Texas property taxes are high compared to other states. The effective rate sits around 1.36% in 2026 data, which puts Texas among the ten most expensive states in the country for property taxation and well above the roughly 1.1% national average.1Tax Foundation. 2026 Texas Tax Rates and Rankings The reason is structural: Texas has no state income tax, so local governments lean on property levies to pay for schools, roads, and public safety. The dollar bills, though, often come in lower than the rate suggests because Texas home values tend to run below those in the coastal states that dominate the “highest tax bill” lists.
Where Texas Ranks on Property Tax Rates
At 1.36%, Texas lands in the top tier of states by effective property tax rate.1Tax Foundation. 2026 Texas Tax Rates and Rankings Other analyses using different methodologies have pegged the rate closer to 1.7%, depending on how local levies and exemptions get factored in.2Lincoln Institute of Land Policy. Significant Features of the Property Tax – Texas Either way, Texas clusters near the top.
The gap with the cheapest states is wide. Hawaii’s effective rate is roughly 0.30%, and Alabama’s about 0.37%. A $300,000 home in Alabama generates roughly $1,100 a year in property tax. The same home in Texas produces a bill closer to $4,000 or more. New Hampshire and New Jersey rank alongside Texas near the top, though for different reasons: New Hampshire, like Texas, has no income tax, while New Jersey stacks heavy property taxes on top of a state income tax.3Tax Foundation. Property Taxes by State and County
Why Texas Charges So Much
The Texas Constitution flatly prohibits the legislature from imposing a tax on individual net income.4State of Texas. Texas Constitution Article 8 – Taxation and Revenue That ban began as a voter-approval requirement in 1993 and was strengthened to an outright prohibition in 2019. With no income tax flowing to Austin, cities, counties, and school districts need another revenue source, and the property tax is the one they reach for. State and local governments in Texas draw about 44% of their total revenue from property taxes, versus a national average near 32%.5Tax Foundation. Texas Legislature Approves Constitutional Amendment to Prohibit Individual Income Taxation
States with meaningful income taxes often carry lower property tax rates in exchange. California’s top marginal income tax rate reaches 13.3%, and New York’s top bracket kicks in above $1 million in income.6Tax Foundation. State Individual Income Tax Rates and Brackets A high-earning household in those states might save on property taxes but lose far more to the state return. In Texas, the paycheck stays whole and the property statement does the heavy lifting.
Sales Tax Belongs in the Comparison
Property isn’t the only place Texas makes up for the missing income tax. The combined state and local sales tax rate averages 8.20%, above the national population-weighted average of 7.53%.7Tax Foundation. State and Local Sales Tax Rates So Texans pay above-average rates on purchases as well as property. Whether the overall arrangement comes out ahead depends on income and spending habits; homeowners with expensive properties and modest incomes tend to feel the squeeze most.
The Rate Is High, but the Bill Isn’t Always
Rate and dollar bill tell different stories. The statewide median property tax payment in Texas falls in the neighborhood of $4,000 a year, with wide variation by metro. A rural homeowner might pay $1,500 while a Dallas or Austin suburb with a $400,000 home easily produces $6,000 or more. The effective rate is high, but Texas home values have historically run below the national median, which keeps dollar totals in the middle of the pack rather than at the top.
Contrast that with New Jersey, which currently posts the highest average property tax bill in the country at $10,340 in 2025.8New Jersey Department of the Treasury. 2025 Average Residential Statistics New Jersey combines high rates with high values and still collects a state income tax on top. On the other end, homeowners in West Virginia and Arkansas often see annual bills under $1,000, a product of low rates, low property values, or both.
Another wrinkle that makes cross-state comparison tricky is the assessment ratio. Texas assesses property at 100% of market value. Some states do not. Missouri taxes residential property at 19% of market value, so a $300,000 home there is taxed as if it were worth $57,000. When you see a state with a headline rate above 2% but moderate bills, a fractional assessment is usually the explanation. Rate alone can mislead; what matters is rate times assessed value.
What a Texas Homeowner Can Do About It
Rates are set locally and the state ban on income taxes isn’t going anywhere, but Texas does give homeowners several tools to pull their own bill down.
The Homestead Exemption
If you own and live in your home as a primary residence, the school district portion of your appraised value is reduced by $140,000.9State of Texas. Texas Code Tax Code 11.13 – Residence Homestead On a $350,000 home, school taxes apply to $210,000. Counties add a $3,000 exemption, and cities and special districts may layer optional homestead exemptions on top of the required ones.
Age 65+ and Disability Benefits
Homeowners who are 65 or older, or who have a qualifying disability, get an additional $60,000 school district exemption on top of the standard $140,000.9State of Texas. Texas Code Tax Code 11.13 – Residence Homestead The bigger benefit is the tax ceiling: once you qualify, your school district taxes are frozen at the amount you paid in the first qualifying year.10State of Texas. Texas Code Tax Code 11.26 – Limitation of School Tax on Homesteads of Elderly or Disabled Rates and values can climb around you; the school portion of your bill stays put. A longtime owner in a rapidly appreciating neighborhood often pays a fraction of what newer neighbors owe.
Qualifying homeowners can also defer property taxes entirely by filing an affidavit with the appraisal district. Taxes keep accruing with 6% annual interest, but no penalty applies and no foreclosure can proceed while the deferral is in place.11State of Texas. Texas Code TAX 33.01 – Penalties and Interest
Disabled Veteran Exemptions
Veterans with a service-connected disability rating from the VA get exemptions sized to the rating:
- 10% to 29% rating: up to $5,000 off taxable value
- 30% to 49% rating: up to $7,500
- 50% to 69% rating: up to $10,000
- 70% to 99% rating: up to $12,000
Veterans rated 100% disabled or individually unemployable pay no property tax on their homestead at all.12State of Texas. Texas Code Tax Code 11.131 – Residence Homestead of 100 Percent or Totally Disabled Veteran The full exemption extends to a surviving spouse who has not remarried and still lives in the home.13Texas Comptroller of Public Accounts. Disabled Veteran and Surviving Spouse Exemptions Frequently Asked Questions
The 10% Homestead Cap
Texas limits how fast your homestead’s appraised value can rise. The appraisal district cannot increase a homestead’s appraised value by more than 10% per year, plus the value of any new improvements.14State of Texas. Texas Code TAX 23.23 – Limitation on Appraised Value of Residence Homesteads In a market where values jump 20% or 30% in a year, that cap is real protection. The gap between capped and market value resets when the home sells, so a new buyer starts fresh at full market value.
Protesting Your Appraisal
This is where most Texas homeowners have the clearest shot at lowering a bill, and most don’t take it. Appraisal districts send notices of appraised value each spring, and the deadline to file a protest is generally May 15 or 30 days after the notice is delivered, whichever is later.15Texas Comptroller of Public Accounts. Property Tax Law Deadlines Miss it and you live with the number for the year.
Most districts try to resolve protests informally first. A staff appraiser reviews your evidence and may offer a lower value without a hearing. If that doesn’t work, the case goes to the Appraisal Review Board. The strongest evidence is comparable sales, meaning recent sale prices of similar homes nearby that suggest your value is too high. You can also argue unequal appraisal by showing your home is valued higher than comparable properties. Photos of condition problems, contractor repair estimates, and recent independent appraisals all help. If the ARB rules against you, you have 60 days to appeal to state district court, and for properties appraised at $1 million or less, binding arbitration is a faster and cheaper alternative.
How the Total Burden Actually Shakes Out
Property tax rate alone doesn’t tell you whether Texas is expensive to live in. A household earning $150,000 in California faces a top marginal state income tax rate of 9.3% (higher above certain thresholds), plus property taxes, plus a combined sales tax averaging 8.99%.7Tax Foundation. State and Local Sales Tax Rates The same household in Texas pays no state income tax, 8.20% combined sales tax, and a higher property tax rate.
For renters and owners of modest homes, Texas’s structure tends to work out well: no income tax, limited property tax exposure. For owners of expensive homes with moderate incomes, the math flips. A retiree on a $60,000 fixed income sitting on a $500,000 home faces a property tax that eats more cash flow than an income tax would. The senior exemptions, tax ceiling, and deferral option soften the hit, but don’t erase the gap. Where you fall on that spectrum matters more than any single state ranking.