Got PCS Orders? What to Do With Your House in Texas

Say Corey owns a house in Texas, and his PCS orders are stuck to the refrigerator with a magnet, next to a moving checklist that keeps getting longer. A permanent change of station means a new duty station, and the house can't come along. Corey keeps circling the same choice: selling a house on PCS orders, or renting it out and keeping it for later. Here is that choice, step by step, with the rules a homeowner in the same spot needs.

This guide is general information, not legal or tax advice; a tax professional, such as a MilTax consultant, or an attorney can apply it to your situation.

Sell or rent your house when you PCS: weigh cash flow and distance

Picture Corey walking through the house after dinner, looking at it the way a tenant would. The paint is fine. The water heater is old. The yard needs someone. Renting sounds simple until he counts who would handle each of those things from far away.

Start with the money. The rent has to cover the mortgage, property taxes, insurance, repairs and a property manager's fees if you hire one, with something left for the empty weeks between tenants. If the numbers only work when everything goes right, they don't really work.

Then think about distance. Renting makes you a Texas landlord wherever you are stationed. For example, under Property Code Sec. 92.052, when a tenant who is current on rent gives notice of a problem that materially affects an ordinary tenant's physical health or safety, the landlord must make a diligent effort to fix it. Our guide to selling your house for a job relocation lists the other duties, such as the deposit refund, in its section on renting the house out instead. From another state or overseas, that usually means paying a manager or leaning on a repair contact you trust, and our guide to hiring a property manager or selling your Texas rental covers which duties stay with you either way.

A few questions help sort it out:

• Do you expect to live in the house again after these orders?
• Could you cover the payment if the house sat empty or a tenant stopped paying?
• Who would let a plumber in, and who would check the work?

Selling a house on PCS orders: the tax rules

If Corey sells before he leaves, the big tax question is whether the gain can be excluded. IRS Publication 523 lets a seller exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly, when its eligibility test is met. At its core, you must have owned the home and lived in it as your main home for at least 24 months of the 5 years before the sale. Those months don't have to come in one block.

Short of 24 months? Pub 523 also allows a reduced exclusion when the main reason for the sale is a qualifying work move. Our quick-resale guide explains the work-move partial exclusion, and a tax professional can tell you whether your orders fit it.

Renting it out: the military pause on the 5-year clock

Now suppose Corey keeps the house and rents it. For most owners, that starts a clock. The 24 months of living there must fall inside the 5 years before the sale, so enough years of renting can push a later sale outside the exclusion. Our guide to selling a rental property that was your primary residence covers that standard window.

Service members get an option most owners don't. Pub 523 says a member of the uniformed services (and certain Foreign Service, intelligence community and Peace Corps personnel) may choose to suspend the 5-year test period while on qualified official extended duty. Put simply, years away on qualifying duty can be set aside, so the time you lived in the house before you left can still count.

The limits, all from Publication 523:

• Ten years at most. The suspension can't last more than 10 years. Together with the 5-year test, it can reach back no more than 15 years.
• One house at a time. You can't suspend the 5-year period for more than one property at a time.
• The choice comes at the sale. You make the election by filing your tax return for the year of the sale and excluding the gain. You can revoke the choice at any time.
• Moving back in first. If you move back in before selling, rental years would normally count as nonqualified use and shrink the exclusion. Pub 523 leaves out any period, up to 10 years, spent on qualified official extended duty.
• Depreciation still counts. If you were entitled to take depreciation for renting the house, you can't exclude the part of the gain equal to it, whether or not you claimed it.

Not every PCS qualifies. Orders for a set period of 90 days or less, or to a duty station less than 50 miles from the house without government quarters, would not meet the test. So for Corey, renting is not just a question of this year's rent. It also turns on whether he expects to come back and whether a later sale would still land inside the window.

Your Texas homestead exemption during military service

In Corey's stack of mail is an envelope from the appraisal district, and it raises the next question: what happens to the homestead exemption once he leaves?

Tax Code Sec. 11.13(l) says a home keeps its homestead character while the owner is temporarily away because of military service, inside or outside the United States, as a member of the armed forces of the United States or of Texas. The key condition: the owner must not establish a different principal residence. For most other absences, the same subsection requires less than two years away and an intent to return; our vacant house checklist covers that general rule.

Two cautions before you leave:

• Renting it out. The statute does not say whether leasing the house to a tenant during that absence keeps the homestead. Ask your appraisal district before you sign a lease.
• The duty to tell them. Under Tax Code Sec. 11.43(f), homestead application forms must state that you have a duty to notify the chief appraiser when your entitlement to the exemption ends. And if the chief appraiser finds an exemption was allowed in error in any of the five preceding years, Sec. 11.43(i) requires adding that value back to the appraisal roll.

VA loan entitlement when you sell or rent

If Corey's mortgage is a VA loan, there is one more thread to pull: the VA home loan benefit he may want for a house near some later station.

38 U.S.C. 3702(b) lists the cases in which VA may restore entitlement a veteran has used. The main ones for a seller:

• The property has been disposed of, and the loan has been repaid in full or VA has been released from liability on it.
• A veteran buyer assumes the loan and agrees to use the buyer's own entitlement in place of yours. Our guide to assumable mortgages in Texas explains that substitution and why entitlement can stay tied up on an assumption.

A sale that pays off the loan fits the first case. Renting the house and keeping the loan fits none of them yet, so ask VA or your lender how much entitlement you have left before you plan the next purchase.

Free help before you decide: MilTax and legal assistance

The call Corey hasn't made yet is the one to a tax pro. It doesn't have to cost anything. Pub 523 says members of the U.S. Armed Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military OneSource, which says you can connect with a tax consultant for free.

For legal questions, people eligible for military legal assistance can use the Armed Forces Legal Assistance locator to find the nearest legal assistance office; its listings cover certain bases in the continental U.S.

Whether you are selling a house on PCS orders or renting it out, bring the same short list to each call:

• Your orders, so the pro can check the 90-day and 50-mile tests.
• The closing statement from when you bought the house, and records of any improvements.
• The dates you lived there, and a simple sheet of expected rent against costs if you might rent.

With those answers in hand, Corey can decide: sell before leaving, or rent the house out and keep it. Either can be the right choice. What matters is that he makes it with his own numbers instead of guesses.

If selling fits your plans

Cash Home Advisors buys houses in Dallas–Fort Worth, Houston, San Antonio and Austin. You sell as-is, no repairs, there are no agent commissions, and we pay all closing costs.

A cash offer is usually less than the house could bring on the open market after repairs, so listing can net more if you have the time and money for it. Asking is free, no obligation, and a real person calls you back. Request a cash offer, or read how our process works first.

Frequently asked questions

Sources

1. IRS Publication 523 (2025), Selling Your Home
2. Texas Tax Code, Chapter 11 (Secs. 11.13(l), 11.43(f) and 11.43(i))
3. Texas Property Code, Chapter 92 (Sec. 92.052)
4. 38 U.S.C. 3702, Basic entitlement (restoration of VA entitlement)
5. Military OneSource, MilTax free tax services
6. Armed Forces Legal Assistance, Legal Services Locator

General information, not legal or tax advice. Talk to a Texas attorney or CPA about your situation.