Texas Property Tax (2026): High Rates, Real Payments
February 3, 2026
6 minutes
Texas appraisal caps, homestead exemptions, and county tax rates shifted again-and most buyers don’t realize these updates can change their monthly mortgage payment by $300–$600 overnight.
This guide breaks down exactly how Texas property taxes work in 2026, how they flow directly into your escrow, and how the reAlpha rebate can cover 1–3 years of property taxes the moment you close.
If you’re shopping in Texas, here’s the real shocker:
A 1% tax-rate difference adds the same monthly cost as a $40,000 higher home price.
Most buyers accidentally “overbuy” simply because they underestimate taxes-not the house.
What 2026 Texas Taxes Really Cost You
| Home Price | Avg 2026 TX Tax Rate | Annual Tax | Added Monthly Escrow | Hidden 5-Year Cost |
|---|---|---|---|---|
| $350,000 | 1.74% | $6,090 | $508/mo | $30,450 |
| $450,000 | 2.12% | $9,540 | $795/mo | $47,700 |
A nearly $10,000 annual tax bill can feel immovable…
But the reAlpha rebate can instantly offset 1–3 years of taxes-turning what feels like a permanent cost into avoided loss and extra buying power.
What Are Property Taxes in Texas?
Texas doesn’t have a state income tax-so counties rely heavily on property taxes to fund schools, roads, emergency services, and local budgets. That’s why Texas property taxes are some of the highest in the country-and why understanding them is critical before you calculate what you can actually afford each month.
Buying a Home? Get up to 1.5% Cash Back at Closing
Get pre-approval first, then start exploring homes knowing you can receive up to 1.5% of the home price back at closing.
2026 Snapshot:
- Average Texas property tax rate (2026): 1.74% of assessed value
- Texas ranks #7 for highest property taxes in the U.S.
- Rates vary sharply by county depending on school district funding needs, local bond approvals, and city budgets
Your property taxes aren’t paid once a year-your lender collects them monthly through escrow. That means the tax rate directly affects your mortgage payment, your debt-to-income ratio, and ultimately your buying power.
How Much Texans Actually Pay in 2026
| Assessed Value | Avg Tax Rate | Annual Tax Bill | Added Monthly Payment |
|---|---|---|---|
| $300,000 | 1.74% | $5,220 | $435/mo |
| $400,000 | 1.74% | $6,960 | $580/mo |
2026 Appraisal Values: What Texas Homebuyers Should Expect
Texas appraisal values are climbing again in 2026-and for many buyers, this is the hidden force pushing monthly payments higher. Appraisal Districts (CADs) recalculate your home's taxable value each year, which means even if your mortgage rate stays the same, your monthly escrow can jump hundreds of dollars.
Key 2026 Appraisal Updates
- Non-homestead appraisal increases capped at 20%
- Homestead properties capped at 10% per year
- High-growth counties (Collin, Williamson, Fort Bend) expect 8–18% valuation increases
- New 2026 legislation tightens protest timelines, reducing the window to challenge inflated valuations
A 10–20% appraisal jump can add $50–$180 to your monthly mortgage with zero warning. Most first-time buyers underestimate this until their lender recalculates escrow.
How Appraisal Increases Hit Your 2026 Payment
| Previous Assessed Value | New 2026 Value (+10%) | Tax Rate | New Annual Tax | Added Monthly Escrow |
|---|---|---|---|---|
| $350,000 | $385,000 | 1.9% | $7,315 → $7,815 | +$41/mo |
| $450,000 | $495,000 | 2.2% | $9,900 → $10,890 | +$82/mo |
2026 Homestead Exemption Updates
The Texas Homestead Exemption is one of the most powerful tools for lowering your property-tax bill, and 2026 brings several buyer-friendly updates that can immediately reduce your monthly escrow. If you plan to buy this year, these changes directly impact how much home you can afford.
2026 Homestead Exemption Changes
- School tax exemption increased from $100,000 → $110,000
- Optional 20% city/county exemption remains available
- Senior (65+) exemption increased from $10,000 → $15,000
- New rule: Homeowners must occupy by January 1 to qualify (no grace period)
That extra $10,000 exemption increase in 2026 may feel small, but at Texas’ average tax rate (1.74%), it removes $174/year in taxes-which is money back in your pocket every year you own the home.
How Much the 2026 Homestead Updates Save You
| Home Value | Exemption Applied | Taxable Value Reduced | Annual Savings | Monthly Impact |
|---|---|---|---|---|
| $350,000 | +$110,000 | -$10,000 vs 2025 | $174/yr | $14.50/mo |
| $450,000 | +Optional 20% | -$90,000 | $1,566/yr | $130/mo |
Save up to 1.5% at closing when you buy
Save up to 1.5% at closing when you combine real estate and mortgage services with reAlpha.
Below are simplified examples to show how the same-priced home can generate radically different tax bills.
Texas County Tax Rate Snapshot
| County | Rate | Median Home Value | Est. Annual Tax |
|---|---|---|---|
| Collin | 2.12% | $485,900 | $10,300 |
| Fort Bend | 2.24% | $420,500 | $9,415 |
| Matagorda | 0.71% | $186,000 | $1,320 |
| San Augustine | 0.79% | $155,000 | $1,220 |
A home in Collin County can cost 8X more per year in taxes than one in San Augustine-even before considering appraisal increases.
Monthly Payment Difference by County
| County | Est. Annual Tax | Added Monthly Escrow |
|---|---|---|
| Collin | $10,300 | $858/mo |
| Fort Bend | $9,415 | $784/mo |
| Matagorda | $1,320 | $110/mo |
Planning to buy? Check your estimated property-tax impact using the Mortgage Calculator
How Texas Property Taxes Are Calculated (Simple 3-Step Formula)
Texas uses a straightforward-but often misunderstood-formula to determine your annual property-tax bill. Understanding this math is the fastest way to estimate your true monthly mortgage payment, since taxes flow directly into your escrow.
Texas Property Tax Calculation
- Assessed Value: Determined annually by your County Appraisal District (CAD) based on market conditions.
- Minus Exemptions: Homestead, Senior (65+), Disability, and Veteran exemptions reduce your taxable value.
- Apply Local Rate: Your county, city, and school district tax rates (per $100 valuation) determine the final amount due.
Tax = (Assessed Value – Exemptions) × (Tax Rate ÷ 100)
In many Texas counties, taxes add the equivalent of a 1–1.5% “extra interest rate” to your monthly payment-a cost buyers overlook until escrow recalculates.
How the reAlpha Rebate Reduces Your Property-Tax Burden
Texas buyers feel one pain more than anything else: property taxes. With rates averaging 1.74% in 2026, many buyers lose $400–$800 every month to escrow before even touching principal or interest.
The reAlpha rebate flips that equation. Instead of absorbing high Texas taxes, you use cash back at closing to instantly cover 1–3 years of property taxes-reducing your effective cost of ownership from day one.
reAlpha Rebate = Cash savings → Covers years of property taxes → Lowers total cost of buying a home
How Many Years of Taxes the reAlpha Rebate Can Cover (2026)
| Home Price | Est. ReAlpha Rebate | Avg Annual TX Property Tax | Years of Taxes Covered |
|---|---|---|---|
| $300,000 | $6,750 | $5,220 | 1.3 years |
| $450,000 | $10,125 | $7,830 | 1.29 years |
| $600,000 | $13,500 | $10,440 | 1.29 years |
Most Texas buyers write a $7,000–$11,000 tax check every year. With reAlpha, that money stays in your pocket-not the county’s.
Estimate your rebate instantly
Future Consequence: Every month you wait to buy is another $500–$900 in taxes you could have offset with your rebate.
How Property Taxes Change the Rent vs Buy Decision in Texas (2026)
Most Texans compare rent vs. buying by looking only at the monthly payment. But in 2026, property taxes are the hidden variable that flips the equation-and they affect renters and buyers differently.
Here’s the simple truth:
- Rent includes property taxes-just hidden in your monthly rent. Landlords pass 100% of their tax bill to tenants.
- Buying unlocks exemptions (Homestead, 65+, disability) that renters can’t access.
- reAlpha’s rebate lowers your upfront cost, often covering 1–3 years of taxes instantly.
- Mortgage calculators give a clearer picture of your true monthly cost once taxes and insurance are included.
In 2026, the average Texas landlord faces a tax increase of 8–18% in high-growth counties. Renters absorb that cost with no equity, no exemptions, and no relief.
Rent vs Buy in a High-Tax Texas County (2026)
| Scenario | Monthly Cost | What You're Paying For |
|---|---|---|
| Renting a $2,200/mo home | $2,200 | Owner’s property taxes + their mortgage + their profit |
| Buying the same home | $2,450/mo | Your mortgage + your taxes - minus exemptions and rebate savings |
Buying seems more expensive each month.”
Not when you factor in:
- Homestead savings
- Tax exemptions
- Equity growth
- The reAlpha rebate covering your first 1–3 years of taxes
Once those apply, buying often becomes $150–$350/mo cheaper than renting in many Texas metros.
Buy Smarter in Texas & Reduce Your Property-Tax Burden with reAlpha
Texas is one of the best states to buy in 2026-if you understand how property taxes shape affordability and choose the right county, exemption strategy, and mortgage structure.
- Best low-tax counties: Matagorda, San Augustine
- Best balance of value + growth: Collin, Fort Bend, Williamson
- Best for first-time buyers: Bexar, Bell, Tarrant
- Upside markets (2026 appraisals rising fast): Collin, Travis, Montgomery
With reAlpha, you can:
- Get up to 1.5% of the buyer agent commission back (0.5% Agent + 1% Mortgage = 1.5% with Title)
- Use your rebate to cover 1–3 years of Texas property taxes instantly
- Get pre-approved early to understand your true tax-adjusted monthly payment
Ready to buy in Texas-and neutralize the state’s biggest cost?
Explore homes, compare tax impacts by county, and see how much you could save with your rebate today.
FAQs
1. What is the average property tax in Texas for 2026?
The average Texas property tax rate in 2026 is 1.74% of assessed value, making Texas the 7th highest in the U.S. For a $400,000 home, that’s about $6,960 per year-roughly $580/month added to your mortgage through escrow. Rates vary widely depending on school districts and county budgets.
2. How do I lower my property taxes in Texas?
The fastest ways to reduce your 2026 tax bill are:
- Filing a Homestead Exemption
- Protesting your appraisal
- Applying for 65+, disability, or veteran exemptions
Strategic buyers also use the reAlpha rebate to cover 1–3 years of taxes instantly-avoiding thousands in early ownership costs.
3. Why are Texas property taxes so high?
Texas doesn’t have a state income tax, so local governments rely heavily on property taxes to fund schools, roads, and public services. This shifts the tax burden to homeowners, especially in fast-growing counties where appraisals rise 8–18% annually. High demand + increased school funding needs = higher tax rates.
4. Does Texas have a property tax cap in 2026?
Yes. In 2026, homestead properties are capped at 10% annual appraisal increases, while non-homestead properties are capped at 20%. These caps limit taxable value growth-not tax rates-so your bill can still rise if your county or school district increases its tax rate.
5. How do Texas property taxes affect my mortgage payment?
Property taxes are collected monthly through escrow, so your tax rate directly impacts your monthly mortgage payment and loan approval amount. In high-tax counties, buyers often see payment increases of $400–$800 per month. This is why calculators that include taxes give a far more realistic affordability picture.
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As a great communicator with excellent negotiation skills, I focus more on establishing unbreakable ties between my clients, as opposed to just helping them achieve their real estate dreams. As a representative of both buyers and sellers, I understand how to lead a transaction process to ensure that the needs of both are met. My track record speaks for itself. Since I ventured into the industry in 2013 as a realtor, I have not only helped many buyers land perfect homes, but I have also assisted tons of owners and investors build wealth.