Property tax in Texas is levied entirely by local governments. There is no state property tax, but counties, cities, school districts, and special purpose districts rely on it so heavily that the average effective rate on owner-occupied homes runs about 1.36 percent of market value, well above the national median.1Tax Foundation. 2026 Texas Tax Rates and Rankings Because Texas collects no personal income tax, local budgets for schools, roads, and emergency services lean on this one source. What you actually pay depends on which taxing units overlap your address and which exemptions you qualify for.
Who Taxes You and How the Bill Gets Built
Every dollar of Texas property tax goes to a local entity; the state neither collects nor spends any of it.2Texas Comptroller of Public Accounts. Property Tax Assistance Most properties sit inside several overlapping jurisdictions, so the annual statement you receive is really a stack of separate charges rolled together.3Texas.gov. Property Tax Transparency in Texas
The county appraisal district identifies your property and sets its market value as of January 1 each year.4State of Texas. Texas Tax Code 23.01 – Appraisals Generally Market value means what the home would sell for between a willing buyer and seller. Your exemptions are subtracted from that figure to get a taxable value, and then each taxing unit multiplies the taxable value by its own rate (quoted per $100 of value) to calculate its share.
A quick example: a home appraised at $350,000 with a $140,000 school district homestead exemption has a taxable value of $210,000 for school purposes. At a school rate of $1.05 per $100, the school portion is $2,205. The county, city, and any special districts run the same math at their own rates and exemption levels, and the totals are combined into one bill. Two identical homes in different parts of the same county can owe meaningfully different amounts.
Special Districts Add a Layer
If your home sits inside a municipal utility district, emergency services district, or similar special purpose district, you pay an additional layer on top of county, city, and school taxes. MUDs are common in newer subdivisions on the edges of cities, where the developer created the district to finance water, sewer, and roads. The MUD rate tends to be highest in the early years while bonds are being repaid and usually drops as more homes share the debt.
The Homestead Exemption
The biggest break available to Texas homeowners is the residence homestead exemption. You qualify if you own the property and use it as your primary home. School districts must exempt $140,000 of appraised value from taxation.5State of Texas. Texas Tax Code 11.13 – Residence Homestead Counties, cities, and special districts may offer their own optional homestead exemptions, but only the school portion is mandatory.6Texas Comptroller of Public Accounts. Property Tax Exemptions
You apply once through your county appraisal district. Once approved, the exemption stays in place without annual renewal as long as the home remains your primary residence. Apply promptly, because you cannot collect the exemption for years before you filed.
The 10 Percent Cap on Appraised Value
Once you have an approved homestead exemption, the appraisal district cannot raise the home’s appraised value by more than 10 percent per year, plus the value of any new improvements.7State of Texas. Texas Tax Code 23.23 – Limitation on Appraised Value of Residence Homestead If market value jumps 30 percent in a year, taxable value still moves up by no more than 10. The cap applies automatically with the exemption, no separate form required. The capped value slowly catches up to market value over time, so the benefit is largest during periods of rapid appreciation.8Texas Comptroller of Public Accounts. Valuing Property
Age 65 and Older or Disabled Homeowners
Homeowners who are 65 or older or who have a qualifying disability receive an additional $60,000 school district exemption on top of the standard $140,000. They also lock in a school district tax ceiling: the dollar amount of school taxes owed the year the exemption takes effect becomes a permanent cap, and the school portion of the bill cannot exceed that amount for as long as the owner holds and lives in the home, regardless of future values or rates.5State of Texas. Texas Tax Code 11.13 – Residence Homestead Some cities and counties voluntarily offer a similar ceiling, but they are not required to.
Qualifying owners can also postpone paying homestead taxes entirely by filing a deferral affidavit with the appraisal district.9State of Texas. Texas Tax Code 33.06 – Deferred Collection of Taxes on Residence Homestead of Elderly or Disabled Person or Disabled Veteran Deferred taxes are not forgiven. They attach to the property as a lien and accrue interest at 5 percent per year, but no regular penalties apply and taxing units cannot foreclose while the deferral is active. The whole balance comes due when ownership changes, including after the owner’s death, so heirs should expect the accumulated figure to be substantial.
Disabled Veteran Exemptions
Veterans with a service-connected disability rating from the U.S. Department of Veterans Affairs receive a partial exemption that scales with the 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 appraised value
- 30 to 49 percent rating: up to $7,500
- 50 to 69 percent rating: up to $10,000
- 70 to 99 percent rating: up to $12,000
A veteran rated 100 percent disabled from a service-connected condition gets a complete exemption from property taxes on the homestead.11State of Texas. Texas Tax Code 11.131 – Residence Homestead of 100 Percent or Totally Disabled Veteran The surviving spouse of a veteran who held a 100 percent rating can keep the full exemption as long as they do not remarry and continue living in the home. Surviving spouses and minor children of veterans who died in the line of duty may also qualify.12Texas Veterans Commission. Property Tax Exemptions Available to Veterans Per Disability Rating
Agricultural and Open-Space Land
Land actively used for farming, ranching, or wildlife management can be appraised based on its productivity rather than its market value. The difference is often enormous. A parcel worth $500,000 on the open market might have an agricultural-use value of $15,000. Apply with the appraisal district before May 1 of the tax year.13Texas Comptroller of Public Accounts. Application for 1-d-1 (Open-Space) Agricultural Use Appraisal Late applications are accepted before the appraisal rolls are certified (usually around July), but late filing adds a penalty equal to 10 percent of the tax savings.
There is a serious catch. If you stop using the land for agriculture, the appraisal district recalculates taxes for the five preceding years as if it had been taxed at full market value. You owe the difference for each year plus 7 percent annual interest from the original due dates.14Texas Comptroller of Public Accounts. Appraisal of Agricultural and Open-Space Land The rollback bill can easily reach tens of thousands of dollars, so anyone buying ag land with development plans should budget for it from day one.
When Bills Arrive and What Late Costs
Tax offices begin mailing bills around October 1. Taxes become delinquent on February 1 of the following year, so the practical deadline is January 31.15State of Texas. Texas Tax Code 31.02 – Delinquency Date Most offices accept checks, electronic transfers, and cards (card payments usually carry a convenience fee of about 2 to 2.5 percent). Many homeowners pay through a mortgage escrow account, with the lender collecting monthly and remitting on the owner’s behalf.
Homeowners who are 65 or older, disabled, or qualifying disabled veterans can split homestead taxes into four equal installments without penalty. The first installment and a written request must be submitted before February 1, with the remaining payments spread roughly two months apart through August.16State of Texas. Texas Tax Code 31.031 – Installment Payments of Certain Residence Homestead Taxes Active-duty military members stationed outside Texas get extra time: they can pay delinquent taxes without penalty within 60 days of returning to the state or being discharged.15State of Texas. Texas Tax Code 31.02 – Delinquency Date
Missing January 31 gets expensive fast. On February 1, a 6 percent penalty hits the unpaid balance, plus 1 percent interest for that first month. Another 1 percent penalty and 1 percent interest get added each month through June.17State of Texas. Texas Tax Code 33.01 – Penalties and Interest On July 1 the penalty jumps to a flat 12 percent and interest keeps running at 1 percent per month. If the taxing unit uses a collection attorney, an additional penalty of up to 20 percent of the total tax can be added to cover collection costs.18State of Texas. Texas Tax Code 33.07 – Additional Penalty for Collection Costs A $5,000 January bill can exceed $6,600 by midsummer. There is no grace period or forgiveness program for standard delinquencies.
Protesting Your Appraisal
If you think the appraisal district has your value wrong, you can protest. Grounds include overvaluation, unequal appraisal compared to similar homes, wrongly denied exemptions, and factual errors in the appraisal records about your property.19State of Texas. Texas Tax Code 41.41 – Right of Protest
The deadline to file a notice of protest is May 15, or 30 days after the appraisal district mails your notice of appraised value, whichever is later. File with your county appraisal district. The form is straightforward and requires no legal language. You can also designate an agent to handle the process for you.20Texas Comptroller of Public Accounts. Appraisal Protests and Appeals
After filing, you’ll typically get an informal meeting with an appraiser first. Most protests settle here, so come prepared even though the setting is casual. If no agreement is reached, the case goes to the Appraisal Review Board, a panel of local citizens independent of the appraisal district. At the formal hearing, both sides present evidence. The strongest material for homeowners is usually recent comparable sales from near the January 1 valuation date, backed by photos of any conditions the district may not know about: foundation problems, dated interiors, needed repairs. The board issues a written order setting the final value. If you disagree, you can appeal to district court or pursue binding arbitration for homes appraised at $5 million or less, but you must go through the ARB process first.