Property taxes are the part of a Texas home payment that surprises buyers moving from other states, and the part that varies most between two homes at the same price. Here is what makes up the bill.
Your total rate is the sum of the rates set by each taxing entity that covers your address: typically the county, the city, the school district, and sometimes a community college district, hospital district, or emergency services district. Each entity sets its own rate every year.
Because the school district is usually the largest single component, two neighborhoods a few miles apart can carry noticeably different rates.
The county appraisal district assigns an appraised value to your home. Exemptions are subtracted, and the combined tax rate is applied to the remaining taxable value. In a brand-new community, the first-year appraised value may reflect only partially completed improvements, so the second-year bill can be higher.
A Municipal Utility District is a special district created to finance water, sewer, and drainage infrastructure for a development, usually outside existing city utility service. Residents repay that infrastructure through an additional tax rate. MUD rates commonly decline over time as the district pays down its debt and more homes share the burden.
A Public Improvement District funds specific improvements within a defined area, such as landscaping, amenities, or roads. It is collected as an assessment rather than a general tax, and it applies only to properties inside the district. Sellers and builders are required to disclose PID assessments to buyers.
If the home is your principal residence, you can file for a homestead exemption with your county appraisal district. It reduces the taxable value for certain entities and limits how much your appraised value can increase year over year. Additional exemptions exist for people who are 65 or older and for qualifying disabled veterans.
File it. It is a one-time application with your county appraisal district and it is free.
No. Many do not. Whether a community has one depends on how its infrastructure was financed. Ask for the specific tax rate and any assessments for the exact community and homesite you are considering.
The district itself continues, but the rate is set annually and often decreases as the district retires debt and additional homes are built and taxed.
After you close and the home is your primary residence. Check your county appraisal district for current filing windows and requirements.