In Texas, local entities, such as school districts, city councils, and county governments, are responsible for determining property tax rates annually. These groups calculate the rate needed to cover their budget, staying within limits set by state law. Texas also holds “tax rate hearings,” allowing citizens to express their opinions on proposed rate changes.
These tax rates are used along with the value set by appraisal districts to calculate property taxes for homeowners each year.
Texas residents typically pay high property tax rates because there is no state income tax. But how do rates compare to the rest of the country? And how do tax rates vary across the state’s 254 counties?
How Texas Property Taxes Compare to the Rest of the United States
While there are several factors that can influence property tax rates across the country and within a state, property tax reliance and home values are the two biggest factors.
Texas ranks among states for the highest effective property tax rates, largely because it doesn’t have a state income tax. Therefore, counties rely on property taxes to fund services.
Texas’ effective property tax rate is 1.68%. These states rank ahead of Texas with the highest effective tax rates in the United States, according to 2023 data from Tax Foundation:
- New Jersey – 2.23%
- Illinois – 2.08%
- New Hampshire – 1.93%
- Vermont – 1.83%
- Connecticut – 1.79%
With the exception of New Hampshire, the states listed above have an income tax. Expensive real estate and cost of government contribute to higher tax rates in states like New Jersey. For example, New Jersey’s median sale price as of May 2024 was $458k, compared to $338k in Texas, according to Zillow data.
County Property Tax Rates Across Texas
Property tax rates vary significantly across Texas’ 254 counties. This is because counties’ taxing units may have other revenue sources, such as sales tax, that allows them to adopt a lower tax rate.
Urban counties such as Harris (Houston), Dallas, and Tarrant (Fort Worth) typically see the highest effective property tax rates. Harris County, for example, has an average effective property tax rate of around 2.13%.
In North Texas, Denton and Collin counties both have an effective rate above 2%. These counties often experience higher rates due to rapid population growth and extensive public schooling demands.
Rural counties like Borden County and Ward County often enjoy lower tax rates, sometimes as low as 0.35%. Homes in these rural areas are typically lower in value than Texas’ more populous counties and cities.
Median Property Value Across Texas
As mentioned previously, property value can greatly affect the amount of taxes paid, even between counties with similar tax rates. For example, Travis County (Austin) and Victoria County both have an effective property tax rate of 1.95%.
However, Travis’ median home value is much higher than Victoria, making the median annual property tax bill more than double what homeowners in Victoria typically pay.
These are the counties with the highest median value in Texas, all of which occupy Central and North Texas. These counties also include Texas’ metropolitan areas of Austin, Dallas, and Fort Worth.
- Travis
- Collin
- Kendall
- Denton
- Williamson
Median Property Tax Payments
Like tax rates, median annual property tax payments can vary depending on the county. Using a median sales price of $338k, the median property tax payment in Texas is $5,678.
Generally, people living in rural or less populated counties in Texas will pay less than homes near metro areas. There are several counties in Texas where the median annual tax payment is above $6,000:
- Collin
- Denton
- Fort Bend
- Rockwall
- Travis
- Williamson
There are also several counties where the median annual tax payment is below $1,000, including:
- Borden
- Briscoe
- Motley
- Newton
- Shelby
Calculating Property Taxes in Texas
Texas levies property taxes as a percentage of combined appraised value. Property taxes are calculated by multiplying the tax rate by the appraised value of the property. The property value is determined by the county appraisal district. For example, if a home is valued at $600,000 with a tax rate of 2%, the annual property tax bill would be $12,000, assuming no exemptions.
Navigating property taxes in Texas can be daunting due to its complexity and variability. If you are struggling to afford your current tax liability, there are options. Perhaps one of the most important options for homeowners is to exercise their right to file a property tax protest.
A protest allows you to appeal your appraised value. If your value is lowered, you reduce your property tax liability.
North Texas Property Tax Services provides residential property tax appeal services in Collin, Dallas, Denton, and Tarrant counties. Learn more about our services and sign up with NTPTS.
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