Texas · Property tax for families

Texas property tax: what families actually pay

Texas pairs no state income tax with the highest effective property tax rates in the US. For families with kids in public schools, the math has a specific shape — and the homestead exemption changes it materially.

Effective rate: 2.0%–2.5% (base + ISD + city + county)National rank: 5th–7th highest in the USLast updated

Texas property tax has a specific reputation: high. Effective rates of 2.0–2.5% of full market value put Texas near the top nationally, and unlike California's Prop 13, Texas reassesses to market each year — so your tax bill grows with your home's value. The big offset is no state income tax, which is genuinely material for high-earner relocations. For families with kids in public schools, the math has another specific shape worth understanding: about 50% of your property tax goes directly to your school district (the ISD), and the homestead exemption can shave a meaningful chunk off the bill.

At-a-glance

Estimated annual Texas property tax by home price

Estimates use a typical effective rate for Texas; specific bills depend on town, school district, and exemptions.

$400,000 home~$8,800/yr
$600,000 home~$13,200/yr
$900,000 home~$19,800/yr
$1,300,000 home~$28,600/yr
How it works

Key mechanics

The total rate stack

Your Texas property tax bill is the sum of multiple jurisdictions' rates: the school district (ISD) — typically the largest single piece, around 1.0–1.4%; the county, around 0.3–0.5%; the city, around 0.4–0.7%; and special districts (community college, MUD, hospital). The total effective rate ranges from about 1.7% in some rural counties to 2.6% in Austin, Houston, Dallas-Fort Worth metros. Use your county's tax appraisal district website (e.g. Travis CAD for Austin) for the exact rates that apply to a specific address.

Annual reassessment (no Prop 13 equivalent)

Texas reassesses every property to current market value each January 1. There's no long-term cap on assessment growth, so as your home appreciates, your tax bill does too. The one cap that exists: with the homestead exemption (below), assessed value on a primary residence can grow no more than 10% per year. Without homestead, no cap.

The school finance side (ISD share matters)

Roughly 50% of every Texas property tax dollar funds the local Independent School District. This is structurally different from many states (California, for example) where state-level funding redistributes more evenly. In Texas, where you live = how well your local schools are funded. High-tax-base school districts (Westlake ISD, Eanes ISD, Highland Park ISD) collect substantially more per-pupil than their lower-base neighbors. For families optimizing for schools, this links your property tax directly to your kids' classroom resources — for better or worse.

Recent rate compression

Texas has been cutting school M&O (maintenance & operations) rates aggressively since 2019 (House Bill 3) and again in 2023 (Proposition 4 + accompanying legislation). A typical ISD rate dropped from 1.50% in 2018 to about 1.06% in 2024. The state replaced the lost school revenue with state funding, so school budgets stayed roughly flat. For new buyers in 2026, this means effective rates are about 0.4 percentage points lower than they would have been a decade ago — meaningful on a $700K home (≈ $2,800/year savings).
Family takeaways

What buyers with kids should actually do

  • File for the homestead exemption the year you buy. About 30% of new Texas homeowners forget — leaving $1,000–$2,000/year on the table.
  • Pick your ISD as carefully as your house. Westlake/Eanes/HPISD/Carroll ISD substantially outspend most peers per pupil, and that's funded directly by your property tax. Optimizing for the school district is also optimizing for your tax dollars going local.
  • The 10% homestead cap matters more than people realize. In a hot Austin or DFW market with 15–20% annual appreciation, the cap saves you thousands per year vs. uncapped market reassessment.
  • Don't compare Texas property tax to California's headline 1% rate without including California state income tax. For a $400K household income, the difference can be $25K–$40K/year in California state income tax — enough to offset 2× the Texas property tax bill.
Exemptions

Texas property-tax exemptions

Residence Homestead Exemption

If the home is your primary residence on January 1, you can claim a homestead exemption: $40,000 off the school district portion of assessed value (raised from $25,000 in 2022) plus 20% off the appraised value for school taxes (the General Homestead Exemption). Net savings on a typical $600K home: about $1,200–$1,800/year. File with the county appraisal district in the year you buy.

Over-65 / Disabled Exemption

An additional $10,000 off school taxes for owners 65+ or with qualifying disabilities, plus a tax-rate freeze on the school portion. For families planning for aging parents living in the same home, this is a real long-term consideration.

Disabled Veterans' Exemption

Sliding scale based on disability rating — 100% disabled veterans pay zero property tax on their primary residence in Texas. Major benefit; check eligibility with the county appraisal district.

FAQ

Common Texas property-tax questions

How does the Texas homestead exemption actually save me money?

Two ways. First, $40K + 20% off the assessed value used for school taxes, which is the largest piece of your bill. On a $600K homesteaded home, that's about $4,000 less in assessed value × 1.06% school rate = ~$1,260/year saved. Second, the 10% annual cap on assessment growth — if your home appreciates 18% in a year, your tax-assessed value only grows 10%, capping your bill increase. This compounds substantially in hot markets.

Is Texas property tax really higher than California's?

On a per-year basis, almost always yes — Texas effective rates are 2.0–2.5% vs California's 1.0–1.5%. But over long holds (15+ years), California's Prop 13 cap can flip the comparison. The right comparison includes state income tax (Texas: 0%, California: 9–13% for high earners) and is highly path-dependent on holding period and income level.

Can I appeal my Texas property tax appraisal?

Yes, every year. The deadline is May 15 (or 30 days after receiving the appraisal notice, whichever is later). About 40% of appeals succeed, and the success rate is much higher when you bring comparable recent sales below your assessment. Many homeowners use a tax-protest service that takes 30–50% of the savings as a fee. For a strongly appreciated property, even a small percentage reduction is worth pursuing.

How does property tax compare across Austin, DFW, and Houston?

Roughly similar. Austin metro effective rates run about 2.1–2.4%; DFW about 2.2–2.5% (with some northern Dallas suburbs and Westlake ISD-level zones higher); Houston about 2.2–2.6%. The variation within metros (different ISDs, different MUDs) is usually larger than the variation between metros. Always check the specific appraisal district for the address.

Next

See Texas property tax in a real family report.

Every Family Home Finder sample report includes a state-specific property-tax breakdown applied to the family's comfort target price.

Texas family guideHow property-tax caps work