Does Texas tax military retirement?

No. Texas has no income tax, so military retired pay and SBP aren't taxed.

What is the Texas homestead exemption in 2026?

$140,000 off school taxable value for all homeowners, and $200,000 total for homeowners 65 or older or disabled. It applies to school district taxes only.

Do 100% disabled veterans pay property tax in Texas?

No property tax on their homestead, if the VA pays them at the 100% rate (including Individual Unemployability).

Are property taxes high in Texas?

Yes. The average is about 1.40% of home value a year, among the higher rates in the country.

Texas retirement taxes in 2026: no income tax, and the property tax breaks that matter

Short answer

Texas has no state income tax, so Social Security, pensions, IRAs, 401(k)s and military retired pay are not taxed. Property tax is where Texas collects instead, at about 1.40% of home value a year, roughly twice Kentucky's or Tennessee's rate. Since tax year 2025, homeowners get a $140,000 school-tax homestead exemption, and owners 65 or older get $60,000 more ($200,000 total) plus a freeze on school taxes. Veterans paid at the 100% disability rate pay no property tax on their home.

Not tax advice. Rules change; confirm with the Texas Comptroller, your county appraisal district or a tax professional.

Texas at a glance (2026)

	Texas
State income tax	None (banned by the Texas Constitution)
Social Security, pensions, IRA, 401(k)	Not taxed
Military retired pay and SBP	Not taxed
School homestead exemption	$140,000 (all homeowners, tax year 2025 on)
65+ or disabled	$60,000 more, $200,000 total off school taxable value, plus a school tax ceiling
100% disabled veteran	Full exemption on the homestead (100% rating or Individual Unemployability)
Partially disabled veteran	$5,000–$12,000 exemption by rating, on one property
Average property tax	About 1.40% of home value a year

Income tax

None. The Texas Constitution (Art. VIII §24-a) bars a tax on individuals' net income. That covers Social Security, pensions, IRA and 401(k) withdrawals, military retired pay and the Survivor Benefit Plan. Source: Texas Legislature, HJR 38 (86th Legislature), enrolled text.

Property tax: the real cost in Texas

Texas has no income tax but higher property taxes than most states: about 1.40% of home value a year on average. Source: Tax Foundation, 2026 Texas profile.

Homestead exemptions (tax year 2025 and later)

$140,000 off your home's value for school district taxes, for every homeowner who lives in the home.
$60,000 more if you're 65 or older or disabled, for $200,000 total off school taxable value (the extra was $10,000 before).
Voters approved both on November 4, 2025.
These apply to school taxes only. Counties, cities and other taxing units set their own, usually much smaller, exemptions (an optional general exemption up to 20% of value, and a 65+ exemption of at least $3,000 where adopted).

Sources: Texas Comptroller, property tax exemptions (Dec 2025) and Property Tax Today (Jan 2026); SB 4 and SB 23 (89th Legislature).

School tax ceiling for 65+

Once you qualify for the 65+ exemption, your school district taxes on that home are capped at the amount you paid in the first qualifying year. The cap only rises if you add improvements (like an addition). If you move within Texas, you can carry the ceiling's percentage to the new home with a Tax Ceiling Certificate. A surviving spouse 55 or older keeps it. Source: Texas Governor's Committee on People with Disabilities, Homestead Exemptions (Dec 2025).

Other options for 65+ homeowners: defer homestead taxes while you live there (interest accrues at 5% a year), or pay them in four installments. Source: Texas Comptroller, property tax payment options.

Disabled veterans

100% disabled veteran: a full exemption on the homestead if the VA pays you at the 100% rate, through a 100% rating or Individual Unemployability. An unremarried surviving spouse keeps it; if they move, the new exemption is capped at the prior dollar amount.
Partial exemption by rating, on any one property you own:

VA disability rating	Exemption off home value
10–29%	$5,000
30–49%	$7,500
50–69%	$10,000
70–100%	$12,000
65+ with at least 10%, or blind or loss of a limb	$12,000

Veterans can file up to five years late for both. Sources: Texas Comptroller, 100% disabled veteran FAQ and disabled veteran FAQ.

How to apply

File Form 50-114 with your county appraisal district (Form 50-135 for the partial veteran exemption). The general deadline is April 30. If you turn 65 during the year, you qualify that year. Source: Texas Comptroller, property tax exemptions.

Common mistakes

Thinking "no income tax" means low taxes. Texas property tax runs about twice Kentucky's.
Applying the $140,000 or $200,000 to the whole bill. It's school taxes only.
Assuming the freeze covers every tax. Only school taxes are frozen, unless your city or county adopted its own ceiling.
Thinking only a 100% rating gets the full exemption. Individual Unemployability paid at the 100% rate qualifies too.
Trusting older appraisal-district handouts that still show $25,000 and $10,000.

Moving here?

Retiring to San Antonio: what your home sale leaves you, and the drive to the VA
PCS: Joint Base San Antonio · Fort Hood · Fort Bliss
Federal rules: Is military retirement taxable?

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FAQ

Does Texas tax military retirement?: No. Texas has no income tax, so military retired pay and SBP aren't taxed.
Does Texas tax Social Security or pensions?: No.
What is the Texas homestead exemption in 2026?: $140,000 off school taxable value for all homeowners, and $200,000 total for homeowners 65 or older or disabled. It applies to school district taxes only.
Do 100% disabled veterans pay property tax in Texas?: No property tax on their homestead, if the VA pays them at the 100% rate (including Individual Unemployability).
Are property taxes high in Texas?: Yes. The average is about 1.40% of home value a year, among the higher rates in the country.

Sources

Last reviewed October 21, 2026. Not tax advice.