Texas property taxes are so high because the state has no personal income tax, which forces schools, counties, cities, and special districts to fund themselves almost entirely through taxes on real estate. More than 4,796 local taxing units can draw from the same parcel, and each one sets its own rate on an appraised value that has climbed sharply in most of the state.1Texas Comptroller. Property Tax System Basics The result is one of the heaviest property tax burdens in the country. Homestead exemptions, the 10 percent appraisal cap, and a free protest process are the main tools you have to push back.
No State Income Tax Shifts the Burden to Property
The Texas Constitution prohibits a state tax on individual income. Article 8, Section 24-a makes this explicit, and voters reinforced it in 2019 with a constitutional amendment requiring a statewide referendum before any income tax could be enacted.2State of Texas. The Texas Constitution Article 8 – Taxation and Revenue Most states fund public services on three legs: income, sales, and property taxes. Texas uses two. Property owners absorb the difference. Among the nine states with no personal income tax, Texas sits near the top for effective property tax rates.
Multiple Taxing Entities Stack on the Same Property
Your bill isn’t a single tax. It’s a stack. More than 4,796 local taxing units operate across the state, and several of them can tax the same property at the same time.1Texas Comptroller. Property Tax System Basics Counties and school districts tax every nonexempt property within their boundaries. Add your city, and then add any special districts: hospital, junior college, water, utility.
Each unit independently decides how much revenue it needs and sets a rate to raise it. There is no state property tax, and the Comptroller’s office has no role in setting rates or collecting them.3Texas Comptroller. Property Tax Assistance Everything happens locally. A homeowner in a typical suburb might see separate levies from a school district, a county, a city, a community college district, and a municipal utility district, all calculated on the same appraised value. That stacking is why the total feels so large even when no single rate looks extreme.
Schools Take the Biggest Share
For most Texas homeowners, the school district line is the single largest item on the bill. School districts receive the majority of total property tax collections in the state, and their rates tend to be the highest among the entities on any given property. Texas public schools educate millions of students, and property taxes are their primary local funding source.
Rising Appraisals Push Bills Higher Even When Rates Hold
Texas property taxes are calculated on your property’s appraised market value, which the county appraisal district determines as of January 1 each year.4Texas Comptroller of Public Accounts. Property Tax Calendars and Deadlines If the appraisal climbs, your bill climbs even when the rate doesn’t move. Values have risen sharply for years in much of the state, driven by in-migration, job growth, and a housing market that has outpaced the national average in many metros. Each spring you’ll get a notice of appraised value from the county appraisal district. That notice is the starting point for anything you want to challenge.
The 10 Percent Homestead Appraisal Cap
Texas puts one meaningful brake on how fast the taxable value of your home can grow. Under Tax Code Section 23.23, the appraised value of a residence homestead cannot increase by more than 10 percent per year, plus the value of any new improvements.5State of Texas. Texas Tax Code 23.23 – Limitation on Appraised Value of Residence Homestead The cap starts on January 1 of the tax year after you first qualify for a homestead exemption, and it continues as long as you or your surviving spouse keep qualifying.
The cap applies to the taxable appraised value, not the appraisal district’s estimate of market value. If your home’s market value jumps 25 percent in a year, the taxable value can still only rise 10 percent. The protection ends when the home sells. A new owner’s appraised value resets to market, which is why buyers in hot neighborhoods often see a much larger tax bill in their first full year than the seller was paying.
Exemptions That Lower Your Taxable Value
Exemptions are the main relief tool the state hands homeowners. Most require an application through your county appraisal district.
General Homestead Exemption
Every homeowner who uses the property as a primary residence qualifies for a $140,000 homestead exemption from school district taxes.6State of Texas. Texas Tax Code Section 11.13 – Residence Homestead A home appraised at $350,000 is taxed by the school district on $210,000. Cities and counties may add their own optional homestead exemptions, and amounts vary by jurisdiction.
Over-65 and Disabled Homeowner Exemptions
Homeowners who are 65 or older, or who are disabled, get an additional $60,000 exemption from school district taxes on top of the $140,000 general exemption.6State of Texas. Texas Tax Code Section 11.13 – Residence Homestead That’s $200,000 shielded from school taxes combined. Counties, cities, and special districts must also offer at least a $3,000 exemption for over-65 and disabled homeowners, and many offer more.
The more valuable piece is often the tax ceiling. Once you qualify for the over-65 or disabled exemption, your school district taxes are frozen at the amount you owed in the year you first qualified.7Texas Comptroller. Property Tax Exemptions Appraisals can keep rising. The school portion of your bill stays locked unless you make improvements beyond ordinary maintenance. Cities and counties can adopt optional ceilings too. For a homeowner on a fixed income, the ceiling often matters more than the exemption dollars themselves over time.
How to Protest Your Appraisal
Filing a protest is free, no lawyer is required, and it is usually the most effective way to lower a specific bill. The deadline to file a written protest with your county’s Appraisal Review Board is May 15 or 30 days after the appraisal district mailed your notice of appraised value, whichever is later.8State of Texas. Texas Tax Code 41.44 – Notice of Protest You can protest on several grounds: the appraised value is too high, your property was unequally appraised compared to similar properties, or the appraisal records contain errors. File Form 50-132 with your appraisal district, or submit a written notice identifying the property and your objection.9Texas Comptroller. Appraisal Protests and Appeals
Most appraisal districts offer an informal meeting first where you present your case to a staff appraiser. Many protests end here. If you can’t reach an agreement, you move to a formal hearing before the Appraisal Review Board. The ARB must send notice of the hearing at least 15 days in advance.9Texas Comptroller. Appraisal Protests and Appeals
The strongest evidence is recent sales of comparable homes in your area that sold for less than your appraised value. Photos documenting damage, deferred maintenance, or features that hurt value help too. For income-producing property, bring income and expense statements. For an unequal appraisal argument, show that similar homes nearby are appraised for less. Preparation separates successful protests from wasted afternoons.
Some owners hire property tax consultants who work on contingency, typically charging 25 to 40 percent of the first year’s savings and nothing if they don’t reduce the bill. That math works for high-value properties where the dollars justify the cut. On a median-priced home, filing yourself often nets you more.
Voter-Approval Caps Limit Revenue, Not Your Bill
Texas law caps how much property tax revenue local governments can collect without voter approval. Under Senate Bill 2, effective in 2020, cities and counties cannot increase property tax revenue by more than 3.5 percent over the prior year without triggering an automatic election.10Texas Legislature Online. Enrolled Bill Summary – SB 2 The previous threshold was 8 percent. Special taxing units like hospital and junior college districts still operate under an 8 percent cap.11State of Texas. Texas Tax Code Chapter 26 – Assessment School districts follow a formula tied to state education funding rather than a flat percentage.
Worth knowing before you count on this: the cap limits total revenue growth for the taxing unit, not your individual bill. If your property’s value grew faster than the district average, your personal bill can rise by well more than 3.5 percent even in a year the taxing unit stayed under its cap. The real lever on your own bill is still the exemption you claim and the appraisal you protest.