Texas property tax effective rate: ~1.74% (high). No state income tax; high property taxes; Prop 4 of 2023 raised homestead exemption to $100K.
Published May 7, 2026
## Property tax in Texas
Property taxes fund local government — schools, fire, police, libraries, parks. Texas's effective rate (~~1.74%) varies dramatically by county and city.
### Texas property tax framework
No state income tax; high property taxes; Prop 4 of 2023 raised homestead exemption to $100K.
## How property tax is calculated
Standard formula:
**Property tax = Assessed value × Tax rate (millage / mill levy)**
**Assessed value:**
- Some states use 100% of market value
- Others use a fraction (e.g., Alabama 10% of market value, California's restricted assessed value)
- Many states reassess every 1-6 years
**Millage / mill rate:**
- Mil = 1/1000 of a dollar
- Combined rate from county + city + school district + special districts
- Often shown as "per $1,000 of assessed value" or as a percentage
## Common tax classifications
Most states classify property differently for tax purposes:
- **Residential** (often lowest rate)
- **Commercial / industrial** (higher rate)
- **Agricultural** (current-use valuation)
- **Vacant land**
- **Personal property** (vehicles, business equipment in some states)
- **Centrally-assessed** (utilities, railroads)
## Common exemptions and caps
**Homestead exemption** — most states give partial exemption for primary residence. Amount varies hugely:
- Florida: $50K + Save Our Homes 3% cap
- Texas: $100K (post-2023)
- DC: ~$84K
- Many states: $20K-$50K
**Senior / disabled / veteran exemptions** — most states have additional exemptions for:
- Seniors (65+)
- Disabled persons
- Veterans (especially disabled veterans)
- Surviving spouses of military members
**Annual assessment / tax caps:**
- California: 2% per year (Prop 13)
- Florida: 3% homestead increase cap
- Maryland: 10% residential increase cap
- Texas: 10% increase cap on homestead
- Oklahoma: 3% increase cap
- Various states have similar caps
**Other exemptions:**
- Religious / charitable property (federal + state)
- Educational institutions
- Government property
- Historic preservation
- Conservation easements
- Affordable housing
## Special programs
**Senior freeze / senior deferral programs.** Many states freeze taxes for seniors over a certain age + income threshold, or allow tax deferral until sale.
**Circuit-breaker programs.** Income-based tax credits when property taxes exceed % of income.
**Current-use valuation.** Agricultural / forestry / open-space property valued at use rather than market.
**Property tax abatements.** For new construction, redevelopment, business attraction.
## When taxes are due
Varies by state and locality:
- Some annual (lump sum)
- Some semi-annual (March / September)
- Some quarterly
- Most have late penalties of 5-10% + interest
- Long-overdue accounts go to tax sale
## Tax sales / lien sales
When property taxes go unpaid:
**Tax lien sale:** State / county sells lien to investor; owner has redemption period to pay (with interest) or lose property.
**Tax deed sale:** State / county forecloses and sells the property itself.
Procedures vary widely by state. Tax sales create both opportunity (investor income) and risk (property loss for delinquent owners).
## Appeals (briefly)
If you think your assessment is too high:
1. **Informal review** with assessor first
2. **Formal appeal** to county / state board
3. **Court appeal** if board denies
Strict deadlines apply (typically 30-90 days from notice). See our state-specific property-tax-appeals guide for details.
## Federal tax interaction
**State and Local Tax (SALT) deduction** under federal income tax:
- Capped at $10,000 since 2018 Tax Cuts and Jobs Act
- Allows deduction of property taxes + state income / sales taxes (combined)
- TCJA cap may sunset in 2025 (legislation pending)
**Mortgage interest deduction** also affected by limits.
## What you should do
If your Texas property tax bill seems too high: review your assessment carefully. File an appeal if assessment exceeds market value. Apply for ALL exemptions you qualify for. For complex cases (commercial property, multiple exemptions, large assessment errors), hire a property-tax consultant or attorney. Most Texas property-tax consultants charge contingency fees (25-40% of first year's tax savings).
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*This guide is general information about Texas law as of early 2026 and is not legal or tax advice. Property tax law is heavily local and changes annually. Talk to a CPA or property-tax attorney about your specific situation.*
This guide is for general information only and does not constitute legal advice. Laws change and outcomes depend on your specific situation — talk to a licensed attorney before acting on anything you read here.