Buying a home in Texas comes with plenty of perks—big skies, growing cities, no state income tax—but it also comes with a price that catches many buyers off guard: property taxes.
Texas has some of the highest property tax rates in the country, and understanding how they’re calculated (and what they pay for) is key to planning your budget and protecting your investment.
In this post, we’ll break down how property taxes in Texas work, what influences your bill, how to estimate your payments, and what exemptions might lower your cost. Whether you’re a first-time buyer or new to the state, we’ll walk you through it in plain English.
Why Texas Property Taxes Are Higher Than Most States
Let’s start with the elephant in the room—Texas doesn’t have a state income tax. That’s a huge plus for many residents, especially those relocating from states like California or New York.
But that money’s gotta come from somewhere.
To fund public schools, local services, roads, hospitals, emergency services, and more, Texas leans heavily on property taxes collected at the local level. Instead of one flat statewide rate, multiple taxing entities—school districts, cities, counties, community colleges—combine to determine your total rate.
So, while you may be saving on income taxes, property taxes in Texas can feel steep, especially in fast-growing counties.
How Property Taxes Are Calculated in Texas
Property taxes in Texas are based on a simple formula:
Appraised Value x Tax Rate = Property Tax Owed
Let’s break that down.
1. Appraised Value
Each year, your local county appraisal district (CAD) assigns a market value to your property based on recent sales, local market trends, and the condition of your home.
This value may not match what you paid for the home—it reflects what the CAD believes your home would sell for as of January 1 of that tax year.
You’ll receive this appraised value in the spring, typically around April or May.
2. Tax Rate
The property tax rate is set by local taxing authorities and can vary widely depending on your location. It’s typically expressed as a percentage or per $100 of value.
For example, a rate of 2.5% means you’d pay $2,500 per year on a $100,000 home. It’s not uncommon in some Texas cities for tax rates to fall between 2% and 3.5%.
To get the full picture, you need to add up all the taxing entities in your area—your school district, city, county, utility district, and any special assessments.
Example: Estimating Property Taxes in Texas
Let’s say you’re looking at buying a home appraised at $350,000 in a city with a combined tax rate of 2.6%.
$350,000 x 0.026 = $9,100 in annual property taxes
That’s $758.33/month, just for taxes.
So if you’re planning a mortgage, don’t forget to factor in these taxes when calculating your monthly payment. Your lender will often collect them through an escrow account along with your mortgage and homeowners insurance.
Want help estimating tax impacts while shopping for homes? Connect with a local buyer’s agent who knows the market and can give you accurate cost projections.
When Property Taxes Are Due in Texas
Here’s what the timeline typically looks like:
- January 1 – Tax year begins; appraised value is set as of this date
- April–May – Appraisal notices are mailed out by your county
- May 15 – Deadline to protest your appraised value if you disagree
- October – Tax bills are sent out
- January 31 (of following year) – Property taxes must be paid in full
If you don’t pay by the deadline, interest and penalties start to rack up quickly.
Can You Protest Your Property Tax Value?
Yes—and many Texans do, especially in hot markets where appraised values rise fast.
If you believe your home’s assessed value is too high (which leads to a higher tax bill), you can file a formal protest with your county’s Appraisal Review Board (ARB). You’ll need evidence—comps, photos, or repair estimates—to support your case.
Some homeowners choose to file on their own, while others hire firms that specialize in tax protests (often on a contingency fee basis).
Tip: Even if you don’t plan to sell, it’s smart to review your appraisal each year. The process can feel a little tedious, but saving hundreds—or thousands—makes it worth the effort.
Homestead Exemptions in Texas
One of the biggest ways to lower your property taxes in Texas is to apply for a homestead exemption.
If you live in the home as your primary residence, you’re likely eligible. Here’s what it can do:
- Removes part of your home’s value from taxation (e.g., $40,000 off the value for school taxes)
- Caps how much your appraised value can increase (limited to 10% per year)
- Often includes additional savings at the city, county, and special district levels
The homestead exemption does not apply to investment or rental properties—only your main home.
Other exemptions may be available for:
- Seniors (age 65+)
- Veterans or disabled homeowners
- Surviving spouses
- People with disabilities
You only need to apply once, as long as you don’t move or change the name on your deed. You can apply online through your county appraisal district’s website, typically by April 30 of the year you’re requesting the exemption.
Property Taxes When Buying a Home in Texas
When you buy a home, you may wonder: who pays the property taxes for the year?
Here’s how it usually works:
- At closing, the seller pays taxes for the portion of the year they owned the home
- The buyer pays the rest, usually through escrow
For example, if you buy a home on July 1, the seller will pay half the year’s property taxes, and you’ll cover the second half.
But there’s a twist: the exact amount of taxes isn’t known until later in the year (usually October), so title companies use the previous year’s tax rate as a basis for estimating.
If there’s a difference when the actual bill comes out, your lender will adjust your escrow account—or you may receive a bill or refund depending on how the math shakes out.
Need help reviewing what taxes you’ll owe at closing? A good buyer’s agent will break it all down for you.
Are Property Taxes Higher in Some Texas Counties?
Absolutely. Texas is a big state, and rates vary depending on where you’re buying.
Here’s a quick comparison:
| County | Estimated Tax Rate |
| Travis (Austin) | 2.1% – 2.5% |
| Bexar (San Antonio) | 2.3% – 2.8% |
| Harris (Houston) | 2.5% – 2.9% |
| Collin (North DFW) | 2.1% – 2.6% |
| El Paso | 2.1% – 2.5% |
Rural counties may have lower rates, but they also tend to have fewer services. Urban areas often have higher rates due to school bonds and infrastructure costs.
When comparing homes, don’t just look at the price—check the tax rate too. Two similar homes in different counties could have very different monthly payments once taxes are included.
Final Thoughts: Property Taxes Are Manageable—If You’re Prepared
It’s true: property taxes in Texas are higher than in many other states. But that doesn’t mean they have to catch you off guard.
If you take time to understand how they’re calculated, take advantage of exemptions, and factor them into your buying budget, they’re just another piece of the homeownership puzzle.
And remember—property taxes support your local schools, roads, and community services, so they’re part of what makes your neighborhood a great place to live.
If you’re starting your home search in Texas and want to be sure your budget includes everything—mortgage, insurance, taxes, and beyond—work with a local expert who knows the numbers and can guide you through it with confidence.