Texas has no state income tax. The money comes from somewhere, and for homeowners that somewhere is largely property tax. If you are moving here from a state with lower property taxes, this is the line item most likely to change your monthly payment expectations.
How the bill is calculated
Two separate things determine what you owe, and they are set by two different sets of people:
- The appraised value of your home, set by your county appraisal district.
- The tax rate, set by each taxing entity that covers your property — the county, the city, the school district, and often a municipal utility district, a college district, and others.
Your total rate is the sum of every entity's rate, which is why two homes at the same price in different neighbourhoods can have noticeably different tax bills. This is worth checking before you make an offer, not after.
The homestead exemption
If a home is your principal residence, you can apply for a residence homestead exemption with your county appraisal district. It does two useful things:
- It reduces the taxable value your school district taxes are calculated on.
- It caps how much your appraised value can increase year over year for tax purposes, which matters a great deal in a rising market.
That cap is the part people underestimate. In a market where values climb quickly, the limit on annual increases can be worth more over time than the initial reduction.
There are additional exemptions for homeowners who are over 65, disabled, or veterans, and these have their own rules. Exemption amounts and eligibility are set by statute and by each taxing entity, and they do change — check the current figures with your county appraisal district rather than trusting a number from an article.
Applying
The application goes to the appraisal district for the county your home is in — Harris County, Fort Bend County, Galveston County and Brazoria County all cover parts of the Houston area. It is free. You do not need to pay a service to file it for you, and you should be sceptical of official-looking mail offering to do so for a fee.
Protesting your appraised value
Every year the appraisal district sends a notice of appraised value. If you believe the value is too high, you have the right to protest it, and a great many homeowners do.
The process, broadly:
- You receive your notice of appraised value in the spring.
- You file a protest by the deadline printed on the notice. Missing the deadline ends the matter for that year.
- You present evidence, either informally with an appraiser or formally to the appraisal review board.
- You get a decision, and there are further appeal options beyond that if you disagree.
What actually counts as evidence
Not your opinion of the value, and not the size of the increase. What moves the needle:
- Recent sales of genuinely comparable homes near you that closed for less
- Documented condition issues — foundation, roof, deferred maintenance — with photos and repair bids
- Errors in the district's record of your property, such as wrong square footage or a bathroom you do not have
That first one is where an agent can help. Pulling comparable closed sales and knowing which ones an appraisal review board will find persuasive is ordinary work for someone who sells in your area.
Two mistakes worth avoiding
Assuming the previous owner's tax bill is your tax bill. If they had a homestead exemption or an over-65 exemption and you do not, your bill can look very different from what the listing showed. Check what your number will actually be.
Forgetting that the escrow payment follows the tax bill. Your mortgage payment includes taxes. When the appraised value rises, your monthly payment rises with it, usually with a shortage to make up as well.
If you are buying
Ask what taxing entities cover the specific property, not just the county. A municipal utility district can add meaningfully to the rate, and it is entirely normal in newer master-planned communities. It is not a reason to avoid a home — it is a reason to know the real monthly cost before you commit.