Texas Property Taxes Rank Sixth Highest in the U.S.

When it comes to purchasing a home in the thriving state of Texas, families must take several factors into account. Besides considering the mortgage rate, location, and overall price of the home, the cost of yearly property taxes also plays a significant role.

In major metropolitan areas like San Antonio, property tax rates have reached some of their highest levels due to increasing appraisal values. As property taxes continue to rise, local and state governments are working to alleviate the burden on homeowners struggling to meet these substantial fees.

A recent analysis by the Tax Foundation compared property tax rates nationwide and revealed that Texas had the sixth-highest property tax rate in the United States. With a tax rate of 1.68%, the Lone Star State topped the property tax list, surpassing states like New Jersey (2.23%) and Illinois (2.08%).

Despite Texas’ lower cost of living, other states with higher costs of living such as California and New York had tax rates of 0.75% and 1.40%, respectively. The primary contributing factor to Texas’ high property tax rate is the absence of state income tax, which necessitates relying on property taxes to fund government expenses, according to the analysis.

Data from 2021 shows that residents of Bexar County pay a median property tax of $3,719, while residents of Travis County (including Austin) pay a median property tax of $6,517. In the growing county of Comal, families pay a median property tax of $4,087, according to the analysis.

Depending on the neighborhood, size of the home, and other factors, property taxes can exceed $10,000 in 2023, following a $1,000 increase in 2022 driven by the growing housing market. As a result, many homeowners have protested their property values, hoping to lower their property tax burdens.

Fortunately, there is some relief in sight. Governor Abbott recently approved an $18 billion tax cut to assist Texas homeowners dealing with rising property taxes. Using funds from the state’s $12.6 billion budget, this relief includes reductions in school taxes, resulting in tax cuts of over 40% for certain homeowners, as reported by the Texas Tribune.