestead. What transfers is the percentage of full school tax you were paying under the ceiling, not the exact dollar amount. Applied to a less expensive home, that percentage usually results in a lower frozen bill than you had before.

Does the dollar amount of my frozen school tax move with me?

No, and this is the most common misunderstanding. The dollar figure does not transfer. The appraisal district calculates the percentage your ceiling represented on your old home, then applies that same percentage to what the school taxes would be on your new home in the first year.

How do I transfer my over-65 tax ceiling to a new home in Texas?

Request a School Tax Ceiling Certificate, Comptroller Form 50-272, from the appraisal district where your old home is located. File a homestead exemption application with the over-65 exemption on your new home at its appraisal district, and submit the ceiling certificate there so they can compute your transferred ceiling.

Can I transfer the ceiling from Travis County to Williamson County or the other way?

Yes. The transfer works anywhere in Texas, across school districts and across counties. If you are moving between TCAD and WCAD, you handle the certificate yourself: get it from the old district and take it to the new one. Do not assume the districts coordinate for you.

What is the Texas homestead exemption now that Proposition 13 passed?

For the 2025 tax year, the school district residence homestead exemption is $140,000, up from $100,000. Homeowners who are 65 or older or disabled add another $60,000 under Proposition 11, for a combined school district exemption of $200,000 before the tax rate and any ceiling are applied.

Does the ceiling freeze all of my property taxes?

No. The state-mandated ceiling applies only to school district taxes. Counties, cities, and other local taxing units may adopt their own optional over-65 ceiling under Section 11.261, but it is not guaranteed and it varies by jurisdiction. Check each taxing unit on your bill with your appraisal district.

My spouse who qualified for the over-65 exemption passed away. Do I keep the freeze?

If you were at least 55 at the time of your spouse's death and the home remains your primary residence, you can keep the over-65 exemption and the school tax ceiling. Confirm the specifics with your appraisal district, because the age and residence conditions must be met.

What happens to my ceiling if I remodel or add on to the new home?

Normal maintenance and repairs do not change your ceiling. Significant new improvements, like an addition or a pool, cause the ceiling to be adjusted upward to reflect the value of the new construction. The base freeze on the existing home stays intact.

The honest summary

The over-65 school tax ceiling is one of the most valuable benefits a long-tenured Texas homeowner has, and the belief that you forfeit it by moving keeps a lot of Northwest Austin seniors in homes that no longer fit their lives. You do not forfeit it. It ports to your next Texas homestead as a percentage, and for most people downsizing to a less expensive home, that percentage produces a frozen school bill that is the same or lower in dollars, not higher. The 2025 exemption increases only widen that advantage.

What you do have to do is the paperwork: get the Form 50-272 ceiling certificate from your old appraisal district, file for the homestead and over-65 exemption on the new home, and hand the certificate to the new district. And you have to look at your county and city lines separately, because those follow their own optional rules.

Before you make a decision with real money attached, confirm your specific numbers with your appraisal district and a CPA who works in Texas property tax. Once the tax fear is off the table, the downsizing decision comes down to the things that actually should drive it: where you want to be, what you want to stop maintaining, and what is available. If you want help running the actual before-and-after on a specific move in 78750, 78759, or 78726, that is a conversation worth having.