With Texas homeowners preparing to receive their property tax bills in October, property taxes have become a major issue in the state’s 2026 election. Gov. Greg Abbott has made cutting property taxes a central focus of his reelection campaign, while recent tax increases by local governments have put the issue in the spotlight.
But beyond the campaign ads and political debate, many Texas homeowners may have a more basic question: Why is my property tax bill so high?
The question may be especially surprising for residents who moved to Texas from states such as California or Illinois, where taxes are structured differently. The Lone Star State is often viewed as a relatively low-tax state, largely because it does not have an individual state income tax. But Texans still pay taxes, and state and local governments rely on other sources of revenue, including sales and property taxes.
Why Texas Relies on Property Taxes
Property taxes are a particularly significant part of the equation. According to the Tax Foundation, Texas ranked seventh nationally in 2024 for property taxes paid as a percentage of owner-occupied housing value.
So, if Texas doesn’t have an individual state income tax, why are property taxes so high — and what determines how much a homeowner actually pays?
The answer isn’t as simple as a single tax rate. A homeowner’s property tax bill depends on several factors, including the value assigned to the property, the tax rates adopted by local taxing entities, and any exemptions or appraisal limitations that apply to the property.
Unlike a state income tax, which is based on a person’s income, property taxes are tied to the value of real property. As property values rise, the amount of value subject to taxation can increase, potentially resulting in a higher tax bill even if a homeowner’s local tax rate has not increased.
How Texas Property Tax Rates Work
Property taxes in Texas are a little different because there isn’t one tax rate that applies to every homeowner. Texas has no state property tax. Instead, different local governments collect property taxes. Depending on where someone lives, their property tax bill can include taxes from the county, city, school district, and other special districts, such as hospital districts, junior colleges, water districts, and flood-control districts.
Because these entities set their own rates based on the revenue needed for their budgets, the amount someone pays can vary depending on where they live and which taxing jurisdictions apply to their property. This means two homeowners with similarly valued homes can have very different property tax bills.
Tax rates are typically expressed as a dollar amount per $100 of taxable value. A homeowner’s total bill can include several rates added together, including the school district, county, city, and special district rates.
But the tax rate is only part of the equation. The other major factor is the value placed on the home.
How Appraisal Values Affect Your Property Tax Bill
That value is established by the county appraisal district, which determines the taxable value of property each year. The market value, or what the property would sell for under normal market conditions, helps the district determine that number. The district is looking at the property itself, not the homeowner’s income or what they can afford.
The appraisal district takes several things into account when determining what a home is worth, including its location, condition, improvements to the home, market conditions in the area, recent sales of similar properties, and the size and characteristics of the property.
The tax rate is applied to the property’s taxable value. If that value goes up, the tax bill can go up, regardless of whether the local tax rate stays the same. For example, if a home has a taxable value of $300,000 and the applicable tax rates produce a certain bill, that bill is based on the $300,000 taxable value. If the taxable value rises to $350,000, the homeowner could owe even more if the tax rates themselves haven’t changed. In simple terms, taxable value multiplied by the applicable tax rates determines the property tax bill.
Additions or major improvements aren’t needed for a homeowner’s appraised value to change. If similar homes in the area are selling for more, changing market conditions can affect the appraisal of the property.
However, a higher appraised value doesn’t necessarily mean a homeowner has to just accept a higher tax bill. That’s where exemptions and appraisal protests come into play.
How Property Tax Exemptions Can Lower Your Taxable Value
Qualifying Texas homeowners can receive a residence homestead exemption on their primary home, which reduces the property’s taxable value for certain taxing units.
There are also several exemptions that certain Texas homeowners can take advantage of, including exemptions for homeowners who are 65 or older, homeowners with qualifying disabilities, veterans and surviving spouses, among other specific situations.
The largest standard homestead exemption applies to school district taxes, with the Lone Star State currently providing a $140,000 school district homestead exemption for qualifying residences. That exemption helps reduce the amount of a home’s value that is subject to school district taxes: it is not $140,000 off the tax bill.
For example, if someone’s home has a $400,000 taxable value before the school homestead exemption, a $140,000 exemption would generally mean the school district taxes $260,000 rather than $400,000.
An appraisal-value limitation, also known as the 10% homestead cap, can also apply to certain qualifying homesteads. If eligible, the appraised value of a qualifying homestead generally cannot increase by more than 10% per year, excluding certain improvements. It’s important to distinguish between the cap and the exemption because they work in two different ways.
How to Protest Your Property Appraisal
If someone qualifies for an exemption through their county appraisal district but isn’t receiving it, they could be paying taxes on more value than necessary. But what if someone is receiving their exemptions and still thinks their home appraisal is too high?
Protesting a property’s appraised value can be useful if a homeowner believes the appraisal district’s value is too high or incorrect. Protests are filed with the local appraisal review board, giving the homeowner a chance to challenge the district’s valuation.
Reasons to file can vary from the property’s appraised value being higher than what the homeowner believes the home is worth, to incorrect information about the property from the appraisal district, comparable homes indicating a lower market value, or the property’s condition not being properly reflected in the appraisal.
After filing, the appraisal review board will review the protest and allow the homeowner to present evidence, such as information about comparable properties, sales, or issues affecting the property’s value. The ARB then makes a determination on the protest.
O’Connor Helps Lower Property Taxes with Exemptions and Protests
If a protest results in a lower appraised value, the homeowner could end up paying taxes on less property value, which could lower their tax bill. But homeowners don’t have to navigate the process alone. O’Connor specializes in helping homeowners reduce their property taxes.
As part of our commitment to our clients, O’Connor will help file your homestead exemption at no cost. Our team can guide you through the process and help determine whether you qualify. O’Connor also exclusively offers a concierge service, where a representative can visit your property, take photos, and document your home’s condition to help support your property tax protest.
Ready to get started? Enroll now to have O’Connor help you reduce your property taxes.
Frequently Asked Questions About Inheriting a House in Texas
Q: Why are my property taxes so high?
A: Your property tax bill depends on your home’s taxable value and the tax rates charged by the local governments in your area. If your home’s taxable value goes up, your tax bill can go up too.
Q: What is the difference between a homestead exemption and the 10% homestead cap?
A: A homestead exemption lowers the amount of your home’s value that is taxed. The 10% homestead cap limits how much your home’s appraised value can increase each year. They are two different things.
Q: How much is the Texas homestead exemption worth?
The standard Texas homestead exemption is currently $140,000 for school district taxes. That means $140,000 of your home’s value is excluded from those taxes if you qualify.
Q: What is the difference between market value and appraised value?
A: Market value is what your home could reasonably sell for. Appraised value is the value the county appraisal district assigns to your property for tax purposes.
