Texas property taxes run well above the national average. The Tax Foundation ranks Texas seventh highest in the country, with an effective rate around 1.36%, while the national average sits closer to 0.87% to 1.1% depending on the data source.1Tax Foundation. Property Taxes by State and County, 2026 In plain terms, how Texas property taxes compare to the national average comes down to a 30% to 60% premium most years, and the main reason is that Texas has no state income tax, so local governments rely on property taxes to fund schools, roads, and public safety.
The Numbers Side by Side
Different studies land on slightly different figures because they measure different things. The Tax Foundation puts the Texas effective rate at 1.36%, seventh highest nationally.2Tax Foundation. 2026 Texas Tax Rates and Rankings The Lincoln Institute of Land Policy, working from median home data, calculates Texas at 1.7% against a 1.1% national average.3Lincoln Institute of Land Policy. Significant Features of the Property Tax – State-by-State Property Tax at a Glance The gap between those two figures reflects methodology: single-family homes versus all owner-occupied housing, median versus mean, and so on. None of the major studies disagree on direction. Texas is near the top of every national ranking.
Dollars tell the story more plainly. The median annual property tax bill in Texas is roughly $4,100, against about $3,200 nationally. On a $300,000 home, a Texas owner can expect somewhere between $4,000 and $5,100 a year. The same home in a state with average rates would generate a bill closer to $2,600 to $3,300. Spread across a thirty-year mortgage, that spread adds up to tens of thousands of dollars.
Why Texas Rates Are So High
The short answer is that Texas doesn’t tax your paycheck. The Texas Constitution prohibits a state personal income tax, and voters strengthened that prohibition in 2019 by adding an outright ban that would now require another constitutional amendment to reverse.4Ballotpedia. Texas Proposition 4, Prohibit State Income Tax on Individuals Amendment (2019) With income tax off the table, local governments fund themselves largely through property taxes and sales taxes. The state sales tax is 6.25%, and local jurisdictions can add up to 2% more, but sales tax alone doesn’t pay for a school district or a fire department.
Who comes out ahead in this trade depends on the household. A high earner in a modest home can do better in Texas than in California or New York, where income taxes bite hard. A retiree on a fixed income or a homeowner whose property value has surged can feel squeezed, because the tax follows the asset rather than the earnings. That’s where most of the frustration with Texas property taxes comes from. Your bill can climb even when your income doesn’t.
What You Actually Pay on a Texas Home
Texas has no state-level property tax. Every dollar you pay goes to local taxing units: school districts, counties, cities, and special districts.5Texas Comptroller of Public Accounts. Property Tax System Basics You get one combined bill, but behind it sit several independent rate decisions made by your school board, county commissioners, city council, and any special districts in your area.6Texas.gov. Property Tax Transparency in Texas
School districts usually drive the biggest piece of the bill. Counties and cities layer on their own rates for law enforcement, roads, and municipal services. Special purpose districts can add more. Municipal Utility Districts, common in newer suburban developments, commonly carry rates between $0.25 and $1.40 per $100 of assessed value, with the heaviest rates in neighborhoods where infrastructure bonds haven’t been paid down yet. Two homes of identical value a few miles apart can carry very different tax bills depending on which districts they fall inside.
Texas does cap how fast local rates can grow without voter approval. If a city or county with more than 30,000 residents adopts a rate that exceeds its voter-approval rate, the increase triggers an election.7Texas Comptroller of Public Accounts. Elections to Approve Tax Rate For school districts, property tax revenue growth is generally capped at 2.5%. These guardrails don’t stop rate increases, but they give residents a direct vote once proposed hikes cross the threshold.
Protections That Close Part of the Gap
The headline rates overstate what most Texas homeowners actually pay, because the state offers a stack of exemptions that other states don’t match. The biggest is the residence homestead exemption. For a primary home, school districts must now exempt $140,000 of appraised value from taxation, following voter approval of Proposition 13 in November 2025.8Ballotpedia. Texas Proposition 13, Increase Homestead Property Tax Exemption Amendment (2025) That’s up from $100,000 under the 2023 relief package and $40,000 before that. Counties must offer another $3,000, and cities and other taxing units may offer optional exemptions of up to 20% of appraised value.9State of Texas. Texas Tax Code 11.13 – Residence Homestead
There’s also a limit on how fast your taxable value can grow. Under Tax Code Section 23.23, a homestead’s appraised value can’t rise more than 10% per year regardless of what the market does.10State of Texas. Texas Tax Code 23.23 – Limitation on Appraised Value of Residence Homestead The cap kicks in the January after you first qualify for the homestead exemption and holds as long as you keep it. In metros where home values have doubled in a decade, this cap is one of the most valuable protections long-term owners have. It limits the valuation, though, not the rate, so your bill can still rise if local rates do.
Homeowners aged 65 or older, and those with qualifying disabilities, get an additional $60,000 school district exemption on top of the standard homestead amount, shielding $200,000 of value from school taxes alone. Once you turn 65, your school tax bill is also frozen at the dollar amount you paid that year. Even if your home’s value climbs or the rate rises, the school portion of your bill can’t go above that ceiling. Some cities and counties offer a parallel freeze on their own portions.
Veterans with a service-connected disability receive exemptions scaled to their VA rating, and veterans rated 100% disabled or individually unemployable owe nothing on their residence homestead.11Texas Comptroller of Public Accounts. Disabled Veteran and Surviving Spouse Exemptions Frequently Asked Questions Agricultural land can be appraised on its productive capacity rather than market value, cutting the tax bill on rural acreage dramatically.
The two most recent relief packages have meaningfully lowered what the typical homeowner pays. The 2023 Proposition 4 raised the school homestead exemption from $40,000 to $100,000 and compressed school district rates by about $0.107 per $100.12Ballotpedia. Texas Proposition 4, Property Tax Changes and State Education Funding Amendment (2023) The 2025 Proposition 13 pushed the school exemption to $140,000 with nearly 80% voter support. For a homeowner in a school district taxing at $0.90 per $100, the jump from $100,000 to $140,000 in exempt value is worth about $360 a year on the school portion alone.
How the Comparison Looks After Federal Taxes
Federal rules affect how the Texas premium actually hits your wallet. If you itemize, your Texas property taxes count as state and local taxes (SALT) eligible for the federal deduction. Under the 2025 federal tax law, the SALT cap rose to $40,000 for 2025 and $40,400 for 2026, up from the $10,000 limit in place since 2018. The cap phases down for filers earning above $505,000.
Because Texas has no state income tax, property and sales taxes are the only SALT deductions available to Texas filers. Residents of high-income-tax states often burn through the cap on income taxes alone before counting a single dollar of property tax. For most Texas homeowners, the $40,400 cap is now high enough to deduct the entire property tax bill, which wasn’t true under the old limit. That shifts the real comparison somewhat in favor of Texas, though not enough to erase the underlying rate gap.
Renters Pay It Too
Renters never see a property tax bill, but they absorb the cost. Landlords treat property taxes as an operating expense and build them into rent. When values and rates climb, rents follow. In commercial leases, the pass-through is often explicit as a separate line item; residential landlords rarely itemize it, but the economics are the same.
Because Texas property taxes run so far above the national average, this indirect cost pushes Texas rents higher than they would otherwise be, even in markets where land and construction costs are moderate. Renters don’t qualify for the homestead exemption or the 10% appraisal cap, so the full weight of assessed value increases flows through to them without any of the protections homeowners rely on.