Property tax in Texas works through a split system: your county appraisal district decides what your property is worth, and each local taxing unit — your school district, county, city, and any special districts — sets its own rate against that value. Your bill is the appraised value minus any exemptions you qualify for, multiplied by the combined rate of every taxing unit covering your address. Because Texas has no personal income tax, these local property taxes carry most of the weight for funding schools, roads, hospitals, and emergency services, and effective rates average around 1.4 percent of a home’s market value statewide.
Who Values Your Property and Who Taxes It
Every county in Texas has a central appraisal district responsible for valuing all taxable property within its borders.1State of Texas. Texas Code Tax Code 6.01 – Appraisal Districts Established The district does not collect any tax. Its job is to produce a value, which then gets shared with every taxing unit that covers your address.
Most Texas homeowners pay taxes to at least three or four separate entities: a school district, a county, usually a city, and one or more special-purpose districts for things like water, hospitals, or community colleges. Each entity sets its own rate and bills its own slice. That is why a neighbor in an unincorporated area a few miles away can owe a noticeably different amount on an identically appraised home.
How Your Home’s Value Is Set
The appraisal district estimates what your property would sell for in an open-market sale between a willing buyer and a willing seller.2State of Texas. Texas Code Tax Code 23.01 – Appraisals Generally That value is pinned to January 1 of the tax year. The district looks at the physical condition and use of the property on that date, not what happens later in the year.3Texas Comptroller of Public Accounts. Property Tax Law Deadlines A pool you add in March will not show up until the following year’s appraisal.
State law requires each property to be reappraised at least once every three years.4State of Texas. Texas Code Tax Code 25.18 – Periodic Reappraisals In practice, most urban appraisal districts revalue every year because fast-moving housing markets open up wide gaps between appraised and actual sale prices.
Appraisers use three standard methods. The sales comparison approach looks at what similar nearby properties recently sold for and is the usual choice for residential homes. The income approach estimates value from the rental income a property can generate and is used mainly for commercial and investment properties. The cost approach calculates what it would cost to rebuild the structure from scratch, minus depreciation, and is useful for newer or unique buildings where comparable sales are scarce. The district may use one method or blend all three. You will see the result on the notice of appraised value that arrives in April or May.
How Your Tax Bill Is Calculated
The formula is simple. Take the appraised value, subtract any exemptions, and multiply what remains by the combined tax rate. Rates in Texas are expressed per $100 of taxable value, so you divide by 100 at the end.
Say your home is appraised at $350,000 and you have the $140,000 school district homestead exemption. The school district taxes you on $210,000. If the school rate is $1.05 per $100, your school tax is $2,205. You repeat that calculation for the county, city, and any special districts, each using its own rate and its own exemption amounts, then add the results for your total bill.
When the number goes up, it is worth checking whether the increase came from a higher value, a higher rate, or both. The appraisal district controls the value. The taxing units control the rate. Your response depends on which piece moved.
How Local Tax Rates Get Set
Once the appraisal district certifies values, each taxing unit calculates the rate it needs to fund its budget. State transparency rules require every unit to compute two benchmarks: the no-new-revenue rate and the voter-approval rate.5Texas Comptroller of Public Accounts. Tax Rate Calculation
The no-new-revenue rate is the rate that would bring in the same total revenue as last year from properties that were also on the roll last year. It is a baseline, not a ceiling. The voter-approval rate is the maximum a taxing unit can adopt without giving residents the right to petition for a rollback election. For most cities and counties, that ceiling is 3.5 percent above the no-new-revenue maintenance and operations rate.6State of Texas. Texas Code Tax 26.04 – Voter-Approval Tax Rate School districts operate under a tighter formula.
Under Senate Bill 2, the Texas Property Tax Reform and Transparency Act of 2019, each taxing unit must maintain a public website posting proposed rates and budget details, and appraisal districts must maintain searchable property tax databases.7Texas Legislature Online. Bill Summary Senate Bill 2 If you want to see how your city or school district arrived at its number, the data should be online before the rate is adopted.
Exemptions That Lower Your Taxable Value
Exemptions directly reduce the portion of your home’s value that gets taxed. They are not automatic. You have to apply through your county appraisal district, typically with a copy of your Texas driver’s license or state ID showing the same address as the property.
General Residence Homestead Exemption
Any homeowner using a property as a primary residence can claim the general homestead exemption. School districts must exempt $140,000 of appraised value. Counties must also provide a $3,000 exemption for county-purpose taxes. Cities and special districts may adopt their own optional homestead exemptions of up to 20 percent of appraised value, with a floor of $5,000.8State of Texas. Texas Code 11.13 – Residence Homestead Check with your appraisal district to see what your city and other local entities offer.
Over-65 and Disability Exemptions
If you are 65 or older, or if you have a qualifying disability, you get an additional $10,000 off your home’s taxable value for school district purposes on top of the general homestead exemption.8State of Texas. Texas Code 11.13 – Residence Homestead Many cities and counties layer on their own additional exemptions for these groups.
The over-65 exemption also triggers a school tax ceiling. The year you turn 65, the dollar amount you owe in school district taxes gets frozen. You will never pay more than that amount in school taxes as long as you own and live in the home, even if the property value or the tax rate rises later.9Texas Comptroller of Public Accounts. Property Tax Exemptions If you move to a different homestead, the ceiling transfers proportionally.
Disabled Veteran Exemptions
Veterans with a service-connected disability rating from the U.S. Department of Veterans Affairs qualify for exemptions scaled to their rating:10Texas Comptroller of Public Accounts. Disabled Veteran and Surviving Spouse Exemptions Frequently Asked Questions
- 10 to 29 percent rating: up to $5,000 off the property’s value
- 30 to 49 percent: up to $7,500
- 50 to 69 percent: up to $10,000
- 70 to 99 percent: up to $12,000
- 100 percent, or individual unemployability: total exemption of the residence homestead’s appraised value11State of Texas. Texas Code 11.131 – Residence Homestead of 100 Percent Disabled Veteran
The 100 percent exemption also extends to an unremarried surviving spouse who was living in the home at the time of the veteran’s death.12Texas Comptroller of Public Accounts. 100 Percent Disabled Veteran and Surviving Spouse Frequently Asked Questions
The 10 Percent Homestead Cap
If you have a homestead exemption on your primary residence, Texas limits how much your appraised value can jump from year to year. Starting in the second year after your exemption takes effect, the appraised value cannot increase by more than 10 percent of the previous year’s appraised value, plus the market value of any new improvements you have made.13Collin Central Appraisal District. What is a Homestead Cap? The cap does not change the district’s opinion of your home’s market value. It only limits how much of that value can be taxed in a single year.
The cap matters most in neighborhoods where prices are rising fast. If your home’s market value jumps 25 percent but the cap is in place, only 10 percent of last year’s appraised value, plus any new construction, gets added to your taxable figure. Over time, a sizeable gap can build between market value and capped value. That gap disappears when the home sells and the new owner starts fresh without a cap until their own homestead exemption kicks in, which is one reason property taxes often spike after a purchase.
Protesting Your Appraised Value
Protesting is the single most effective tool a homeowner has for keeping a bill in check, and Texas makes the process accessible enough that you can handle it yourself. After you receive your notice of appraised value, you have until May 15 or 30 days from the date the notice was mailed, whichever is later, to file a written protest with your appraisal review board.14State of Texas. Texas Code Tax 41.44 – Notice of Protest Missing the deadline forfeits your right to challenge that year’s value. Treat it as a hard stop.
After you file, the appraisal district will usually offer an informal conference with a staff appraiser before your formal hearing.15Texas Comptroller of Public Accounts. Appraisal Protests and Appeals Most protests get resolved here. Bring comparable sales data showing that similar homes in your area sold for less than your appraised value, photos documenting any condition issues the district may not know about, and any repair estimates. The appraiser has authority to adjust your value on the spot if your evidence is convincing.
If the informal meeting does not produce an agreement, the protest moves to the Appraisal Review Board, an independent panel that hears testimony and reviews evidence from both sides. Hearings typically run 15 to 20 minutes and take place between June and August. You can attend in person, participate by phone or video, or submit a written affidavit. If someone else will represent you, you need to file an appointment-of-agent form beforehand. You will receive a written decision by mail a few weeks after the hearing. If the result still feels wrong, you can appeal through binding arbitration or file a challenge in district court.
When Bills Arrive and When They Are Late
The property tax year follows a predictable rhythm. January 1 is the valuation date. Notices of appraised value go out in April or May. Taxing units adopt their rates over the summer. Tax bills are mailed around October, and payment is due on receipt.3Texas Comptroller of Public Accounts. Property Tax Law Deadlines
The hard deadline: taxes become delinquent if not paid before February 1 of the following year.16State of Texas. Texas Code Tax 31.02 – Delinquency Date Most homeowners with a mortgage never handle this directly because their lender collects a monthly escrow payment and remits the taxes on their behalf. If you pay your own taxes, set a reminder well before January ends.
Penalties climb fast. On February 1, a delinquent tax picks up a 6 percent penalty plus 1 percent interest. Each additional month through June adds another 1 percent penalty and 1 percent interest. If the bill is still unpaid on July 1, the penalty jumps to a flat 12 percent, with cumulative interest of 6 percent by that point.17State of Texas. Texas Code Tax 33.01 – Penalties and Interest Interest continues to accrue at 1 percent per month after that. July 1 is also when many taxing units add an additional collection penalty of up to 20 percent to cover attorney fees, if the unit has contracted with a collections attorney.18State of Texas. Texas Code Tax 33.07 – Additional Penalty A $5,000 bill ignored until midsummer can balloon to roughly $6,900 once base tax, penalty, interest, and collection fees are stacked together, and the taxing unit can eventually sue and foreclose to recover what is owed.
Payment Plans and Deferrals for Qualifying Homeowners
If you are 65 or older, disabled, or a disabled veteran with a homestead exemption, you can split your tax bill into four equal installments without incurring penalties or interest. The first payment and a written notice must be submitted before the delinquency date, with the remaining three payments due roughly every two months after that.19State of Texas. Texas Code Tax 31.031 – Installment Payment of Certain Homestead Taxes Miss one of the installment deadlines and only the missed portion picks up a 6 percent penalty and the standard monthly interest.
The same group of homeowners can also defer collection of property taxes entirely by filing an affidavit with the chief appraiser.20State of Texas. Texas Code Tax Code 33.06 – Deferred Collection of Taxes on Residence Homestead of Elderly or Disabled Person or Disabled Veteran A deferral halts any lawsuits or foreclosure proceedings as long as you own and live in the home. Taxes keep accruing, and deferred amounts carry 5 percent annual interest. Once you sell the home, move out, or pass away, the deferred taxes plus interest come due within 181 days. A mortgage lender is not required to honor the deferral. If the lender objects, it can pay the taxes itself and increase your monthly payment or take action under the mortgage. Talk to your lender before filing a deferral if you have an outstanding loan on the home.