"THE TAX RATE WILL INCREASE TAXES FOR DEBT SERVICES ON A $100,000 HOME BY APPROXIMATELY $148.14." The sentence is printed in capital letters in Ordinance 421, which the Sunrise Beach Village City Council adopted on September 17, 2026. Texas truth-in-taxation rules require cities to print that kind of disclosure. The city's own budget table puts the change in plain numbers. The FY2026-27 city rate is $0.26920 per $100 of taxable value, up from $0.11744 last year. On $100,000 of taxable value, the city line goes from $117.44 to $269.20.
Every council member present voted yes: Tammy Guest, Mike Byrd, Steve Primm, Michael Grabert and Joni Powers. We found no regional news coverage of the increase. Buyers comparing Lake LBJ towns this fall are still looking at last year's tax figures. Even with the new rate, many of those buyers will look at the wrong number.
The Seller's Tax Bill Is the Wrong Number to Plan Around
Sunrise Beach Village offers a tax ceiling on homesteads owned by people 65 or older or by disabled owners. Under Texas Tax Code Section 11.261, a city that adopts a ceiling "may not increase the total annual amount of ad valorem taxes" on a qualifying homestead above the amount it charged in the year the owner qualified. The cap applies to the city's whole tax, so the new debt-service portion is capped too.
The ceiling belongs to the owner, not the house. It expires on January 1 if none of the qualifying owners who held the property when the limit took effect still use it as a homestead, or if no current owner qualifies. When a home with a ceiling sells, the frozen bill does not carry over. The new owner's city tax is the appraised value times $0.26920 per $100, less any exemptions the new owner qualifies for.
This is where the surprise comes in. Suppose the seller has held a ceiling for years. That seller's 2026 city tax may barely reflect this year's increase. A buyer who uses that bill to estimate carrying costs is planning around a number set by a cap that lapses on the first January 1 after the qualifying seller stops living there as a homestead. A second home has no homestead exemption, so it never had a ceiling, and its owner pays the full new rate starting with the bill due October 1, 2026.
Where the $0.14814 Came From
Almost all of the increase is debt. The maintenance-and-operations portion of the rate is $0.12106, which the ordinance describes as an effective increase of 3.5 percent, or about $3.62 on a $100,000 home. The debt-service portion is $0.14814.
That debt is the City of Sunrise Beach Village's Combination Tax and Revenue Certificates of Obligation, Series 2026. Here is how the borrowing came together:
| Step | Date | Detail |
|---|---|---|
| Notice of intent, Resolution 284 | October 28, 2025 | Cap of $12 million; maximum interest rate of 4.75 percent; final maturity no later than August 15, 2046 |
| S&P rating | January 13, 2026 | AA+ on the $12 million issue |
| Ordinance 416 adopted | January 15, 2026 | 10 bids; 3.6 percent over 20 years; $17.86 million total repayment |
At the January meeting, Gary Kimble of Specialized Public Finance reported the bids and the rating. The minutes record that "many questions were asked by the public and answered" before Councilmember Byrd moved to approve, and the vote was unanimous. The certificates are paid mainly through property taxes. The notice pledged no more than $1,000 of surplus water revenue toward them. In practice, water customers are not paying this debt through their water bills. Taxable property is paying it through the tax roll.
The 20-year term matters for a buyer. The final maturity allowed by the notice is in 2046. For anyone buying in 2026, this debt line will appear on the city tax bill for the whole time most people own a lake house.
Who Actually Carries the Debt
This is the main point. The city's 2026 tax-rate worksheet shows $1,088,020 in debt to be paid with property taxes this year. The appraisal district certified $894,499,003 in taxable value inside the city. Before the rate is calculated, the worksheet subtracts $168,185,958 of value held in homesteads with tax ceilings, which leaves $734,428,327. The debt rate comes from dividing the $1,088,020 by that smaller base.
That means about 19 percent of the city's certified value sits under ceilings this year, and the other 81 percent sets the rate that pays the debt. The ceiling share also grew. Last year's worksheet listed $149,028,926 in ceiling value. This year it is $168.2 million.
Over 20 years of fixed debt payments, the way the base is set up decides who pays. Each time a home comes out from under a ceiling, its full value goes back into the base, often because it sold to someone who doesn't qualify for one. Each new ceiling takes value out. A buyer is stepping into that balance, not into the seller's bill.
Property tax is also most of what keeps the city running. In the adopted FY2026-27 budget, ad valorem taxes bring in $2,162,518.70 of $2,709,867.43 in total projected income. Sunrise Beach Village is a small city paying for a large water project with little besides the tax roll.
How It Compares With Nearby Cities
Before this vote, the Sunrise Beach Village city rate was well below its neighbors on Lake LBJ. Now it is about the same as Horseshoe Bay. Horseshoe Bay adopted $0.26775 per $100 for FY2026-27, the same rate as the past three years. Granite Shoals adopted $0.5339, down from $0.5424.
On a property with $750,000 of taxable value and no ceiling, the city line alone works out like this for FY2026-27:
| City | FY2026-27 city rate per $100 | City tax on $750,000 taxable value |
|---|---|---|
| Sunrise Beach Village, prior year | $0.11744 | $880.80 |
| Sunrise Beach Village | $0.26920 | $2,019.00 |
| Horseshoe Bay | $0.26775 | $2,008.13 |
| Granite Shoals | $0.5339 | $4,004.25 |
The city line is only one part of a Texas tax bill. The county, school district and other taxing units all add their own rates, and those vary by address. Buyers who once compared Sunrise Beach with Horseshoe Bay partly because of the low city tax should take that reason off the list. Granite Shoals still has the highest city rate of the three.
What the Money Is Paying For
The notice of intent lists the uses. They include two new 70,000-gallon clearwells at the water treatment plant, upgrades to the plant, a new 12-inch pipeline, a hydropneumatic tank and booster pump system, new distribution lines, and work on Village streets and drainage. The notice does not say how much goes to each item, so the debt cannot be called water-only.
The water work is the largest piece. DailyTrib reported in August that the first phase, called the Clearwell project, adds the two tanks and a filtration upgrade. City officials said the added storage is needed to meet Texas Commission on Environmental Quality requirements. Construction is expected to start in November and take 10 to 14 months. The second phase runs about 16,500 feet of 12-inch line from the treatment plant to the city's main storage tank on Mountain Top. It is expected to start in spring 2027 and take 14 to 18 months. "We currently believe that we can stay within our budget and timeframe for the project," Mayor Rick Bruns told DailyTrib.
At the January council meeting, Ken Atkins said the problem with the current system is storage, pressure and flow rate, and that pumping water from the lake would not fix those. According to DailyTrib, when both phases are done the city expects higher water pressure, an upgraded pumping station and better filtration. Based on those schedules, owners start paying in the 2026 tax year, but the work won't finish until roughly 2028. A buyer this fall pays for the upgrade before getting to use it.
Questions to Settle Before Writing an Offer
- Does the seller have a 65-and-older or disabled homestead ceiling? If so, set the seller's city tax bill aside and figure the city portion at $0.26920 per $100 of current appraised value.
- Will this be a homestead or a second home? A second home pays the full rate starting with the bill due October 1, 2026.
- What do the other taxing units on this parcel add? The city rate is one line, and the total depends on the address.
- How long do you plan to own it? The Series 2026 certificates can run as late as 2046.
Frequently Asked Questions
If I am 65 or older, do I get the seller's ceiling? No. You may be able to set up your own ceiling once you qualify the home as your homestead, but it starts from your own first qualifying year, not the seller's frozen amount.
I already have a ceiling in Sunrise Beach Village and want to move within the city. What happens? Section 11.261 includes a portability rule for moving to a different homestead in the same taxing unit. The new tax is based on the percentage of the full tax you paid under the old limit, and the chief appraiser provides a certificate for the calculation.
Does remodeling affect a ceiling? Yes, if the work adds value and isn't a repair or a government-required change. The city can raise the cap by the current rate times the added value in the first year that value shows up on the appraisal roll.
When is this year's bill due? Taxes under Ordinance 421 were due October 1, 2026. They become delinquent if not paid on or before January 31, 2027.
None of this is tax advice. For your own situation, confirm figures with the appraisal district and a tax professional.
If you are pricing a Sunrise Beach Village property this fall, either to buy or to list, Lake LBJ Partners can help you work out the real carrying cost: which ceiling applies, what a buyer will actually owe, and how the water debt changes your numbers. Sellers can start with a home valuation, or contact us to go through a specific address.
