Understanding the Property Tax Process

Property taxes are a fact of life for homeowners, and in Texas — one of the few states that doesn’t use a state income tax — property taxes fund local governments. In addition to supporting public school districts and colleges, these taxes fund city services, including first responders, libraries, playgrounds, and more. Communities need these services to thrive and grow, and it’s helpful to learn how these taxes are collected and distributed.

Property Tax Rate Schedule

Property taxes in Texas are first determined by an appraisal through the county appraisal district. Appraisers consider the current market value of all property within the county and estimate what your property is worth as of Jan. 1 of that year. A list of taxable property is then passed to local taxing units representing the city, county, schools, and other special districts which use these funds.

The taxing units then set a budget to decide how much of these funds they need to spend, and by August or September, the tax rate is set and adopted. Starting in October, property tax bills are sent to taxpayers who have until Jan. 31st of the following year to pay to avoid penalty and interest fees.

You can find your property tax records on your tax appraisal district’s website. Visit the Texas Comptroller’s website and search for your county to find your appraisal district’s contact information.

Can You Reduce Your Property Tax?

It varies by state, but in Texas, homeowners may qualify for exemptions that can take thousands off the taxable portion of their property’s appraised value. Types of common exemptions include:

• Residence Homestead
• Age 65 or Older or Disabled Persons
• Disabled Veterans
• Surviving Spouse of U.S. Armed Services Member Killed in the Line of Duty

• Surviving Spouse of First Responder Killed in the Line of Duty

Most exemptions require applications, and you’ll need to read the statutes for each carefully to determine if you’re eligible. Learn more about exemptions in Texas on the Comptroller’s website. View which exemptions are currently applied to your taxes by visiting your county’s tax appraisal website.

You may lower the taxable value through an appraisal adjustment. An agricultural appraisal is available if the land is used principally for agriculture, including farming; raising livestock, poultry, fish, or exotic animals; timber production, or wildlife management. This is not an exemption but lowers the tax level as the land is appraised at its productivity value instead of its market value.

When you file your taxes, you can deduct the amount paid on property tax. The amount is capped at $10,000 for individuals or $5,000 if you’re married and filing separately. This includes property tax paid on your primary home, land, RVs, boats, and other vehicles.¹

Understanding how property tax works and possible exemptions can help when it’s time to pay. Learn more about what to expect when buying a home and how property taxes can be paid through escrow accounts in our article, “Property Tax With a New Home Purchase.” Our final article in this series covers
"Protesting Property Tax." Visit with a tax attorney for questions on your property tax.

¹ Topic No. 503 Deductible Taxes from IRS.gov.

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