Relocation · Licensed in Both States
Moving From California to Texas
I am licensed on both ends of this move. Three things catch Californians out, and only one of them is the price of the house.
Overview
Your paycheck gets bigger. Your escrow payment does too.
Texas has no state income tax, and that is the headline everyone arrives with. What arrives with it is a property tax bill calculated very differently from the one you left. Texas runs an effective property tax rate of roughly 1.245% of home value — ninth highest in the country — against California’s roughly 0.693%. But the rate comparison understates the shock, because under Proposition 13 your California assessment has been creeping up at a capped rate for as long as you have owned, while Texas reassesses at market value the moment you buy. If you have owned in California for fifteen years, you are not comparing 0.693% to 1.245%. You are comparing a heavily suppressed assessed value to a fresh, full-market one. Texas softens this in three specific ways worth knowing: a $140,000 school district homestead exemption (raised from $100,000 and applied retroactively to the 2025 tax year), an additional $60,000 exemption at age 65, and a 10% annual cap on how fast your homestead’s assessed value can rise. You have to file for the homestead exemption — it is not automatic. Because lenders qualify you on the full payment including taxes, all of this lands directly in what you can borrow.
What actually changes
The six things I work through on a California-to-Texas file
- Getting pre-approved in Texas before your California home closes
- Documenting sale proceeds as your down payment
- Qualifying while you still carry the California mortgage
- Modeling the Texas property tax bill into your real payment
- Filing the homestead exemption once you close
- Understanding Texas cash-out rules before you ever need equity
The details
What to plan for
Property tax reality
Roughly 1.245% effective in Texas versus 0.693% in California — and Texas reassesses at market while Prop 13 held your old basis down.
The $140,000 exemption
The school district homestead exemption is $140,000, plus $60,000 more at 65, with a 10% annual cap on assessed value growth. File for it — it is not automatic.
Loan limits drop sharply
FHA runs $541,287 in Harris County, $571,550 in Travis, $563,500 in Dallas. In a California ceiling county it was $1,249,125. See Texas lending.
Jumbo arrives sooner
Conforming is $832,750 nationally. A $900,000 Austin purchase is jumbo territory — the same price in Santa Clara County was high-balance conforming.
Using your sale proceeds
Before your California home closes, Fannie Mae lets a lender estimate proceeds at 90% of listing price minus liens. After it closes, the settlement statement is required.
Cash-out later is different here
Texas caps cash-out at 80% of value by state constitution, with a 12-day cooling-off period. Plan for it before you need it. Compare states.
Making the move? Let us map the numbers first.
Send me your California sale price and mortgage balance and your Texas target price. You will get the real payment, taxes included. Call (303) 557-3846 or start online.
California vs Texas: the numbers that change
| California | Texas | |
|---|---|---|
| Effective property tax rate | ~0.693% | ~1.245% (9th highest in the U.S.) |
| State income tax | Yes | None |
| How your home is assessed | Prop 13 caps growth on your existing basis | Reassessed at market value when you buy |
| Homestead exemption | Modest | $140,000 school district exemption, +$60,000 at 65 |
| Annual assessment cap | Prop 13 | 10% per year on a homestead |
| 2026 FHA limit | Up to $1,249,125 in 13 counties | $541,287 Harris · $571,550 Travis · $563,500 Dallas · $557,750 Bexar |
| 2026 conforming limit | $832,750 | $832,750 |
| Maximum cash-out refinance | Typically 80% (program rules) | 80% by state constitution, once per 12 months |
Common questions about moving from California to Texas
Can I get pre-approved in Texas before my California home sells?
Yes. Before the sale closes, Fannie Mae guidelines let a lender estimate your net proceeds at 90% of the listing price minus all liens, with that adjustment factor varying by market conditions. Once the sale closes, the lender must obtain the settlement statement from the California sale showing sufficient net proceeds — before or at the same time as your Texas closing. A copy of the sales contract alone is not enough.
Can I buy in Texas before I sell in California?
Often, yes, but the mechanics matter. If you use a bridge or swing loan, Fannie Mae will waive counting that payment against your debt-to-income ratio when you provide a fully executed sales contract on the California home and confirmation that financing contingencies have been cleared. Without both, the payment counts and you have to qualify carrying everything at once.
Will my property taxes really be higher in Texas?
Almost certainly, and by more than the rate difference suggests. Texas runs about 1.245% effective versus California’s 0.693%, but the bigger factor is assessment. Proposition 13 has been holding your California assessed value below market for as long as you have owned. Texas assesses at market from day one. The offsets are real — no state income tax, a $140,000 school district homestead exemption, and a 10% annual cap once it is your homestead — but budget for the escrow payment, not the rate.
Do I need a jumbo loan in Texas?
Sooner than you might think. The 2026 conforming limit is $832,750 nationally, and Texas FHA limits sit far below California’s — $541,287 in Harris County against $1,249,125 in a California ceiling county. A $900,000 purchase that would have been high-balance conforming in Santa Clara County is jumbo in Austin. Worth knowing before you set a budget.