Texas will not eliminate property taxes in the foreseeable future, and full elimination is not on any current bill. What is happening is aggressive, incremental relief aimed at the school portion of the tax: between 2023 and 2025, the legislature committed tens of billions of dollars to compressing school tax rates and raising homestead exemptions, and more cuts are likely in future sessions. Getting all the way to zero is a different problem, and a much bigger one.
What the Legislature Has Actually Cut
The 88th Legislature’s 2023 package was the largest property tax cut in state history. Senate Bill 2 put roughly $12.7 billion toward compressing school district tax rates by an additional 10.7 cents per $100 of assessed value, targeting the Maintenance and Operations (M&O) portion of the school tax.1Texas Legislature Online. Bill Analysis for SB 2 – 88th Legislature 2nd Called Session Voters then approved HJR 2 in November 2023, raising the school district homestead exemption from $40,000 to $100,000.2Texas Legislature Online. HJR 2 – 88th Legislature 2nd Called Session
The 89th Legislature stacked more on top in 2025. SB 4 and SJR 2 pushed the school homestead exemption from $100,000 to $140,000. SB 23 and SJR 85 raised the additional exemption for homeowners over 65 and those with disabilities from $10,000 to $60,000, bringing their combined exemption to $200,000. HB 9 raised the business personal property exemption to $125,000. Each of those exemption changes needed voter approval at a November 2025 constitutional amendment election.3The Texas State Senate. Press Release – Senator Paul Bettencourt
The legislature’s own projections put the average annual savings at about $484 for roughly 5.7 million homeowners, with seniors and disabled homeowners saving about $908 on average. School districts are made whole: the state sends general revenue to cover whatever compression and exemptions pull off the local tax roll.3The Texas State Senate. Press Release – Senator Paul Bettencourt
Why “Path to Zero” Only Means School M&O
The strategy driving all this is called tax compression. The state picks up a bigger share of school funding, and in exchange the maximum M&O rate districts can charge drops. If future legislatures keep buying that rate down a few pennies at a time, the school M&O rate eventually hits zero.
That is not the same as eliminating your property tax bill. Compression does not touch the Interest and Sinking (I&S) rate, which school districts levy to pay off voter-approved bonds for construction. A taxing unit can set its I&S rate at whatever level the year’s debt service requires, and that obligation cannot be compressed away while the bonds exist.4Texas Legislature Online. Bill Analysis SB 1814 – 88th Legislature A homeowner in a district that recently passed a bond package will still see a real I&S charge no matter how far the M&O rate falls.
More importantly, your tax bill is not just the school district. Cities, counties, hospital districts, water districts, community colleges, and other special-purpose entities each set their own property tax rates, and the current relief strategy does not touch any of them. Even if school M&O rates hit zero tomorrow, you would still owe property taxes to every other local entity on your bill.
The Revenue Hole Nobody Has Filled
Texas collected roughly $125 billion in local property taxes in 2024. The school portion is the biggest single slice, which is why the legislature went after it first, but cities and counties together collect tens of billions more for police, fire, roads, parks, and water infrastructure.
To replace all of that through the sales tax alone, without expanding the base to currently exempt services, one analysis puts the combined rate needed at roughly 16.24 percent. The current combined sales tax rate in Texas tops out at 8.25 percent, so full replacement through sales tax would mean nearly doubling what you pay at the register. Broadening the base to tax services like legal fees, medical care, and haircuts would soften the rate hike but not eliminate it.
That math is why no serious bill proposes an overnight swap. The current approach uses general revenue surpluses, mostly from existing sales taxes and oil-and-gas severance taxes, to buy down school rates incrementally. It works during boom years. A recession that drains the surplus would force the legislature to choose between restoring rates, cutting school funding, or breaking the state’s balanced-budget requirement.
The Constitutional Obstacle
Property taxation is not just allowed by the Texas Constitution; it is required by it. Article VIII mandates that “all real property and tangible personal property in this State … shall be taxed in proportion to its value.”5State of Texas. Texas Constitution Article 8 – Taxation and Revenue Abolishing the property tax means amending that language, not just passing a bill.
A constitutional amendment needs a two-thirds vote of all members in both the House and Senate, then a majority of voters at a statewide election.6Texas Legislative Council. Analyses of Proposed Constitutional Amendments In practice, that is at least 100 House votes and 21 Senate votes. The legislature has cleared that bar repeatedly for relief measures like HJR 2 and SJR 2, but a full abolition amendment would be far harder because it would force lawmakers to answer the replacement-revenue question on the same ballot.
A Federal Tax Angle Worth Knowing
If property taxes went away and sales taxes went up to replace them, your federal tax bill could rise. Property taxes you pay are deductible on your federal return if you itemize, subject to the state and local tax (SALT) deduction cap. For 2026 that cap is $40,400, with a phasedown starting at $505,000 in modified adjusted gross income. Sales taxes are generally not deductible the same way.
For a homeowner in the 24 percent federal bracket paying $6,000 in property taxes, that deduction is worth about $1,440. Swap the $6,000 property tax bill for $6,000 in higher sales tax costs and that federal benefit disappears. Elimination would still be a win for most homeowners on paper, but the net savings are smaller than the gross savings, and the gap is biggest for higher-income households who itemize.
What You’ll See on Your Bill Right Now
If you pay your county directly, cuts show up on your next annual tax statement. If your mortgage servicer pays through an escrow account, you won’t see monthly payment relief until the next annual escrow analysis runs.7Consumer Financial Protection Bureau. Regulation 1024.17 – Escrow Accounts
Watch your appraised value as well as your rate. Homestead appraisals are still subject to a 10 percent annual cap, and the temporary 20 percent cap on non-homestead properties under $5 million expires after tax year 2026. Rising values can quietly eat some or all of the savings from falling rates, so comparing both numbers year over year is the only way to know whether your actual bill went down.
The Honest Bottom Line
Texas is on a path to zero school M&O taxes, not zero property taxes. Seniors with modest homes may already owe little or nothing in school M&O after the 2025 exemption increases take effect. But cities, counties, and special districts remain fully in the game, I&S debt still has to be paid, and Article VIII still requires property to be taxed.
Full elimination would mean replacing over $100 billion in annual revenue, amending the state constitution, and persuading hundreds of local taxing entities to accept state-controlled funding instead of locally set rates. Each step is possible. None is close. What is close, and what you can plan around, is continued compression of school rates, larger homestead exemptions, and property tax relief staying near the top of the legislative agenda for the foreseeable future.