Texas has among the highest property taxes in the United States, with median property tax rates varying widely across different counties in the state. Understanding the range of property tax burdens can help homeowners and prospective buyers evaluate the costs of living in different Texas locales. This article provides an overview of property tax rates across key Texas counties, along with other details homeowners should know.
Property Tax Rates Across Texas Counties
Highest Property Tax Rates
Some of the Texas counties with the very highest effective property tax rates include:
- Harris County: 2.13%
- Tarrant County: 2.08%
- Denton County: 2.06%
- Travis County: 2.03%
- Dallas County: 1.81%
These rates are based on median property taxes paid as a percentage of median home value for each county. What stands out is that many of the urban counties in Texas anchor some of the top property tax rates statewide. For example, Harris County, containing the city of Houston, tops the list with an effective rate of 2.13%. This means a home valued at $200,000 would incur about $4,260 in annual property taxes in Harris County.
Generally, property taxes in Texas derive from four jurisdictions: county, city, school district, and any special districts. For urban counties like those listed above, the combined tax rates across these entities stack up to rank among the most expensive. Those living in Texas' biggest cities will pay the most property tax compared to rural areas.
Cheapest Property Taxes
On the other end of the scale, some of the Texas counties with the lowest effective property tax rates include:
- Motley County: 0.51%
- Pecos County: 0.56%
- Presidio County: 0.57%
- Hudspeth County: 0.60%
- Culberson County: 0.60%
These rural counties situated in western Texas offer some of the most affordable property tax environments. Motley County owners pay a median of just 0.51% of their home value in property taxes each year. That results in annual taxes of only about $1,020 per year on a $200,000 home.
Low property values and limited local services allow rural counties to maintain lower millage rates across all taxing jurisdictions. Their sparse populations also limit school district expenditures and infrastructure needs. These factors stack up to create minimal property tax burdens compared to urban regions.
Property Taxes on a $200,000 House
To compare the range of property taxes on a common home value, consider a house priced at $200,000. Assuming this value, total annual property taxes would be:
- High end: Harris County - $4,260
- Low end: Motley County - $1,020
At the extreme end, property taxes on this $200,000 home vary by over $3,200 per year between expensive Harris County versus affordable Motley County.
As another comparison, Travis County (Austin) property taxes on this home would be about $4,060 annually. Dallas County (Dallas) would be around $3,620. Meanwhile, Presidio County in rural West Texas would be only $1,140 annually for the same home.
These examples illustrate the significant savings for homeowners buying in many rural areas. However, lower property taxes may come with longer commutes if working in urban job centers.
Average Texas Property Tax Rate
Averages can also help summarize the range of Texas property tax rates. Overall statewide, the median effective property tax rate is 1.69%. This rate applies to the middle of the market - half of properties pay more than this and half pay less.
Broken down by area:
- Median for urban counties: 1.97%
- Median for suburban counties: 1.80%
- Median for rural counties: 0.94%
Unsurprisingly, dense urban areas sustain the highest rates while remote rural areas have lower levies. Suburban communities fall somewhere in between. For precise averages in a certain county, consult local property tax data. But overall, these medians reflect higher relative costs in Texas metros versus outlying areas.
Calculating Property Taxes in Texas
For an estimate of the exact property taxes owed on a specific home, Texas homeowners can use this calculation:
Property tax = (Home value x Assessment rate) x Tax rate
Where:
- Home value = Market value of the home
- Assessment rate = Varies by county, typically 0.25 to 0.40
- Tax rate = Combined rate across all jurisdictions (look up locally)
This formula provides an estimate of property tax liability for a home. For example, on a $250,000 home in Travis County with a 0.25 assessment and 2.03% tax rate, the math would be:
Property tax = ($250,000 x 0.25) x 0.0203
Property tax = $62,750 x 0.0203
Property tax = $1,274
Note the assessment rate adjustment, which accounts for Texas' lack of taxes on full market value. Check local rules to determine the assessment percentage.
This calculation can provide a ballpark estimate of property taxes owed in a given Texas county and home value scenario. Always consult local tax offices for precise estimates.
Texas Senior Property Tax Exemptions
Texas provides generous property tax exemptions for qualifying senior citizens. Homeowners aged 65+ who meet ownership and occupancy rules can receive school tax exemptions. Moreover, seniors can potentially freeze taxable values to prevent increases. Key facts on Texas senior property tax breaks include:
- School taxes - Exempt on home values up to $160,000
- Tax freeze - Caps taxable value once age 65 is reached
- Income limits - vary by county, up to $100,000 yearly income
- Other exemptions - Available for disability and surviving spouses
These exemptions provide major relief on property taxes to qualifying senior Texans. Contact local tax authorities to determine eligibility. Seniors should absolutely investigate if they can reduce their property tax burden through these generous exemptions.
New Texas Property Tax Laws
Texas legislators have enacted various new property tax reform laws in recent years attempting to provide relief:
- House Bill 3 (2019) - Lowered school district tax rates by 4 cents per $100 value statewide. Also tightened revenue growth caps on cities and counties.
- Senate Bill 2 (2019) - Slowed city and county taxation by limiting year-over-year increases to 3.5% without voter approval. Required voter approval for future tax hikes.
- Senate Bill 8 (2021) - Expanded protections for senior citizens and disabled Texans, including a tax freeze on home values up to 140% of the median locally.
These laws have provided some property tax reductions, especially for seniors. However, Texas still depends heavily on property taxes to fund local services. Ongoing legislative proposals aim to limit future growth, but substantial reform remains challenging.
Why Are Texas Property Taxes High?
Given its reputation for high property taxes, why exactly does Texas lean so heavily on this revenue source? Reasons include:
- No income tax - With no state income tax, Texas relies heavily on sales and property taxes to raise revenue.
- School funding - Education consumes a large portion of property taxes, especially in urban districts educating more students.
- Local control - Communities have latitude in setting property tax rates, and choosing higher levies to fund services.
- Housing growth - Surging home values increase appraisals, raising taxes collected at existing rates.
- Legislative inertia - substantive reform is difficult given disparate local impacts across a state as large as Texas.
Absent an income tax, Texas will likely continue dependence on property tax revenue. But homeowners should stay abreast of any future legislative reforms that could provide relief through tighter caps or expanded exemptions.
Conclusion
While categorized among higher property tax states, Texas' rates are nuanced locally across urban, suburban, and rural areas. Understanding county-specific tax burdens provides insight for homeowners and homebuyers evaluating costs of living. With median property tax rates varying from over 2% down to 0.5% between expensive urban and affordable rural counties, Texans should analyze rates in areas matching their lifestyle needs. Ongoing legislative reforms may provide some relief, but Texas will continue relying on property tax revenues into the foreseeable future.
