Property Taxes in Texas: Rates, Exemptions, and How They Work (2026)
TL;DR
Texas has no state income tax, which means property taxes are the primary funding source for local government and schools. The average effective property tax rate is around 1.60%, among the highest in the nation. Your home is appraised annually by your county appraisal district (CAD). The homestead exemption saves most homeowners $100,000 off the school district taxable value plus additional amounts depending on your county and city. Texas has a generous protest process that lets you challenge your appraised value every year. Over 50% of Texas homeowners who protest get a reduction.
How Texas Property Taxes Work
Texas property taxes have three components: appraisal, exemptions, and tax rates. Each is handled by a different entity.
Appraisal
Your county's Central Appraisal District (CAD) determines the market value of your property every year as of January 1. Texas is one of the few states that appraises annually. The CAD uses sales comparison, cost approach, and income approach to estimate value.
You receive an appraisal notice in April or May each year showing your proposed value for the coming tax year.
Exemptions
Texas offers several exemptions that reduce your taxable value:
| Exemption | Amount | Who Qualifies |
|---|---|---|
| General Homestead (school taxes) | $100,000 | All homeowners (primary residence) |
| General Homestead (county/city) | Up to 20% of value, varies by jurisdiction | All homeowners |
| Over 65 / Disabled | Additional $10,000 (school), varies elsewhere | Homeowners 65+ or disabled |
| Over 65 School Tax Ceiling | Freezes school taxes at current level | Homeowners 65+ |
| Disabled Veteran | $5,000-$12,000 or 100% for total disability | Veterans with service-connected disability |
Tax Rates
Tax rates are set by each taxing unit (school district, county, city, special districts) based on their budget needs. The rates are expressed per $100 of taxable value. A typical combined rate is $2.00-$2.50 per $100.
The 10% Homestead Cap
Texas limits the annual increase in your homestead's taxable value (not market value) to 10% per year. If your home's market value jumps 20% in one year, your taxable value can only go up 10%. The cap does not apply in the first year after you buy or in the year you establish a homestead exemption.
This cap creates a gap between market value and taxable value for long-term homeowners, providing significant tax savings in rapidly appreciating markets.
The Protest Process
Texas calls its appeal process a "protest." You have until May 15 (or 30 days after the appraisal notice is mailed, whichever is later) to file a protest with your CAD.
The process:
- File a Notice of Protest. Most CADs accept online filing.
- Informal hearing. You meet (in person, by phone, or online) with an appraiser to discuss your value. About 85% of protests are resolved here.
- Formal hearing (ARB). If the informal hearing does not resolve it, you go before the Appraisal Review Board. You present evidence, the CAD presents evidence, and the board decides.
- Further appeals. You can appeal the ARB decision to district court, binding arbitration, or SOAH (State Office of Administrative Hearings).
Evidence That Works
- Comparable sales showing lower values than your appraisal
- Photos of property condition issues
- Independent appraisals
- Evidence of unequal appraisal (similar homes in your area assessed lower)
Texas also allows you to protest on the basis of "unequal appraisal," meaning you can argue your home is appraised higher than comparable properties, even if the absolute value is correct.
Payment Schedule
Texas property taxes are due January 31 of the year following the tax year. Taxes for 2026 are due January 31, 2027. Bills are mailed in October or November.
- February 1: 6% penalty + 1% interest
- Each additional month: 1% more interest
- July 1: Additional 15-20% collection fee for accounts turned over to a law firm
Property Tax Loans
Texas is one of the few states that allows property tax lending. Private companies will pay your delinquent taxes and set up a repayment plan with interest. While this prevents a tax sale, interest rates can be high (8-18%). Read the terms carefully before using a property tax loan.
No State Income Tax Trade-Off
Texas funds government services primarily through property taxes and sales taxes. The absence of a state income tax means property tax rates are higher than in most other states. On a $350,000 home, you might pay $5,600-$8,750 per year in property taxes depending on your location.
That makes getting your appraisal right critical. Use our free property tax analyzer to check whether your Texas property is over-appraised. If it is, the protest process is homeowner-friendly and more than half of homeowners who protest get a reduction.
Frequently Asked Questions
What should I know about property taxes in texas: rates, exemptions, and how they work (2026)?
Texas has no state income tax, which means property taxes are the primary funding source for local government and schools. The average effective property tax rate is around 1.60%, among the highest in the nation. Your home is appraised annually by your county appraisal district (CAD).
How Texas Property Taxes Work?
Texas property taxes have three components: appraisal, exemptions, and tax rates. Each is handled by a different entity.
What should I know about the 10% homestead cap?
Texas limits the annual increase in your homestead's taxable value (not market value) to 10% per year. If your home's market value jumps 20% in one year, your taxable value can only go up 10%. The cap does not apply in the first year after you buy or in the year you establish a homestead exemption.
What is the process for the protest process?
Texas calls its appeal process a "protest." You have until May 15 (or 30 days after the appraisal notice is mailed, whichever is later) to file a protest with your CAD.
What should I know about payment schedule?
Texas property taxes are due January 31 of the year following the tax year. Taxes for 2026 are due January 31, 2027. Bills are mailed in October or November.
What should I know about property tax loans?
Texas is one of the few states that allows property tax lending. Private companies will pay your delinquent taxes and set up a repayment plan with interest. While this prevents a tax sale, interest rates can be high (8-18%).
What should I know about no state income tax trade-off?
Texas funds government services primarily through property taxes and sales taxes. The absence of a state income tax means property tax rates are higher than in most other states. On a $350,000 home, you might pay $5,600-$8,750 per year in property taxes depending on your location.