Texas property tax: the complete homeowner's guide

The big picture

Texas's effective property tax rate is approximately 1.80% — sixth highest in the nation. Combined with no state income tax, the overall Texas tax structure shifts the burden from earnings to ownership. Two consequences fall out:

• The state-level political pressure to control property tax is intense, leading to several recent reforms (the 2023 increase in the school homestead exemption, the homestead cap)
• The Texas appeal process — called a "protest" — is more developed and homeowner-accessible than almost any other state
• Texas property tax is paid in arrears, with bills mailed in October and due January 31

How a Texas tax bill is built

Texas uses appraisal districts (one per county, plus a few multi-county districts) to set values. The process:

1. The Central Appraisal District (CAD) sets market value as of January 1 each year and mails Notice of Appraised Value in April or May.
2. The 10% homestead cap is applied: appraised value for tax purposes can rise no more than 10% per year for homestead-qualified properties.
3. Exemptions are subtracted: $100,000 school homestead (state-mandated since 2023), plus optional 20% county/city add-ons, plus stacking senior/disability/veteran exemptions.
4. Each taxing entity's rate is applied: Texas often expresses rates as dollars per $100 rather than mills (so a "tax rate of 2.45" means $2.45 per $100 of assessed value, or 24.5 mills).
5. The total is mailed by the county tax assessor-collector in October. Pay by January 31 to avoid penalties.

Exemptions: where the savings live

Texas's exemption stack is generous when fully claimed:

• $100,000 school district homestead exemption. Increased from $40,000 in 2023 by Senate Bill 2. Applies only to school district taxes (which are typically the largest share of the bill). Saves roughly $1,000–$1,500 annually for a typical homestead.
• 20% optional county/city/special district homestead. Counties and other taxing jurisdictions can add a 20% homestead exemption (or up to $5,000, whichever is greater) to their own portion of the tax. Many but not all counties take this option.
• Over-65 exemption. Additional $10,000 school district exemption for homeowners 65+, plus an automatic school tax freeze at the rate in effect when you turn 65 — your school taxes never rise after that, regardless of assessed value.
• Disability exemption. Same $10,000 school additional exemption and tax freeze; you can claim either the over-65 or disability, not both.
• Disabled veteran. Up to 100% exemption for permanently/totally disabled veterans with 100% service-connected disability. Smaller exemptions for partial disability ratings.
• Surviving spouse. Of disabled veterans and first responders — full exemption inherited in many cases.

File at your county appraisal district. The deadline for current-year effect is generally April 30, but late filing is allowed up to two years back with refund or credit. Application is one-time and rolls forward — but moving to a new home requires a new application.

The 10% homestead cap

Texas caps the year-over-year growth in appraised value for tax purposes on a homestead at 10%. Market value can rise more than 10%, but for tax purposes only 10% is captured. The gap between market value and appraised value (sometimes called the "homestead cap savings") accumulates as you hold the property.

Unlike Florida's Save Our Homes, the cap doesn't transfer to a new property. Buying a new Texas home resets the cap. New buyers often see their first-year tax bill come in higher than what the seller was paying — sometimes substantially higher in fast-growing markets.

The protest process — Texas's homeowner power tool

Texas's protest system is the most developed in the country. The Notice of Appraised Value mailed each spring includes a clear protest form, deadlines, and procedural information. Roughly:

• Deadline: May 15 or 30 days after the notice is mailed, whichever is later. Calendar this as soon as the notice arrives.
• Filing options: File online via your CAD's portal, by mail, or in person. Online is now standard in virtually every Texas county.
• Two grounds: "Market value" (the appraised value is too high) and "equal and uniform" (your property is assessed unfairly relative to comparable properties — a uniquely Texas argument). You can argue both simultaneously.
• Informal review first. Most protests resolve at an informal meeting with a CAD appraiser, often by phone or video. If unresolved, escalate to the Appraisal Review Board (ARB) for a formal hearing.
• Success rate: Roughly 50% of residential protests result in some reduction. Higher-value properties and newer-construction properties protest most successfully.

The state Comptroller publishes a sample protest evidence packet that walks through the process; it's free, available on comptroller.texas.gov. Contingency-fee firms (Ownwell, ProtestYourAppraisal, Five Stone) handle Texas protests on a 30–50% contingency basis if you'd rather not DIY.

Run our appeal savings calculator to see what a protest might net you. Even modest reductions compound — a 10% reduction on a $9,000 annual tax saves $900/year, $4,500 over 5 years, $9,000+ over 10.

Understanding MUDs, PIDs, and special districts

Master-planned communities, especially in the Houston, Dallas, and Austin metros, often sit inside special districts that add to the headline tax rate:

• Municipal Utility District (MUD): Provides water, sewer, drainage, often parks and roads in unincorporated areas. Funds infrastructure via a separate property tax line item, typically 0.5–1.5% on top of the headline rate. MUD rates generally decline over time as the bonds are paid off.
• Public Improvement District (PID): Adds a fixed annual assessment to fund specific neighborhood improvements (entrances, common areas, amenities). Often $300–$3,000+ per year per home. Sometimes shows on the property tax bill, sometimes billed separately.
• Fresh Water Supply District (FWSD), Levee Improvement District (LID), Water Control and Improvement District (WCID): Various special-purpose districts. Each adds a separate line item.
• Emergency Services District (ESD): Funds rural fire and EMS. Common in unincorporated areas; usually small add to the rate.

Always research whether a property is inside a MUD, PID, or other special district before signing a contract. The Texas Real Estate Commission requires sellers to disclose MUD status, but PIDs are sometimes missed in disclosures. Check the appraisal district property record and the seller's most recent tax bill.

Major county comparisons

Effective rates vary significantly across Texas. Approximate recent numbers, before MUD/PID:

• Harris County (Houston): ~2.10% effective rate
• Travis County (Austin): ~1.97% effective rate
• Dallas County: ~2.18% effective rate
• Tarrant County (Fort Worth): ~2.16% effective rate
• Bexar County (San Antonio): ~2.08% effective rate
• Collin County (suburban Dallas): ~1.85% effective rate
• Williamson County (suburban Austin): ~1.95% effective rate
• Rural counties: often 1.30–1.60% — lower mill rates, lower home values

The MUD/PID overlay can add another 0.5–2.0% on top, particularly in newer master-planned communities. Always use actual recent tax bills for the specific property as your benchmark.

Common Texas-specific mistakes

• Forgetting to file the homestead. One of the single most common Texas mistakes. The previous owner's homestead does not transfer. File with your CAD by April 30 of your first full year.
• Not protesting. Texas's CADs are notoriously aggressive on values. The protest process is structured to be accessible and tilts toward homeowner-favorable outcomes when evidence is presented.
• Ignoring the over-65 freeze. When you turn 65, file the over-65 exemption immediately — your school taxes freeze at the rate in effect that year and never rise as long as you live there.
• Buying inside an unidentified MUD/PID. The headline tax rate looks reasonable until you see the MUD line item double the effective burden in year 1. Always pull the actual recent tax bill.
• Equity protest neglect. Texas uniquely allows "equal and uniform" protests — arguing your property is assessed higher than comparables. CADs sometimes resist, but the law is on the homeowner's side. Don't skip this argument.

Putting it together

Texas's high property tax rate is real, but the offsetting protections — generous homestead exemptions, the 10% cap, the homeowner-friendly protest process, and the over-65 freeze — make the actual effective burden much lower than the headline suggests for engaged homeowners. The mistakes that cost the most are passive: not filing exemptions, not protesting, not researching MUD/PID overlays.

Use our mill rate calculator (note: enter your Texas rate as $/$100 × 10 to get mills, or just plug the per-$100 rate into the mill field knowing the math is the same), our homestead savings calculator to quantify your exemptions, and our protest savings calculator to project the impact of a successful protest.