Houston Property Taxes: What Every Buyer Needs to Know

One of the biggest surprises for buyers relocating to Houston from other states is the property tax bill. Texas has no state income tax — a genuine financial advantage — but it funds state and local government primarily through property taxes, which run among the highest effective rates in the nation.

How Houston Property Taxes Are Calculated

Property taxes in Texas are calculated by multiplying your home's assessed value (set by the county appraisal district) by the combined tax rate for all applicable taxing entities — which typically includes a city, county, school district, and various special districts.

The Homestead Exemption — File It in Your First Year

Texas offers a Homestead Exemption that reduces your assessed value by $100,000 for school district tax purposes, and caps your annual appraisal increase at 10% once filed. On a $400,000 home, this saves roughly $2,000–$2,500 per year in school taxes. File with your county appraisal district in January or February of the year after you purchase — it applies to that full tax year.