Texas Property Tax Rate: How Much Are Property Taxes in Texas?

Texas has no state income tax. That's the headline everyone hears when they're considering a move. The follow-up question — the one that actually matters for your monthly housing budget — is what that costs you in property taxes. The answer is: quite a lot, and possibly more than you expect.

Understanding the Texas property tax system before you buy is not optional. Your property tax bill is built into your monthly mortgage payment as an escrow payment, and in some suburban communities, the combined rate is high enough to add $500 to $700 per month to what you'd pay for the same home in a lower-tax state.

How Texas Property Taxes Are Calculated

Texas property taxes are assessed and collected entirely at the local level. The state itself collects no property tax. Your annual bill is the sum of rates levied by every taxing entity with jurisdiction over your property — typically including:

• School district (the largest portion, often 55–65% of total)
• County
• City or municipality
• Any special districts (Municipal Utility Districts, Public Improvement Districts, hospital districts, college districts, etc.)

The county appraisal district (CAD) determines your property's "appraised value" — what the CAD believes is its market value as of January 1 of the tax year. Each taxing entity then applies its rate to your assessed value (your appraised value minus any applicable exemptions).

The effective property tax rate across Texas typically runs from 1.6% to 2.5% of assessed value. In newer master-planned suburban communities with Municipal Utility Districts, total effective rates can exceed 3.0% to 3.5%.

Property Tax Rates by Major Texas City

These are typical total effective rates. Your specific address may vary depending on the exact taxing entities — always check the county appraisal district for property-specific rates.

Houston / Harris County: Rates in established inner neighborhoods typically run 2.0% to 2.2%. In newer Cypress, Katy, and Sugar Land MUD communities, 2.5% to 3.5% total is common.

Dallas / Collin County: North Dallas and Plano see rates around 2.0% to 2.3%. Outer suburbs in Collin, Denton, and Kaufman counties with active MUD infrastructure can run 2.5% to 3.2%.

Austin / Travis County: Central Austin sees lower rates around 1.8% to 2.1%. Suburbs in Hays County (Kyle, Buda) and Williamson County (Georgetown, Leander) range from 2.1% to 2.8%.

San Antonio / Bexar County: Generally 2.0% to 2.3%, making it one of the lower major-metro rates in the state.

El Paso / El Paso County: Despite having some of the most affordable home prices in Texas, El Paso carries some of the highest effective rates — 2.1% to 2.45%. This significantly impacts monthly payments.

Calculating Your Actual Monthly Tax Payment

To estimate your monthly property tax escrow:

1. Find the total property tax rate for the specific address (not a neighborhood average)
2. Multiply by the appraised value (or purchase price as a proxy)
3. Divide by 12

Example: A $350,000 home at a 2.2% effective rate pays $7,700 per year in property taxes, or $642 per month in escrow.

With a 2026 homestead exemption of $140,000 reducing the school district taxable value, that same home's school district taxes drop significantly. If the school district rate is 1.0%, the school district portion goes from $3,500 to $2,100 — saving $1,400 per year.

Always look up the actual property-specific tax rate before making an offer. Use your county CAD's property search tool to find the specific tax history for the address. The rates shown on Zillow or Redfin are frequently based on the prior owner's capped assessed value, not what you'll actually pay after the CAD resets to full market value at transfer.

How to Search Your County Appraisal District

Every county in Texas has its own CAD. To find tax information on a specific property:

• Harris County (Houston): HCAD.org
• Dallas County: DCAD.org
• Tarrant County: TAD.org
• Travis County (Austin): TravisCAD.org
• Bexar County (San Antonio): BCAD.org
• Collin County: CollinCAD.org

Search by address to find the current appraised value, the breakdown of each taxing entity's rate, the current tax bill, and any exemptions the prior owner held. Remember: the seller's homestead exemption ends at the sale. You'll be assessed at full market value until you file your own exemption.

Texas Property Tax vs. California

This comparison comes up constantly because so many Californians are moving to Texas. The reality is nuanced.

California's advantage: Proposition 13 caps property tax assessment increases at 2% per year from the date of purchase. A California homeowner who bought 20 years ago is paying taxes on a fraction of current market value. Their rate — capped at 1.25% of assessed value for most localities — is much lower than the face rate suggests.

Texas's rate is higher — significantly. A $500,000 home in Austin at 2.0% costs $10,000 per year in property taxes. The same home in a California suburb at the same price, with Prop 13 caps, might cost $6,250 (at 1.25% of purchase price), rising only 2% per year regardless of market appreciation.

Texas's trade-off: No state income tax (California's top rate reaches 13.3%), no real estate transfer tax (California charges up to 0.55% plus city transfer taxes at closing), and a lower overall cost of living in most categories.

For a single-earner W-2 employee making $120,000 in a moderate-tax Texas suburb, the math often favors Texas — the income tax savings offset much of the property tax premium. For a high earner at $400,000+, the California income tax becomes so significant that Texas property taxes are easily absorbed. For a retired homeowner on fixed income in a paid-off home with Prop 13 protections, California's locked-in assessment can be genuinely cheaper over time.

The Texas Constitution does protect your assessed value against dramatic spikes once the homestead exemption is active — the 10% annual cap functions similarly to Prop 13 in limiting year-over-year increases, just at a higher starting rate.

Protesting Your Property Tax Assessment

Every Texas homeowner has the right to protest their appraisal with the county appraisal district. This right is underutilized. If the CAD's appraised value exceeds what you believe is the property's actual market value, you can challenge it.

The protest deadline is typically May 15 of the tax year, or 30 days after you receive your Notice of Appraised Value — whichever is later. Watch your mail in April.

The protest process:

1. File a Notice of Protest with your CAD (usually possible online)
2. Gather evidence: recent comparable sales in your neighborhood at lower prices, any inspection reports showing material defects, the purchase price if you bought recently at a price below the CAD's appraisal
3. Request an informal conference with an appraiser first — many protests are resolved at this stage without going to a formal hearing before the Appraisal Review Board
4. If the informal conference doesn't produce a satisfactory reduction, escalate to the ARB hearing

For new buyers, if the CAD appraises above your purchase price in the first year, your closing statement with the actual purchase price is compelling evidence. The CAD is supposed to set value at market, and a recent arm's-length transaction is the best evidence of market value.

Professional property tax protest services typically take 30% to 50% of the first-year savings as their fee, on a contingency basis. For contested high-value properties, it can be worth it. For most entry-level to mid-range homes, the informal protest process is manageable without professional help.

Understanding the full cost of Texas homeownership — taxes, MUD districts, HOA fees, and insurance — is central to buying within your actual budget. The Texas First-Time Home Buyer Guide includes a comprehensive closing cost worksheet and a property tax calculation tool to model your true monthly payment before you make an offer.

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