Texas Property Taxes, Explained Without the Sales Pitch
How Texas actually funds its schools and cities — and what the number on your closing statement really means.
By Ty · March 4, 2026
Texas has no state income tax. That fact is repeated so often that most out-of-state buyers stop reading the moment they see it — and then get surprised at closing.
The state pays for its schools, cities, hospital districts, and community colleges primarily through property tax. Your effective rate is the sum of every taxing entity that touches your parcel.
How the rate is actually built
A typical DFW rate stacks like this: city (0.3–0.6%), county (0.2–0.3%), school district (1.0–1.2%), and any special districts such as MUDs or PIDs (0.2–1.0%). Add them up and you land between 1.8% and 2.8%.
In a master-planned community you'll often see the highest number, because the developer used a MUD or PID to fund infrastructure. That's not automatically bad — it usually means better amenities — but you should price it in.
The homestead exemption
Once you close on a primary residence, file your homestead exemption. It removes a portion of your appraised value from taxation and caps annual increases at 10%. In a hot market, that cap is the single biggest protection you have.
File between January 1 and April 30 of the year after closing. Miss it and you wait another twelve months.
Talk it through
Have a follow-up question?
Ty answers real relocation questions on every consultation call.