If you’ve been asking, “Are Texas real estate taxes high?”, you’re not alone. While Texas is famous for having no state income tax, that often comes with a trade-off: higher property taxes. Let’s unpack how Texas stacks up to other states, break down why the Lone Star State relies heavily on real estate taxes, and what that means for you as a homeowner or buyer.
How Do Texas Property Tax Rates Compare Nationally?
Effective Property Tax Rate
According to the Tax Foundation, Texas homeowners pay an average 1.36% to 1.56% of a home’s value in property taxes—among the highest in the nation (Tax Foundation).
Likewise, a Rocket Mortgage ranking placed Texas around 1.68%, making it the 6th highest in the U.S. (johnsonandstarr.com). Other sources note similar figures—between 1.6% and 1.8%, consistently placing Texas in the top 5–7 states (Construction Coverage), (Texas Tax Protest),(WalletHub).
How That Stacks Up with Other States
Here’s a snapshot of effective property tax rates by state:
| State | Approx. Effective Property Tax Rate |
|---|---|
| New Jersey | ~2.23% (highest) |
| Illinois | ~2.08% |
| Connecticut | ~1.79–1.92% |
| Texas | ~1.58–1.68% |
| New York | ~1.60% |
| Ohio | ~1.36% |
| Alabama, Hawaii | 0.3–0.4% (lowest) |
- In Texas: ~1.58% effective rate calculated on a $303K median home = ~$4,790/year (Kiplinger), (15WalletHub).
- Nationally: average property tax bill runs about $3,500/year (Bankrate), (Houston Chronicle).
So yes—Texas property taxes are high, but not the very highest.
Why Are Texas Real Estate Taxes So High?
No State Income Tax
Texas doesn’t levy state income tax, which means governments depend heavily on property taxes to fund schools, infrastructure, and public safety (Texas Real Estate), (SourceHouston Chronicle).
Local Levy System
All property taxes in Texas are imposed locally – by counties, cities, school districts, and other special districts. Texas law prohibits a state-level property tax.
Home values have risen sharply, and many areas lack caps on annual assessments, so homeowners often see rising tax bills even if rates stay flat (Houston Chronicle).
Does the High Property Tax Make Texas Less Affordable?
Not necessarily. When balanced against what Texas doesn’t tax, the overall tax burden remains competitive.
- Because Texas lacks state income tax, overall state-local tax burden ranks among the lowest in the country—about 8.7% of income per capita (Houston Chronicle).
- Comparatively, states with lower property taxes often have high-income or sales taxes, or both.
So while Texas’s property taxes are steep, total taxes paid—especially for homeowners—can still be lower than in high‑income‑tax states.
What Does This Mean for You?
Homeowners
Expect to pay around 1.6% of your home’s value per year in property taxes. Rising appraisals are common—consider protesting assessed values or using homestead exemptions where possible (TurboTax), (Houston Chronicle).
Buyers & Investors
Be sure to include estimated property tax costs when comparing affordability across states. Even with higher real estate taxes, Texas can still come out ahead thanks to low or zero income taxes.
Retirees & Movers
Despite higher property taxes, Texas remains a top relocation destination—thanks to its lack of income tax, warm weather, and lower overall cost of living (New York Post).
Final Takeaways
- Yes, Texas real estate taxes are relatively high, typically among the top 10 states by effective rate.
- But factoring in the lack of state income tax, the overall tax burden remains low for many Texans.
- Evaluating affordability requires a holistic view—property taxes are only one piece of the tax puzzle.
Ready to Navigate Texas Real Estate with Confidence?
This is why it’s important to have an experienced real estate professional on your side—someone who can help you assess property tax implications, advise on exemptions, and negotiate based on local tax trends.
Contact us at Callbrownie.com and let our experts light the way to making your Texas home ownership journey smooth, smart, and stress-free.