Texas has no state income tax — your Social Security check, IRA withdrawals, and pension payments all arrive untouched by the state. In exchange, Texas funds local government through property taxes that rank among the highest in the US, typically 1.5%–2.5% of assessed value. The best Texas retirement cities are the ones where strong senior exemptions, lower home prices, or exceptional amenities make the overall math work in your favor.
Quick Comparison: Best Texas Retirement Cities 2026
| City | Median Home Price | Effective Property Tax Rate | State Income Tax | Best For |
|---|---|---|---|---|
| San Antonio | ~$275,000 | ~1.9% | None | Overall balance, military retirees |
| Georgetown | ~$350,000 | ~2.0% | None | 55+ communities, near Austin |
| New Braunfels | ~$340,000 | ~1.9% | None | Hill Country, outdoor access |
| Kerrville | ~$290,000 | ~1.5% | None | Small town, senior services |
| Fredericksburg | ~$420,000 | ~1.3% | None | Wine country, premium lifestyle |
| McKinney | ~$430,000 | ~1.8% | None | DFW suburbs, urban amenities |
| Round Rock | ~$365,000 | ~2.1% | None | Austin adjacency, healthcare |
| Corpus Christi | ~$210,000 | ~1.8% | None | Maximum affordability, Gulf Coast |
Effective property tax rates before 65+ homestead exemptions. Exemptions typically reduce taxable value by $40,000–$100,000 depending on county and freeze school district taxes.
Top Texas Cities to Retire in 2026
San Antonio — Best Overall
San Antonio is the strongest all-around retirement city in Texas. With a metro population of 2.6 million, it offers full big-city healthcare — UT Health San Antonio, Methodist Health System, and Baptist Health System — plus the largest military medical complex in the US at Joint Base San Antonio (Brooke Army Medical Center, TRICARE access, commissary). Yet median homes run ~$275,000, far below Austin or Dallas. The River Walk, extensive parks, and warm cultural identity give retirees a strong quality of life.
- State income tax: None
- Property tax (before 65+ exemption): ~1.9% — on a $275,000 home, ~$5,225/year; the 65+ school district freeze typically saves $1,500–$2,500/year
- Average summer high: 95°F (July) — hot but manageable
- Best for: Military retirees, budget-conscious urban retirees, anyone who wants major city services without Austin prices
65+ exemption note: In Bexar County, the over-65 homestead exemption plus school district freeze typically reduces a $275,000 home’s annual property tax bill to $3,000–$4,000/year — a significant improvement over the sticker rate.
Georgetown — Best 55+ Community Options
Georgetown is 30 miles north of Austin and home to Sun City Texas, one of Del Webb’s largest 55+ communities with over 14,000 homes, 12 golf courses, 50+ clubs, and extensive fitness and recreation facilities. Georgetown’s Victorian courthouse square gives it genuine small-town character despite being one of the fastest-growing cities in the US. The main downside: construction is constant and traffic has increased significantly.
- Median home price: ~$350,000 (Sun City homes range from ~$280,000 to $600,000+)
- State income tax: None
- Property tax: ~2.0% before exemptions
- Best for: Retirees who want the 55+ community lifestyle with access to Austin’s cultural amenities within 45 minutes
New Braunfels — Best Hill Country City
New Braunfels sits on the I-35 corridor between San Antonio and Austin on the Guadalupe and Comal rivers. It’s one of the fastest-growing cities in the US by percentage but retains genuine character — a strong German heritage downtown, world-class river tubing on the Comal (the shortest navigable river in the US), and Hill Country scenery in every direction. Cost of living remains meaningfully below Austin.
- Median home price: ~$340,000
- State income tax: None
- Property tax: ~1.9%
- Best for: Active retirees who want outdoor recreation — river tubing, Hill Country hiking, Guadalupe River kayaking — in a growing city with urban amenities
Kerrville — Best Small Town in the Hill Country
Kerrville is 60 miles northwest of San Antonio on the Guadalupe River, a town of ~25,000 with an outsized retirement community. It has a respected arts presence (Kerrville Folk Festival, multiple galleries), strong senior services, and Peterson Health — a well-regarded regional medical center. The effective property tax rate (~1.5%) is lower than most Texas cities, and the Hill Country setting is genuinely beautiful.
- Median home price: ~$290,000
- State income tax: None
- Property tax: ~1.5% (Kerr County — lower than most Texas counties)
- Best for: Retirees seeking a quiet Hill Country small town with strong senior infrastructure and lower property taxes than major metros
Fredericksburg — Best Premium Hill Country Lifestyle
Fredericksburg is Texas Wine Country — 50+ wineries in the surrounding Hill Country, a German-heritage Main Street lined with boutiques and restaurants, and a tourism infrastructure that delivers exceptional dining and cultural options year-round. The trade-off is price: the tourism premium pushes median homes to ~$420,000, and weekend crowds can overwhelm the small downtown. Many retirees choose homes 10–15 miles outside town for quiet and lower prices while staying close to the amenities.
- Median home price: ~$420,000 (in-town); lower in surrounding Gillespie County
- State income tax: None
- Property tax: ~1.3% (Gillespie County — among the lowest in Texas)
- Best for: Higher-income retirees who want a premium scenic lifestyle with wine, food, and arts
McKinney — Best Dallas-Fort Worth Suburb
McKinney consistently ranks among the best places to live in Texas for overall quality of life. It’s a DFW suburb with a genuinely charming historic downtown, strong local healthcare through Baylor Scott & White Medical Center McKinney, and access to UT Southwestern and Medical City Dallas for complex care. For retirees whose family is in the DFW area, McKinney offers the strongest combination of livability and medical access in the metro.
- Median home price: ~$430,000
- State income tax: None
- Property tax: ~1.8%
- Best for: Retirees staying near family in the Dallas area who want a walkable, high-quality suburban environment
Corpus Christi — Most Affordable Gulf Coast Option
Corpus Christi sits on a bay off the Gulf of Mexico and is significantly more affordable than any comparable coastal Florida city. The median home price (~$210,000) makes it one of the cheapest coastal retirement destinations in the US. Naval Air Station Corpus Christi creates a large TRICARE-eligible retiree population and associated military retail infrastructure. Healthcare is adequate at Christus Spohn Health System, though not at the caliber of San Antonio or Houston.
- Median home price: ~$210,000
- State income tax: None
- Property tax: ~1.8%
- Best for: Budget-focused coastal retirees, military retirees seeking Gulf access at minimum cost
Tax Example: What $65,000 Retirement Income Costs in Texas
A retired couple drawing $65,000/year (Social Security + IRA withdrawals) in San Antonio vs. a state with income tax:
| Expense | Texas (San Antonio) | North Carolina (comparable city) |
|---|---|---|
| State income tax | $0 | ~$1,700 (4.5% on non-SS income) |
| Property tax (median home, before 65+ exemption) | ~$5,225 | ~$2,000 |
| 65+ school district freeze (approximate annual savings) | −$2,000 | N/A |
| State + local sales tax burden | ~$1,800 | ~$1,100 |
| Net estimated state/local tax | ~$5,025 | ~$4,800 |
The headline “no income tax” advantage in Texas is real, but property taxes close the gap substantially — especially before the 65+ exemption kicks in. With the school district freeze applied, Texas often comes out ahead of income-tax states on total state/local burden. The key variable is your home value: higher-value homes mean the property tax load grows while the income tax savings stay flat.
Key Considerations for Texas Retirees in 2026
Apply for 65+ exemptions immediately: The Texas over-65 homestead exemption and school district tax freeze must be applied for. File with your county appraisal district as soon as you turn 65 or establish Texas residency. Missing even one year means you can’t reclaim that frozen value.
Summer heat: Dallas averages 40+ days above 100°F. San Antonio and Austin average 15–25 days above 100°F. Hill Country cities (Kerrville, Fredericksburg, Boerne) sit at higher elevation and typically run 5–8°F cooler. If extreme heat is a concern, plan ahead.
Medicare Advantage availability: Texas has strong plan availability in major metros. Rural areas have fewer options — verify Medicare Advantage plan availability in your specific county at Medicare.gov before choosing a remote location.
Flood risk: Parts of central Texas (New Braunfels, Kerrville) sit in flash-flood-prone river corridors. Check FEMA flood maps and flood history for any property near a creek or river.
Related reading: Best States to Retire in 2026 | Best Cities to Retire in the US | State Taxes on Retirement Income | Best Cities in Florida | Best Cities in North Carolina | Best Cities in Arizona | Best Places to Retire hub
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