Texas homeowners pay some of the highest effective property tax rates in the United States — about 1.40% of owner-occupied home value, 7th highest in the country, against a median state rate near 0.79% (Tax Foundation, 2024 data). With no state income tax, property taxes fund virtually all local government services. Understanding the system is essential for every Texas homeowner.
How Texas Property Taxes Work
Texas has no state property tax. All property taxes are levied by local taxing units: county, school district, city, and special districts. Each unit sets its own tax rate (mill levy), and the rates are applied to the assessed value set by your county appraisal district (CAD).
Texas Exemptions — The Big Three
| Exemption | Amount | Who Qualifies |
|---|---|---|
| Homestead Exemption | $140,000 off school district value (raised by Nov 2025 Prop 13, effective tax year 2025) | Primary residence owners |
| Over-65 Exemption | Additional $60,000 off school district (Nov 2025 Prop 11); tax freeze | Homeowners age 65+ |
| 100% Disabled Veteran | Full exemption — $0 in property taxes | Veterans with 100% VA disability rating |
The 10% Homestead Cap
For properties with a homestead exemption, the assessed value cannot increase by more than 10% per year — regardless of how much the market value increases. This cap provides significant protection in rapidly appreciating markets. However, the cap resets when a property sells.
How to File a Protest
File your protest by May 15 or within 30 days of receiving your Notice of Appraised Value, whichever is later. You can file online at your CAD's iFile portal, by mail using Form 50-132, or in person. You do not need an attorney or consultant — any property owner can file.
The 254 County Appraisal Districts
Texas has 254 counties, each with its own CAD. The CAD is responsible for appraising all property in the county. The CAD is governed by a board of directors appointed by the taxing units. The chief appraiser runs day-to-day operations. The CAD is separate from the tax office that collects taxes.
Texas ARB Process
The Appraisal Review Board (ARB) is an independent panel that hears protests. ARB members are appointed by a local administrative law judge. The ARB is separate from the CAD. After the ARB hearing, you can appeal to district court, binding arbitration, or SOAH.
Texas has some of the most taxpayer-friendly appeal rules in the country. The CAD has the burden of proof, you can request evidence 14 days before the hearing, and you can use binding arbitration as a lower-cost alternative to district court.