What Causes Your Property Taxes to Increase in Texas?

Owning property in Texas comes with a financial responsibility that often catches homeowners by surprise—property taxes. In Texas, property taxes are known to be higher than the national average, and, unfortunately, many homeowners experience an increase in their tax bill each year. Understanding the reasons behind these increases can help you plan better, budget wisely, and maybe even discover ways to save. Here’s a rundown of the main factors driving up your property taxes in Texas and what you can do about it.

1. Rising Property Values

One of the biggest factors affecting property tax rates in Texas is the value of your home, which is assessed annually by your local appraisal district. As the real estate market grows hotter in Texas, property values tend to increase, particularly in high-demand areas like Austin, Dallas, and Houston. When your property value goes up, so does your tax bill.

According to data from the Texas Comptroller’s office, higher appraisals mean higher tax responsibilities for homeowners, even if you haven’t made any changes or improvements to your home.

What You Can Do:
Consider filing a protest if you feel the appraised value of your property is inflated or doesn’t accurately reflect your home’s condition. Many homeowners have successfully lowered their taxes by challenging their appraisals.

🏠 Save Big on Property Taxes: Texas Property Tax Assessment Appeal Guide.

2. Increased Local Government Budgets

In Texas, property taxes directly fund local services like public schools, law enforcement, and infrastructure. As communities grow and their needs expand, local governments often require more funding, which may lead to higher tax rates. Each taxing authority—such as the school district, county, or city—sets its own tax rate based on budget requirements, which can impact your total tax bill.

For example, schools make up a large portion of property taxes in Texas, and school funding needs often drive tax increases, especially in districts experiencing rapid population growth.

What You Can Do:
Stay informed about local budgets and bond elections in your area. These initiatives can raise property taxes, and as a resident, you have a say by voting on these issues. Engaging in community forums or attending city council meetings can also help you stay aware of any upcoming changes that may affect your tax bill.

3. Home Improvements and Renovations

Thinking of upgrading your kitchen or adding an extra room? While renovations can add value to your home, they can also lead to an increase in your property taxes. When you make improvements, your home’s assessed value may increase, leading to a higher tax bill.

For example, adding square footage, upgrading fixtures, or installing energy-efficient features can all increase the value of your property, which in turn can raise your taxes.

What You Can Do:
If you’re planning on making improvements, consider their potential impact on your taxes. You might also explore renovation options that add less taxable value to your home, like landscaping or painting, if you’re hoping to avoid a tax increase.

4. Change in Tax Rate Limits (No Statewide Cap on Property Taxes)

In Texas, there is no statewide limit or “cap” on property taxes, which means that your local appraisal district and taxing authorities have a significant say in what you pay. Although homeowners are protected from drastic increases due to the homestead exemption (capping appraisal increases at 10% per year for primary residences), local tax rates are still determined independently, which means they can fluctuate.

Some local governments have increased their tax rates as housing values have risen, which further drives up property tax bills.

What You Can Do:
Ensure you’re taking advantage of all exemptions available to you, such as homestead, senior citizen, or disabled person exemptions, which can lower your taxable property value. It may not prevent tax rate changes, but it can still lead to noticeable savings on your bill.

5. Population Growth and Demand for Services

Texas is growing—fast! With more people moving to Texas every year, local governments have to expand infrastructure, public safety, and school systems to support these new residents. This often translates to a need for more tax revenue, which is partially covered by increasing property taxes.

For example, cities like Austin and Dallas have seen rapid population increases, leading to a rising demand for schools, road repairs, and public services. Meeting these needs often means that taxpayers foot the bill.

What You Can Do:
While population growth isn’t something you can control, understanding how it affects property taxes can help you plan ahead. Monitoring your local government’s spending and supporting cost-efficient projects could help minimize the impact on your taxes.

How Are Property Taxes Calculated in Texas?

Property taxes in Texas are calculated based on the assessed value of your home, the local tax rate, and any applicable exemptions. Here’s how it breaks down:

• Assessed Value: The county appraisal district evaluates your home’s market value annually.
• Tax Rate: Local taxing entities, like your city or school district, set rates based on their funding needs.
• Exemptions: Various exemptions can reduce your taxable value, including homestead, senior, and disability exemptions.

Each of these components plays a role in the final amount you owe, and understanding each factor can help you anticipate and potentially reduce your property tax bill.

Property Tax in Texas: Top 10 Property Tax by County 

1. Property Tax in Harris County 
2. Property Tax in Dallas County  
3. Property Tax in Tarrant County (Fort Worth)
4. Property Tax in Bexar County (San Antonio)
5. Property Tax in Travis County (Austin)
6. Property Tax in Collin County (Plano)
7. Property Tax in Denton County (part of the DFW metroplex)
8. Property Tax in El Paso County (El Paso)
9. Property Tax in Fort Bend County (suburb of Houston)
10. Property Tax in Montgomery County (north of Houston)

3 Tips to Lower Your Property Taxes in Texas

Ready to take control of your property taxes? Here are some practical ways to potentially lower your bill:

1. Claim All Eligible Exemptions: Exemptions like the homestead exemption cap the amount your home’s appraised value can increase each year. Other exemptions for seniors, veterans, and disabled individuals can also provide significant savings.
2. File a Protest with Your Local Appraisal District: If you believe your property’s assessed value is too high, you can file a protest. By gathering evidence like comparable sales data or proof of damage, you can make a strong case to reduce your appraisal.
3. Stay Informed on Local Budget Changes: Watch for local elections, as many budget increases come from approved measures that increase tax rates. By staying informed, you can take an active role in how your community’s money is spent.

Texas Property Taxes: Common Myths Debunked

Final Thoughts

Property taxes may feel like an inevitable part of homeownership in Texas, but understanding what drives those increases can make a big difference. By staying proactive, knowing how your property is appraised, and taking advantage of any available exemptions, you can manage and possibly even lower your property tax burden.

At Abode, we’re here to help you make sense of your property tax bill and find ways to save. Our platform offers tools, resources, and expert guidance to help you navigate the complexities of property taxes in Texas. Ready to get started on lowering your property tax bill? Reach out to Abode today, and let us help you take control of your property taxes.