Texas Property Tax Guide 2026: Rates, Exemptions & Appeals
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How Texas Property Tax Works
Texas has no state income tax, and property taxes are the primary mechanism for funding local government services including public schools, cities, counties, and special districts. The Texas property tax system is administered at the county level by Central Appraisal Districts (CADs), which are responsible for determining the market value of every property in the county each year. Tax rates are then set by each taxing unit (school district, city, county, etc.) based on their budgetary needs.
Your property tax bill is calculated by multiplying your assessed value (minus any exemptions) by the combined tax rate of all overlapping taxing jurisdictions. For example, a home in Austin might be taxed by Travis County, the City of Austin, Austin ISD, Austin Community College, and the Travis County Healthcare District. Each entity sets its own rate, and together they form your total tax rate. The effective combined rates across Texas typically range from 1.5% to 2.8% of assessed value.
Property values are reassessed annually on January 1, and notices of appraised value are mailed in April or May. This annual reassessment means your tax bill can increase substantially from year to year, especially in rapidly appreciating markets like Austin, Dallas, and Houston. Understanding the system is the first step to managing your tax burden effectively.
County Tax Rate Comparison
Key Insight: Texas property taxes average 1.8% of assessed value annually. However, homestead exemptions can reduce your tax burden by Texas has no state income tax, and property taxes are the primary mechanism for funding local government services including public schools, cities, counties, and special districts. The Texas property tax system is administered at the county level by Central Appraisal Districts (CADs), which are responsible for determining the market value of every property in the county each year. Tax rates are then set by each taxing unit (school district, city, county, etc.) based on their budgetary needs. Your property tax bill is calculated by multiplying your assessed value (minus any exemptions) by the combined tax rate of all overlapping taxing jurisdictions. For example, a home in Austin might be taxed by Travis County, the City of Austin, Austin ISD, Austin Community College, and the Travis County Healthcare District. Each entity sets its own rate, and together they form your total tax rate. The effective combined rates across Texas typically range from 1.5% to 2.8% of assessed value. Property values are reassessed annually on January 1, and notices of appraised value are mailed in April or May. This annual reassessment means your tax bill can increase substantially from year to year, especially in rapidly appreciating markets like Austin, Dallas, and Houston. Understanding the system is the first step to managing your tax burden effectively. Property tax rates vary significantly across Texas counties and cities. In the Austin metro, Travis County has an effective rate of approximately 1.8%, while Williamson County (Round Rock, Cedar Park, Georgetown) runs slightly higher at around 2.0%. Hays County (San Marcos, Kyle, Buda) is similar to Williamson. The differences are driven primarily by school district tax rates, which make up the largest share of your property tax bill, typically 40-55%. In the Dallas-Fort Worth metroplex, Collin County (Frisco, Plano, McKinney) has effective rates around 2.0-2.2%, while Tarrant County (Fort Worth, Arlington) is slightly higher at 2.1-2.4%. Dallas County itself averages around 2.0%. Denton County, home to fast-growing suburbs, ranges from 1.9-2.3% depending on the city and school district. For specific properties, always check the actual rates with the county appraisal district. Houston-area counties present a wide range. Harris County averages about 2.0-2.3%, Fort Bend County (Sugar Land, Katy area) runs 2.2-2.6% due to high MUD (Municipal Utility District) taxes in newer developments, and Montgomery County (The Woodlands) is around 2.0-2.3%. In San Antonio, Bexar County averages 2.1-2.4%. When comparing cost of living across cities, property taxes are a major differentiator that affects your total housing cost beyond just the mortgage payment. The homestead exemption is the single most important tax benefit for Texas homeowners. As of 2024, Texas provides a mandatory $100,000 homestead exemption from school district property taxes for your primary residence. This means $100,000 is subtracted from your home's appraised value before school district taxes are calculated. On a home appraised at $400,000, you would only pay school taxes on $300,000. At a typical school tax rate of $1.00 per $100 of value, this saves approximately $1,000 per year. To qualify, the property must be your primary residence as of January 1 of the tax year. You must file a homestead exemption application with your county appraisal district. In most counties, you can file online, and the exemption remains in effect until you sell the home or move. New homeowners should file immediately after closing, as the exemption is not automatic. Some counties also offer additional local optional homestead exemptions that can reduce your taxable value by an additional 1-20%. The homestead exemption also provides a crucial tax-growth cap: once in place, your appraised value for tax purposes cannot increase by more than 10% per year, regardless of actual market appreciation. In hot markets where values have surged 20-30% in a single year, this cap saves homeowners thousands. However, the cap only applies to your homestead property and resets when the property is sold, so new buyers inherit the full current market value. Texas provides additional generous exemptions for homeowners age 65 and over and those with qualifying disabilities. The over-65 exemption includes an additional $10,000 school district exemption on top of the standard $100,000 homestead exemption, plus a mandatory school district tax ceiling that freezes your school taxes at the amount you paid the year you turned 65. Your school taxes can never increase above that ceiling as long as you own and live in the home, even if your home's value increases. Many cities and counties also offer optional over-65 exemptions and tax ceilings. In Austin, for example, seniors receive an additional city exemption and a city tax freeze. The combination of state and local over-65 benefits can reduce a senior's property tax bill by 40-60% compared to what a non-exempt homeowner would pay on the same property. These benefits transfer to a surviving spouse who is 55 or older. Disabled homeowners receive similar benefits to the over-65 exemption, including the additional $10,000 school district exemption and the school tax ceiling. Disabled veterans may qualify for even larger exemptions, up to 100% of the property's value for veterans with a 100% disability rating. The Texas Comptroller's office maintains a complete guide to all exemption categories. If you are over 65, disabled, or a veteran, consult your county appraisal district to ensure you are receiving every exemption you qualify for. Every Texas property owner has the right to protest their appraised value annually, and exercising this right is one of the most effective ways to lower your tax bill. You must file a notice of protest with your county Appraisal Review Board (ARB) by May 15 (or 30 days after your notice of appraised value is mailed, whichever is later). The protest process is free and does not require an attorney, though professional property tax consultants are available and typically work on a contingency basis. To build a strong protest case, gather comparable sales data showing that similar homes in your area have sold for less than your appraised value. Also collect evidence of any condition issues that might reduce your home's value: needed repairs, foundation problems, flood zone location, proximity to commercial properties or busy roads, or any other factor the appraisal district may not have accounted for. Online tools and your county's appraisal district website can provide recent comparable sales. Most protests are resolved through an informal hearing with an appraiser before going to the formal ARB panel. Come prepared with printed evidence, be respectful and factual, and focus on comparable sales rather than emotional arguments about what you think your home should be worth. In Texas's major metros, property owners who protest win reductions approximately 60-70% of the time. Even modest reductions of 5-10% in appraised value can save hundreds of dollars annually on your tax bill. If you are unsatisfied with the ARB decision, you can appeal to district court or binding arbitration. Texas property taxes are due on January 31 of the year following the tax year. Taxes for the 2026 tax year, for example, are due January 31, 2027. Tax bills are typically mailed in October or November. Payments made after January 31 accrue penalty and interest at 6% in February, increasing by 1% per month through June, and then jumping to 12% plus an additional 20% collection penalty in July. Delinquent property taxes in Texas are no joke, so timely payment is essential. Most homeowners pay their property taxes through their mortgage escrow account. Your lender collects a monthly escrow amount as part of your mortgage payment and pays the tax bill on your behalf. If you pay your taxes directly, you can make partial payments throughout the year in most counties. Some counties offer a quarterly payment plan if you apply before a specific deadline. Over-65 and disabled homeowners can defer their property taxes entirely, with interest accruing at 5% per year, and no penalty or foreclosure action while they live in the home. For homeowners purchasing mid-year, property taxes are typically prorated at closing. The seller pays their share through the closing date, and the buyer assumes responsibility for the remainder. This proration is usually based on the prior year's tax bill if the current year's bill has not yet been issued. Your title company will handle the proration calculation as part of the closing statement. Property taxes should be a central consideration in your home buying decision, not an afterthought. A $500,000 home in a district with a 2.5% effective tax rate costs $12,500 per year in property taxes, or $1,042 per month. That same home in an area with a 1.8% rate costs $9,000 per year, a monthly savings of $292. Over a 10-year period, the difference exceeds $35,000. When comparing homes across different jurisdictions, always compare total monthly costs including taxes, not just the purchase price. New construction in master-planned communities often carries higher effective tax rates due to MUD (Municipal Utility District) taxes. MUDs are special districts created to finance infrastructure (water, sewer, drainage, roads) in new developments. MUD tax rates can add 0.5-1.5% on top of regular property taxes, significantly increasing your total bill. The trade-off is usually a lower purchase price compared to established neighborhoods with full city services. Ask your agent about MUD taxes on any new construction you are considering. Also consider how the 10% homestead cap affects long-term costs. If you buy in a rapidly appreciating area, your taxable value is capped at 10% growth per year even if market values rise faster. This creates increasing savings over time. However, when you eventually sell and the new buyer inherits the full market value, their taxes will be substantially higher than yours were, which can affect resale appeal. Check our Home Buying Guide for a detailed cost comparison worksheet. File your homestead exemption immediately after purchasing your primary residence. This is the single most impactful action you can take, and many homeowners leave money on the table by not filing or filing late. Verify that all applicable exemptions (homestead, over-65, disabled veteran, agricultural) are properly recorded with your county appraisal district. Check your property's record on the CAD website annually to confirm accuracy. Protest your appraised value every year, even in years when you think the valuation is fair. The protest process is free, and you cannot be penalized with a higher value for protesting. Many homeowners hire property tax consultants who charge only if they achieve a reduction, typically 25-40% of the first-year savings. Given the high success rate of protests, this is often a worthwhile investment, especially for higher-value properties. Consider the tax implications before making major improvements to your home. Additions, pool installations, and major renovations are reported to the appraisal district and will increase your assessed value. This does not mean you should avoid improvements, but factor the additional tax cost into your renovation budget. Finally, if you are buying a home, ask your agent to research the property's tax history, exemption status, and any pending reappraisals. Our Investment Guide includes a detailed tax analysis framework for evaluating properties.Texas Property Tax Guide 2026: Rates, Exemptions & Appeals
Table of Contents
Interactive Tools to Help Your Search
How Texas Property Tax Works
County Tax Rate Comparison
00,000+ in assessed value for primary residences. Understanding protest procedures and exemption eligibility is essential for Texas homeowners.
Homestead Exemption: The $100,000 Benefit
Over-65 and Disabled Person Exemptions
How to Protest Your Property Tax Appraisal
Payment Options and Deadlines
Impact on Home Buying Decisions
Tips to Reduce Your Property Tax Burden
Sheila Smith Oliver is the founder and principal broker of Dwellverse, with over two decades of experience in Texas residential real estate. She has personally facilitated 500+ successful transactions across Austin, Dallas, Houston, and San Antonio, totaling over $250 million in sales volume. Sheila specializes in luxury properties, relocation services, and investment strategy.
Frequently Asked Questions
The average effective property tax rate in Texas is approximately 1.6-1.8% of a home's market value, though rates vary significantly by county and city. Some areas, particularly newer developments with MUD taxes, can have effective rates exceeding 2.5%. The statewide average makes Texas property taxes among the highest in the nation, offsetting the absence of a state income tax.
File a homestead exemption application with your county's Central Appraisal District (CAD). Most counties allow online filing. You need to provide proof that the property is your primary residence, such as a driver's license with the property address. File as soon as you close on your home. The exemption provides a $100,000 reduction in taxable value for school district taxes and a 10% annual cap on appraised value increases.
Yes, every property owner in Texas has the right to protest their appraised value annually. File a notice of protest with your county Appraisal Review Board by May 15 or within 30 days of receiving your appraisal notice. The process is free. Approximately 60-70% of protests in major Texas metros result in some reduction. You can protest yourself or hire a property tax consultant who works on contingency.
Yes, Texas provides significant property tax benefits at age 65, including an additional $10,000 school district exemption and a school district tax ceiling that freezes your school taxes permanently. Many cities and counties offer additional over-65 exemptions and freezes. Combined, these benefits can reduce a senior's property tax bill by 40-60%. You must apply with your county appraisal district to receive these benefits.
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Last updated: 2026-01-27