Yes, Texas has property tax, and it is a major source of funding for schools, counties, and local services
Texas does levy property tax on real estate — land and buildings. Unlike some states, Texas has no state income tax, so property tax and sales tax carry more of the tax burden. Every county in Texas assesses and collects property tax, though the rate varies significantly by location. Your property tax bill goes to your county appraisal district, county tax assessor, and the local taxing units that serve your address: your school district, city or county, and any special districts like water authorities or fire departments.
Property tax in Texas is based on the appraised value of your property. The county appraisal district determines that value each year, and you receive a notice of appraised value in the mail. That value is then multiplied by the tax rate set by each taxing unit to calculate what you owe. The total bill can be substantial — Texas property tax rates range from roughly 0.4% to over 2% of appraised value depending on where you live, with school district taxes making up the largest share in most areas.
Key Takeaways
- Texas property tax is assessed by county appraisal districts and collected by county tax assessors, with rates varying by location and taxing unit.
- Your property tax bill funds schools, county government, cities, and special districts like water or fire authorities in your area.
- The tax is calculated by multiplying your property's appraised value by the tax rate, and you receive a notice of appraised value each year.
- Texas has no state income tax, so property and sales taxes fund state services, making property tax rates higher than in some other states.
- Homeowners may be may have access to to a homestead exemption that reduces the taxable value of their primary residence.
How Texas property tax rates are set and who collects them
Property tax in Texas is not set by a single statewide rate. Instead, each taxing unit — school districts, cities, counties, and special districts — sets its own tax rate. The county appraisal district appraises all property in the county, and the county tax assessor's office collects the tax from all these units combined. Your bill shows a breakdown by taxing unit so you can see how much goes to schools, how much to your city, and how much to other services.
Tax rates are expressed as a dollar amount per $100 of appraised value. For example, if your property is appraised at $300,000 and your combined tax rate is $1.50 per $100 of value, your annual tax bill would be $4,500. School districts typically account for 40% to 50% of the total property tax bill in most Texas counties, with the remainder split among county government, cities, and special districts.
Property tax bills are due by January 31 each year, though you can pay in installments. If you have a mortgage, your lender may require you to pay property tax through an escrow account as part of your monthly payment. If you pay late, penalties and interest accrue quickly — typically 6% interest per year plus a penalty.
What the county appraisal district does and how to challenge your value
The county appraisal district is responsible for determining the appraised value of every property in the county. This value is supposed to reflect the property's market value — what it would sell for on the open market. The appraisal district uses sales data, property characteristics, and market trends to estimate value. You receive a notice of appraised value in the mail, usually in April or May, and this value becomes the basis for your tax bill.
If you believe your property is appraised too high, you have the right to challenge the value. The process is called a protest, and you file it with the appraisal district, not the tax assessor. You must file by a important date set by your county — typically in May or June, though the exact date varies. You can protest by mail, in person, or online depending on your district's procedures. Many districts offer informal review first, where you can present evidence like recent appraisals, repair costs, or comparable sales without a formal hearing.
If the appraisal district denies your protest, you can appeal to the Appraisal Review Board, a panel of local citizens who hear disputes. This hearing is free and you can represent yourself. If you still disagree after that, you can take the case to district court, though this requires hiring an attorney and is uncommon for residential properties.
Homestead exemption and other property tax breaks
Texas offers a homestead exemption that reduces the taxable value of your primary residence. The exemption amount varies by county and taxing unit — some offer a flat dollar amount, others offer a percentage reduction. For school district taxes, the exemption is typically 20% of appraised value statewide, though some districts offer more. For county and city taxes, the exemption varies by location.
To claim a homestead exemption, you must file an process with the county appraisal district. You typically need to prove you own the property and live there as your primary residence. The important date to file is usually in April or May of the year you want the exemption to take effect. Once approved, the exemption continues year to year unless you move or sell the property.
Texas also offers additional exemptions for seniors (age 65 and older), disabled persons, and disabled veterans. These exemptions can be more generous than the standard homestead exemption. Surviving spouses of military members killed in action may also be may have access to to an exemption. Each county sets the amount, so the benefit varies by location.
Property tax for renters and commercial property
If you rent your home, you do not pay property tax directly — your landlord does. However, property tax is often factored into the rent you pay, since landlords pass the cost along to tenants. Renters do not receive a property tax bill or have the right to protest the appraisal, but they may be may have access to to a property tax ceiling under certain circumstances depending on their county.
Commercial and industrial property is also subject to property tax in Texas. The appraisal process is similar to residential property, but commercial values are often based on income potential rather than comparable sales. Business owners can also protest their appraisals through the same process as homeowners.
What happens if you do not pay property tax
If your property tax bill goes unpaid, the county tax assessor's office will send you notices and the debt will accrue penalties and interest. After a certain period — typically around two years, though this varies by county — the county can foreclose on your property and sell it at a tax sale to recover the debt. Tax sales are public auctions, and the winning bidder receives a tax deed to the property.
If you are having trouble paying, contact your county tax assessor's office to discuss payment plans or hardship options. Some counties offer installment agreements or can defer payment in cases of financial hardship. Acting early is important because once a tax sale occurs, your options become very limited.
How property tax differs across Texas counties
Property tax rates vary dramatically across Texas. Some counties have combined rates below 0.8% of appraised value, while others exceed 2%. This variation reflects differences in local spending priorities, school funding needs, and county services. A property worth $300,000 might have an annual tax bill of $2,400 in a low-tax county but $6,000 or more in a high-tax county.
School district funding is the biggest driver of these differences. Wealthier districts with higher property values can fund schools with lower tax rates, while districts serving lower-value properties must tax at higher rates to generate the same revenue. The state provides some equalization funding, but property-rich districts still tend to have lower rates.
Before buying property in Texas, it is worth checking the property tax rate in the specific county and school district. Your real estate agent or the county appraisal district website can provide this information. Some counties publish their rates online, making it straightforward to compare.
Frequently Asked Questions
Can I deduct Texas property tax from my federal income tax?
Yes, you can deduct state and local property taxes on your federal return, but only up to $10,000 per year total for all state and local taxes combined (including income tax and sales tax). This is called the SALT deduction cap. Most homeowners with significant property tax bills will hit this limit, so the deduction may not reduce your federal tax as much as you expect.
What is the difference between appraised value and market value?
Appraised value is the county's estimate of what your property would sell for. Market value is what it actually sells for. They should be close, but they are not always identical. If you sell your home for significantly more or less than the appraised value, the appraisal district may adjust future appraisals based on the sale price.
Do I have to pay property tax if I own land but do not live on it?
Yes, property tax applies to all real estate in Texas, whether you live on it or not. Vacant land, rental properties, and investment property are all taxed. The appraisal process may differ — for example, vacant land is often valued based on its potential use rather than comparable sales — but the tax obligation is the same.
What happens to property tax if I refinance my mortgage?
Refinancing does not change your property tax bill. The tax is based on the appraised value and the tax rates set by your county and local taxing units, not on your mortgage. However, if you refinance and your new lender requires an escrow account, the amount you pay monthly may change because the lender will collect property tax through escrow rather than you paying it separately.
Can I pay my property tax online?
Most Texas counties allow online payment through their tax assessor's website or a third-party payment processor. You can typically pay by credit card, debit card, or electronic bank transfer. Some counties charge a convenience fee for online payment, so check your county's website for details and payment options.