The Ultimate Guide to Texas Property Tax

Nov 19, 2018

With home ownership comes property tax. State and local governments assess this tax on land, buildings, and other relevant categories of personal property, but most people probably know of it because it is assessed based on a home's value.

The amount you pay in property tax depends on how much your local assessor believes your home is worth. For private homes, this usually translates to how much it would bring via sale or how much it would cost to produce. Your local or state government then multiplies that amount by your local tax rate, also known as a mill rate.

Texas Property Tax vs Nationwide Averages

If you live in Texas, mill rates can make your property tax shoot through the proverbial roof. Texas may be one of only seven states not to charge a state income tax, but it has the third highest property tax in the United States, according to national data.

What Is the Property Tax in Texas - Doing the Math

Texas homeowners pay an average of 1.81 percent of their home's value in property tax, a rate that is only 0.08 percent lower than the highest rate in the country. Information drawn from the 2017 tax year revealed the average property tax in dollars to be $4,660 statewide. Those in Austin had the highest average property tax in the state at $7,012.

By way of comparison, the US Census Bureau reported in 2017 that the average American household pays only $2,127 per year in property tax. 

Your House Taxes in Texas

Property tax averages allow you to understand how your property tax compares to fellow homeowners in your state, but each owner's amount due actually derives from an individual calculation. In Texas, this is a four-step process:

  1. Appraising Taxable Property. In January, each county's appraisal district estimates the value of every property. Appraisers consider property use, value, the identity of the owner, and who will be paying the property tax.
  2. Property value hearings. In May, homeowners who disagree with the assessment of their properties can bring disagreements before a can appraisal review board (ASRB). This board, which consists of a group of private citizens, then sends information about taxable properties to taxing units.
  3. Determination of tax rates. This is done by the local taxing units, which for every homeowner includes the local school district and the county. Some jurisdictions may also have the city and other special districts, such as hospital and fire services, as taxable units. Each unit determines a budget and sets a tax rate that it will need to abide by its budget.
  4. Tax collection. Bills go out to property owners on October 1, but most districts set January 31 of the following year as the deadline to pay without penalty or interest.

The takeaway: As a Texas homeowner, you will pay different property taxes than your neighbors and will likely pay a different amount year to year.

Estimating Your Property Tax

Since Texas real estate taxes are so individual, depending on the value of your home as well as the financial needs of your municipality, it can be difficult to estimate your property tax with any accuracy. Experienced homeowners have an advantage as long as they have kept good records of what their taxes have been in prior years.

If you are a new homeowner, or if you don't have an easy way of finding out what your taxes have been in the past, you can still estimate what you will owe. Here are two avenues to try:

 Visit the website of your county tax office and input the appropriate information into their Property Tax Estimator. In Travis County, for example, they will ask you for information about your districts, exemptions, and home value.    

• Visit the Texas Comptroller of Public Accounts, which publishes all reported tax levies from districts, counties, and cities across the state. If you look at properties that are similar in value to yours, you can get an estimate of what you might owe. 

• If you're feeling adventurous, there are some independent personal finance websites that provide automated tax estimates. Be wary, however; these are not affiliated with any official government entities.

Your Texas Property Tax Rate and You

Property taxes are determined by home value because, theoretically, people who can afford higher-value homes can afford higher taxes. In Texas, however, the high property tax rate means that many families are facing bills that they can't afford.

In the summer of 2018, a North Texas newspaper reported property tax bill increases of 40 percent or higher over the last eight years, a rate that has led some families to question whether they can afford to stay where they are.     

Several months earlier, the same newspaper had shared the story of a Fort Worth widow whose pension was no longer enough to cover the rising property tax on her home. Finances forced her to move to a smaller home near the Arkansas state line, four hours away from her daughter, grandchildren, and great-grandchildren.

It is important to remember that these stories, and others like them, come from a state with no income tax. Even without that expense, homeowners are finding property taxes in Texas to be a burden.

You Don't Have to Move

Many homeowners believe that their only choices are to pay their property taxes or move, but there is another way. EasyKnock has developed a program known as Sell and Stay

This unique opportunity allows a homeowner to sell his or her property to EasyKnock, receiving all of the equity he or she has built up, but still stay in the home as a tenant. The seller can continue to pay rent until he or she is ready to re-purchase the home or relocate.

Save Your Home Today

You shouldn't be driven out of your home because taxes are creeping up higher than you can afford. If you can no longer pay your property taxes, Let EasyKnock take on that expense so that you can go back to enjoying the home that you have worked so hard to maintain.  Contact an EasyKnock representative today to see if Sell and Stay might be a solution for your household.