Property Tax Proration at a Bexar County Closing: The Homestead Cap Reset That Surprises Sellers

Tax proration at closing looks like a boring arithmetic line on the settlement statement. It is not. In Bexar County it is where sellers get quietly overcharged, where buyers show up angry six months after closing, and where a homestead cap that protected you for a decade evaporates the day the deed is filed. If you are selling a San Antonio home in the second half of the year, or selling a long-held homestead where market value has run well ahead of assessed value, read the proration line carefully before you sign.

Here is the short version: the title company will prorate based on the most recent certified tax figure, which is almost always last year's. If this year's bill lands higher — and after a homestead cap resets on sale, it almost always does — the buyer will come looking for the difference unless the contract says they cannot.

How Bexar County property taxes are actually billed

Bexar Appraisal District (BCAD) sets the appraised value. The taxing units — City of San Antonio, Bexar County, your ISD (NEISD, NISD, SAISD, Alamo Heights ISD, Judson, and so on), the hospital district, ACCD, and any MUD or PID — set the rates. The Bexar County Tax Assessor-Collector consolidates and bills. Bills go out in October, are due January 31, and become delinquent February 1.

At any closing during the year, no one yet knows what the final bill will be. Rates for the current tax year are not typically adopted until late summer or early fall. So the title company estimates.

What the TREC contract actually says

Paragraph 13 of TREC 20-17 (One to Four Family Residential Contract — Resale) governs prorations. Taxes for the current year are prorated through the closing date. If the amount of taxes for the current year is not available at closing, proration is based on taxes for the preceding year. The paragraph then includes a critical sentence: if taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available.

That last clause is the reproration obligation. It survives closing. Most sellers do not know it exists until a buyer's attorney sends a demand letter in November.

Why the homestead cap makes this worse

Texas Tax Code § 23.23 caps the annual increase in the assessed value of a residence homestead at 10% per year, no matter how fast market value rises. If you bought in Alta Vista in 2014 for $220,000 and BCAD now says market value is $520,000, your assessed value — the number you actually pay tax on — is far lower because it has only been allowed to climb 10% a year.

Here is what most sellers miss: the cap does not transfer with the property. Under § 23.23(c), when a homestead sells, the cap is removed on January 1 of the following tax year, and the property is reassessed at full market value for the new owner. Even if the buyer immediately files for their own homestead exemption under § 11.13, they start their cap over at the new, uncapped market value.

So the "preceding year" tax number the title company is using to prorate reflects your capped assessed value. The current-year bill the buyer will receive will reflect the uncapped value. The gap can be thousands of dollars.

A concrete example

• Long-held homestead in Mahncke Park (78209 but SAISD, not AHISD — a common mixup)
• Assessed value with cap: $310,000
• Market value per BCAD: $505,000
• Combined tax rate: roughly 2.2% for a SAISD parcel inside the City
• Prior-year tax bill (what title uses): ~$6,820
• Buyer's likely first full bill after cap removal: ~$11,110

If you close July 1 and proration is based on the prior year's $6,820, the buyer gets a credit of roughly $3,410 (half a year). When the actual current-year bill lands and the cap is gone for them, the true prorated share owed by the seller is closer to $5,555. Under Paragraph 13, the buyer can demand the ~$2,145 difference.

The over-65 or disabled tax ceiling is worse

If you are selling because a parent moved to assisted living or passed, pay attention. The § 11.26 school-tax ceiling — the frozen dollar amount an over-65 or disabled homeowner pays to the school district — does not transfer to the buyer. It also does not transfer to heirs who did not themselves qualify. The buyer's first ISD bill will reflect the full rate on the full uncapped value, and title's proration based on the prior frozen amount will be dramatically off. Reproration under Paragraph 13 in these sales routinely runs five figures.

How to protect yourself before closing

1. Ask the title company which figure they are using

Get it in writing. It should be the most recent certified levy from the Bexar County Tax Assessor-Collector. If they are using the current year's estimated levy, ask how they estimated it and whether the estimate accounts for cap removal.

2. Consider negotiating out of reproration

Paragraph 13's reproration clause can be modified by special provisions or an amendment (TREC 39-9). Some sellers negotiate a "final at closing, no reproration" term in exchange for using a current-year estimate that assumes cap removal. Buyers who understand the math will sometimes accept this to lock in certainty. Do not draft this language yourself — have your agent route it through a Texas real estate attorney if the dollars are large.

3. Pull the BCAD record and run the numbers yourself

BCAD's public property search shows appraised value, assessed value, the cap loss (the difference between the two), and the exemptions on file. If your cap loss is large, you now know how big the reproration exposure is.

4. Do not cancel your homestead exemption before closing

Some sellers, having moved out, assume they should notify BCAD. Do not. Your homestead exemption for the current tax year is based on your January 1 status. Canceling mid-year can trigger a partial-year loss of exemption under § 26.10 and inflate the current-year bill for the portion of the year you still owned the home — which you will then owe through proration.

What most people get wrong

• "The buyer's homestead exemption will keep taxes the same." No. The exemption reduces value; it does not restore the cap. The cap restarts at market value.
• "Proration is final at closing." No. TREC 20-17 Paragraph 13 requires reproration once the actual bill is issued unless the contract is amended.
• "The title company will use the current year's rate." Usually not. They use the most recent certified levy, which is last year's, unless you request otherwise in writing.
• "My over-65 ceiling protects the buyer for the rest of the year." It does not. The § 11.26 ceiling is personal to the qualifying owner and dies on sale.
• "MUD and PID assessments are baked into the tax bill." Sometimes yes, sometimes no. In parts of far-north Bexar and along the 1604/281 corridor, PID assessments are billed separately and must be disclosed under Property Code § 5.014. Ask the title company to itemize.
• "I can just refuse to pay the reproration." You can refuse, but the obligation is contractual. Buyers do sue in JP or county court for these amounts, and they usually win.

When to bring in a professional

If you are selling a long-held homestead, a property with an over-65 ceiling, or a home in a PID or MUD, have a Texas real estate attorney or a tax-savvy title officer walk through the proration line before you sign. The cost is small. The exposure is not.

When you are ready to run comps, understand your assessed-to-market gap, or list, start at HomeFinder. Browse recent sales and active competition in your ZIP at /resources, list your home FSBO free at /list-your-home, or find an experienced San Antonio listing agent at /agents who has closed enough Bexar County transactions to spot a proration problem before it becomes a phone call in November.