No State Income Tax, but Property Taxes Matter
Texas has no state income tax, which is attractive to many people. The state relies more on sales and property taxes, and property taxes can be a significant part of your monthly housing cost. Rates vary by location because several taxing districts, such as the county, city, school district, and special districts, each set their own.
How Property Taxes Work
Your county appraisal district appraises your property each year, and taxing entities set rates. Your tax bill is generally the appraised value, minus any exemptions, multiplied by the combined tax rate.
The Homestead Exemption
If you own and live in the home as your primary residence, you can apply for a homestead exemption with your county appraisal district. It reduces the taxable value of your home, and it also limits how fast the appraised value used for taxes can rise each year on a homestead. Homeowners who are 65 or older or disabled may qualify for additional protections. Exemption amounts can change, so check with your appraisal district for current details.
Protesting Your Appraisal
If you believe your property is appraised too high, you have the right to protest. Appraisal notices usually arrive in the spring, and there is a deadline to file. Comparable sales and photos of condition issues can help your case.
Budget Before You Buy
When estimating what you can afford, include taxes, insurance, and any HOA dues, not just the mortgage. Ask your agent for the most recent tax bill on any home you are considering, and remember that taxes may change after you buy.
This is general information and not tax advice. Talk to a tax professional about your situation.
