San Antonio May Raise Property Tax Rate for First Time in 30+ Years

San Antonio city officials are weighing a potential increase in the property tax rate for the 2026 fiscal year — a move not seen in over three decades. If approved, the change could cost homeowners an additional $57 to $67 annually for a home valued at $235,000 with a homestead exemption.
Why the City Is Considering a Tax Rate Hike
City Manager Erik Walsh shared that the city hasn’t raised the property tax rate since he was in college. “It’s been some time,” he said during a budget session last week, acknowledging that public reaction may not be favorable.
San Antonio’s leadership is facing a projected budget shortfall that could exceed $150 million by 2027. While the city is reviewing potential budget cuts, slower revenue growth — driven by low consumer confidence and a cooling real estate market — has made property taxes an essential topic of discussion.
Slowing Property Value Growth
Over the past few years, rising home values allowed the city to generate more revenue without raising tax rates. In fact, property values increased by 22% in 2022, 15% in 2023, and 2.4% in 2024, allowing San Antonio to stay within Texas' 3.5% property tax growth cap.
However, 2025 is shaping up differently. According to Bexar County Chief Appraiser Rogelio Sandoval, property values have only grown by around 1.5% this year — and are expected to dip further as homeowners file valuation appeals.
This stagnant housing market, combined with inflation and high interest rates, has placed pressure on city finances. “If they’re going to try to generate more revenue, they would have to consider raising that tax rate,” Sandoval said.
Homestead Exemption Will Remain
Despite the possible tax increase, homeowners can rest assured: San Antonio’s homestead exemption is here to stay.
Introduced in 2022 and later expanded to the maximum 20%, the exemption reduces taxable home value for those living in their primary residence. Walsh emphasized its importance, stating it’s been a crucial tool in helping families stay in their homes.
The city also continues to offer tax freezes and additional relief for seniors, disabled veterans, and other eligible groups.
How Much Could the Tax Rate Increase?
To meet the 3.5% allowable growth target, the city estimates it would need to increase the tax rate from 54.159 cents to 55.406 cents per $100 of valuation. Legally, San Antonio could go as high as 55.862 cents by using its “unused increment” — unused tax rate increases from previous years.
These figures may still change, depending on how many property valuation appeals are approved in the coming months.
CPS Energy Reinvestment Plan on Hold
One source of relief may come from CPS Energy, the city-owned utility company. In recent years, the city redirected a portion of CPS Energy profits back into the utility to help avoid rate hikes.
However, city leaders now suggest pausing those reinvestments, potentially freeing up nearly $60 million to cover operational expenses. City CFO Ben Gorzell explained that redirecting these funds could help close the anticipated budget gap.
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