How Property Taxes Work in Texas

Texas has no state property tax and no state income tax — property taxes are local. Your county appraisal district appraises your home’s value each year; then each taxing unit covering your address (school district, county, city, special districts) sets its own rate. You pay the combined rate on your appraised value, minus exemptions. Bills come out in fall and are due by January 31.

Because Texas has no state income tax, local services — especially public schools — are funded largely through property taxes, so effective rates are among the higher in the nation. Rapid home-value growth in metros like Austin also pushes bills up. The trade-off is no tax on your paycheck. Exemptions and the homestead cap soften the impact for owner-occupants.

Combined rates in the Austin metro commonly land in the roughly 1.8%–2.5% range of appraised value, depending on which city, school district, and special districts (like a MUD) cover the address — newer MUD neighborhoods sit at the higher end. Rates change yearly; verify the exact combined rate with the county appraisal district for the specific property.

A MUD (Municipal Utility District) is a special taxing district that finances water, sewer, and drainage infrastructure for a development, repaid through an added tax rate on homes inside it. It can add roughly 0.3–1% on top of the base rate, often declining as the district’s debt is paid down. Many newer Austin-area communities sit in a MUD — ask for the current MUD rate before buying.

Yes. If the home is your primary residence on January 1, you can file a homestead exemption with your county appraisal district to reduce the taxable value (school districts offer a sizable general exemption), and it caps how much your assessed value can rise each year. It is free to file. Confirm current amounts and deadlines with your appraisal district.

Yes. Texas homeowners who are 65 or older (or disabled) can claim an additional exemption and, for school taxes, a "tax ceiling" that freezes the school-tax amount on their homestead. Some counties and cities offer their own over-65 exemptions too. Eligibility and amounts are set locally — confirm with your county appraisal district.