Texas Has No Income Tax, So the Exchange Is About Federal Tax
The Texas Constitution bars a tax on the net incomes of individuals, a provision voters adopted in 2019. On November 4, 2025, voters added Section 24-b, which bars a tax on an individual's realized or unrealized capital gains, including a tax on the sale or transfer of a capital asset. Texas also has no state transfer tax on a deed: since 2015 the constitution has barred any new tax on a transaction that conveys fee simple title to real property.
That leaves federal tax as the bill a San Antonio exchange defers. Federal capital gains tax and depreciation recapture still apply in full to a taxable sale.
Sources: Texas Constitution Art. VIII, Sec. 24-a (H.J.R. 38, 2019); Texas Constitution Art. VIII, Sec. 24-b (S.J.R. 18, 2025); Texas Constitution Art. VIII, Sec. 29 (S.J.R. 1, 2015); Texas Legislative Council: constitutional amendments adopted
Recording in Bexar County, and Holding Property in an Entity
The Bexar County Clerk's Recordings Division records deeds and other real property documents. It requires originals and charges $25 for the first page and $4 for each additional page.
If you hold property through an entity that is subject to the Texas franchise tax, check that tax too. For report years 2026 and 2027, the no-tax-due threshold is $2.65 million in revenue and the rate is 0.75 percent, or 0.375 percent for retail and wholesale. Keep the same entity on both sides of the exchange: the taxpayer that sells must be the taxpayer that buys.
Sources: Bexar County Clerk: real property records; Texas Comptroller: franchise tax
Working With a Qualified Intermediary From Outside Texas
A qualified intermediary does not need to be in Texas. 1031 Federal Exchange, led by attorney Steve Wolterman, handles exchanges for San Antonio investors by document and wire: we sign the exchange agreement before your sale, hold the proceeds, receive your written identification by Day 45, and fund the replacement closing by Day 180.
San Antonio, TX 1031 Exchange Questions
Is there a Texas transfer tax when I sell San Antonio property?
No state transfer tax applies. Since 2015 the Texas Constitution has barred any new tax on a transaction that conveys fee simple title to real property. You will pay recording fees to the Bexar County Clerk, which charges $25 for the first page and $4 for each additional page.
If Texas has no income tax, why do a 1031 exchange in San Antonio?
Federal tax still applies. A taxable sale triggers federal capital gains tax and depreciation recapture, and an exchange defers both so the full proceeds can go into your next property.
State tax facts on this page were checked against official San Antonio, TX sources in November 2026. Tax rules change, and this page is general information, not tax advice for your situation. Confirm the details with your tax advisor before you sell.
Ready to plan a 1031 exchange on your San Antonio investment property? Contact 1031 Federal Exchange today.