Texas Property Taxes
Texas has no state income tax, so schools, cities and counties rely heavily on local property taxes. The state has spent billions to buy down school taxes and raised homestead exemptions again in 2025. The debate now is whether to keep cutting, and how to pay for it.
The basics
There is no state property tax in Texas. Local governments, including school districts, cities, counties and special districts, each set their own rate on the value your county appraisal district assigns1.
A homestead exemption removes part of your home's value from taxation. On November 4, 2025, voters raised the school district homestead exemption from $100,000 to $140,000, and the extra exemption for homeowners 65 or older or disabled to $60,0002. For example, a $300,000 home is taxed by the school district as if it were worth $160,0001.
Voters also approved a $125,000 exemption on business personal property, such as equipment and inventory2. The state's 2026-27 budget includes $51 billion for property tax relief3.
Limits already apply. Cities and counties generally must ask voters before raising property tax revenue for operations by more than 3.5% a year. School districts have their own formula and must also hold an election to exceed their limit4.
The Governor has proposed eliminating school property taxes for homeowners. The Comptroller's office estimated that ending homeowners' school maintenance and operations taxes would cost the state at least $8.6 billion a year, growing to $12 billion by 2032. Because property tax rules are in the state constitution, a change that big would need a two-thirds vote of lawmakers and approval by voters5.
Key terms
- Appraisal district
- The county agency that sets your property's taxable value. You can protest the value. It does not set tax rates1.
- Homestead exemption
- The part of your home's value that is not taxed. The school district exemption is $140,000, plus $60,000 more if you are 65 or older or disabled1.
- Voter-approval rate
- The highest tax rate a local government can adopt without an election. For most cities and counties it allows about 3.5% more operating revenue a year4.
- Tax compression
- When the state pays to lower school district tax rates, replacing the lost local money with state funds.
In Texas
School district taxes are usually the largest part of a Texas homeowner's bill5. Because the state sends aid to replace lowered school taxes, property tax relief is now one of the biggest items in the state budget3.
Your bill is set by several bodies you vote for: your school board, city council and county Commissioners Court each adopt a rate, usually by late September. A rate above the voter-approval limit generally goes to voters at the next uniform election date4.
How people see it
The strongest case for each view, in terms its supporters would recognize. We don't pick a side.
Eliminate school property taxes
Texans never truly own their homes if they must pay rent to the government forever. Replacing school property taxes with state money or sales taxes would protect retirees and young families from being taxed out of their homes as values rise.
Keep cutting and cap growth
Texas property taxes are among the highest in the country. The state should keep using surpluses to buy down rates, raise exemptions and tighten limits on how fast local governments can raise taxes.
Hold steady
Big cuts have already been made, and replacing local money with state money locks in huge ongoing costs. It is time to let recent changes settle and protect the state budget before promising more.
Local flexibility
Growing suburbs need schools, roads, police and fire service. Tight caps force cuts or shift costs elsewhere. Local voters and the officials they elect should decide what their community needs.
Shift the burden
Homeowners carry too much of the load. More of the burden should fall on high-value commercial and industrial property, and on exemptions and abatements that let some businesses pay less.
Who decides
- Texas Legislature and Governor: Set exemptions, caps and how much state money goes to buy down school taxes. Big changes also need voter approval.
- Your school board: Sets the school district tax rate, usually the largest part of your bill.
- City Council: Sets the city tax rate.
- County Commissioners Court: Sets the county tax rate.
- County appraisal district: Sets your property's value, not your tax rate. In counties of 75,000 or more people, like Tarrant, voters elect three board members in November of even-numbered years, local taxing units appoint five, and the county tax assessor-collector also serves6.
Questions to ask a candidate
- Would you support eliminating school property taxes for homeowners? How would you replace that money?
- Should local governments be able to raise more than 3.5% a year in operating revenue without an election?
- Should business property get tax breaks to attract jobs, or should those end?
- Which services would you protect first if tax revenue had to be cut?
Last reviewed 2026-09-26. Spotted something wrong? Every claim links to its source so you can check it yourself.
Sources
- Property Tax ExemptionsTexas Comptroller of Public Accounts
- Property Tax Today, January 2026Texas Comptroller of Public Accounts
- 2025 Legislative Update, Tax Policy NewsTexas Comptroller of Public Accounts
- Truth-in-TaxationTexas Comptroller of Public Accounts
- Ending school property taxes for homeowners would cost Texas nearly $9B per year, officials sayCommunity Impact
- County Appraisal District Elections, Population 75,000 or MoreTexas Secretary of State