Two cities adopted their 2026 property tax rates three days apart this September. Terrell Hills set its rate at $0.378167 per $100 of value on September 14. San Antonio, which includes Terrell Heights, set its rate at 56.288 cents per $100 on September 17, up from 54.159 cents. On paper that is a gap of almost 19 cents per $100, which suggests Terrell Hills is the clear bargain.
For many buyers, it isn't. San Antonio exempts a large share of an owner-occupied home's value from city tax. Terrell Hills, according to the latest published county table, exempts none. Once the exemptions are applied, the city tax gap between these neighbors depends on whether the buyer will live in the house, rent it out, or qualify as a senior homeowner. For one of those owners, the advantage flips to San Antonio.
Two rates, two different sets of rules
Terrell Heights is defined in the City of San Antonio's 2001 Northeast Inner Loop plan as the triangle formed by Eisenhauer Road, Austin Highway, and North New Braunfels Avenue. The same plan places the City of Terrell Hills just to the south, past Rittiman Road. The housing stock across this part of town runs to modest cottages, most built in the 1940s, according to a 2021 San Antonio Report profile of the neighborhood. Similar houses can sit under different city governments, with different rules for taxing them.
The City of San Antonio's FY 2027 proposed budget says San Antonio's rules include the maximum general residence homestead exemption Texas allows, 20% of assessed value. Owners who are 65 or older or have a disability get an additional $85,000 off their assessed value for city tax purposes. San Antonio also freezes the city tax for homesteaded owners who are 65 or older or disabled, so this year's rate increase does not necessarily raise their city bill.
Terrell Hills has none of that on record. The Bexar County Tax Collection System's 2025 jurisdiction report, the most recent detailed exemption table published, lists Terrell Hills' homestead, over-65, and disabled exemptions at zero. The city's 2026 tax rate worksheet also reports $0 in homesteads under a 65-and-over tax ceiling, so there is no city tax freeze in this year's calculation.
So one city charges a higher rate on less of the value, and the other charges a lower rate on all of it.
The same house, three different owners
The arithmetic below assumes a home appraised at $500,000. It covers only the city line on the tax bill, using the 2026 adopted rates and the exemption amounts above. The figures are illustrative, not a tax estimate for any specific property.
| Owner situation | San Antonio, 56.288¢ | Terrell Hills, 37.8167¢ | Lower city bill |
|---|---|---|---|
| No homestead exemption, such as a rental or second home | $2,814 on the full $500,000 | $1,891 on the full $500,000 | Terrell Hills, by about $924 |
| Owner-occupied with a homestead exemption | $2,252 on $400,000 after the 20% exemption | $1,891 on the full $500,000 | Terrell Hills, by about $361 |
| Homesteaded owner 65 or older | $1,773 on $315,000 after both exemptions, before the freeze | $1,891 on the full $500,000 | San Antonio, by about $118 |
The rate gap is biggest for an investor and much smaller for a household that lives in the home. For a qualifying senior it reverses, and that is before San Antonio's freeze holds the city portion steady in future years.
For a typical buyer, the 20% exemption takes San Antonio's effective homestead rate from 56.288 cents down to about 45 cents per $100 of appraised value. That still sits above Terrell Hills' 37.8 cents, but the gap shrinks from roughly 19 cents to roughly 7. On a $500,000 house, that is the difference between a $924 question and a $361 one.
Why the gap for rentals just got wider
San Antonio's increase this year lands hardest on property that can't claim a homestead exemption. When the rate went up, the San Antonio Report noted that properties without a homestead exemption, including rentals, second homes, and businesses, are likely to see a bigger increase than the city's average-homeowner estimate of about $2.95 a month.
The reason for the increase matters to anyone holding property on the San Antonio side. The city started its budget process facing rising costs, falling property values, and state limits on revenue growth, with a projected General Fund shortfall of nearly $158 million through FY 2028. To close it, the city used property tax capacity it had left unused over the previous two years. In April 2026, the San Antonio Report found Bexar County single-family values down about 0.11% from a year earlier. By May, KSAT reported that the city expected a 2.13% drop in its taxable value after protests, appeals, and exemptions.
Terrell Hills is raising revenue too. Its ordinance states that the maintenance and operations rate was effectively raised 5.9%, and its 2025 rate was $0.357994. Neither side of the line is standing still, so a comparison run this fall shows where things stand now, not where they will stay.
Alamo Heights, a few minutes west, works as a third reference point. Its 2026 rate is $0.402 per $100. The Alamo Heights FY27 budget lists no general homestead deduction, but it does freeze the city tax for owners 65 and older or disabled at the amount owed in the year they qualify. On the same $500,000 house, that comes to about $2,010 before any freeze. Each of the three cities structures relief differently, and the headline rate captures only part of it.
What the city line buys on an ordinary week
Tax rate is half of the trade. The other half is what each city provides, and the service schedules differ in ways a homeowner notices quickly.
- Police. Terrell Hills runs its own department, listing 15 certified officers and one reserve officer. Terrell Heights is served by the San Antonio Police Department.
- Fire and EMS. Terrell Hills has its own fire and EMS department. San Antonio residents are served by the San Antonio Fire Department's EMS division.
- Garbage. Terrell Hills collects curbside twice a week by sector, Tuesdays and Fridays in the north and Mondays and Thursdays in the south. The city does not supply cans. San Antonio collects once a week from city-issued brown carts.
- Recycling. Terrell Hills picks up every Wednesday. San Antonio collects its blue recycling and green organics carts weekly on the same day.
- Brush. Terrell Hills aims to collect brush weekly at each residence, with timing that varies by volume and season. San Antonio's standard curbside brush and bulky service runs twice a year, and extra pickups are available for a fee.
- Permits. Terrell Hills takes applications through My Government Online and asks for inspection requests by 4 p.m. on the prior business day. In Terrell Heights, residential permits go through San Antonio's Development Services Department, and code complaints go through 311.
For a buyer planning a renovation on a 1940s cottage, permit and inspection routines matter as much as the tax rate. For a household with mature trees, weekly brush pickup versus twice-yearly pickup changes how a yard gets maintained.
Before writing an offer on either side
- Find out which city the address is in before comparing anything. Names, street patterns, and housing styles overlap in this part of town.
- Decide how the home will be owned. Owner-occupied, rental, and senior homestead are three different tax scenarios at the city level.
- Look up the full list of taxing units with the Bexar Appraisal District. The city rate is one line on the bill, and county, hospital district, community college, and other units each set their own rates and exemptions.
- Price the services you will actually use, such as trash cans you buy yourself in Terrell Hills or paid extra brush pickups in San Antonio.
- Ask a tax professional to confirm the exemptions you qualify for. This post is a framework, not tax advice.
A few common questions
Does a lower city tax rate mean a lower city tax bill? Not always. Based on the 2026 rates and published exemptions, a homesteaded owner 65 or older pays less city tax on a $500,000 home in San Antonio than in Terrell Hills.
Has Terrell Hills added a homestead exemption for 2026? The latest detailed county exemption table, for tax year 2025, lists none. The 2026 worksheet shows no homesteads under a senior tax ceiling. A 2026 exemption table had not been published as of this writing.
How much did San Antonio's rate go up? From 54.159 cents to 56.288 cents per $100 of taxable value, adopted September 17, 2026. The city estimates about $2.95 more per month for the average homeowner with a homestead exemption.
Does the gap matter more for investors? Yes. Without a homestead exemption, the full rate difference applies to the full appraised value. On a $500,000 property that comes to about $924 a year at the city level alone.
If you're weighing a house on one side of this line against a house on the other, Ryan Hoskins can run the city-level math for your situation, compare the service schedules, and factor both into a calm, clear offer strategy. For sellers in Terrell Heights, the first step is an instant home valuation, so you know what your house is worth before you compare it with anything across Austin Highway.
