1. Why Property Taxes Matter in Texas
Texas is unique among large states because it has no state income tax, no inheritance tax, and no capital gains tax. Instead, local governments rely heavily on property taxes to fund essential services like schools, police, fire protection, and infrastructure. For homeowners, that makes understanding property taxes—and how they may change—an important part of financial planning.
2. Recent Property-Tax Relief Measures You Should Know
a) Expansion of Homestead Exemptions
In June 2025, Governor Greg Abbott signed into law a major $10 billion property tax relief package. Highlights include:
- Homestead exemptions for school taxes increased to $140,000 for general homeowners.
- Seniors and disabled Texans now enjoy a higher exemption of $200,000.
These changes represent one of the largest tax relief efforts in Texas history. However, they still require voter approval in the November 2025 constitutional amendment election before taking effect.
b) New Limits on Local Property Tax Increases
In late August 2025, the Texas House approved a bill that lowers the voter-approval threshold for local property tax rate increases—from 3.5% down to just 1%. Governor Abbott strongly supported this measure, stating it would prevent cities and counties from offsetting state tax relief with local rate hikes.
The legislation also includes an exception allowing spending on public safety, such as police and fire budgets, to remain outside the cap.
3. What This Means for Homeowners in Austin
| What It Means | Details |
|---|---|
| Potential Savings | If voters approve the constitutional amendments in November, homeowners could see significant tax savings—especially seniors and disabled homeowners. |
| Stricter Oversight | Cities and counties will face tighter limits on raising property tax rates without voter approval, helping to keep tax bills more predictable. |
| What To Watch | Pay attention to the November election outcome and local government budget discussions, which may still affect other services. |
4. Tips for Homeowners Right Now
- Stay informed: The November 2025 ballot will be critical to the future of property tax relief.
- Engage locally: Follow your city and county updates to see if tax rate changes could come up for voter approval.
- Plan ahead: Factor the proposed new exemption levels into your financial planning, but remember they aren’t official until voters approve them.
5. A Forward-Looking Perspective
Texas is moving toward historic property tax reform. With expanded homestead exemptions and new limits on local tax increases, the state is aiming to shift more power—and savings—into the hands of homeowners. As these changes unfold, staying informed and engaged will help you make the most of these reforms.
Understanding Property Taxes in Austin: An Evergreen Guide for Homeowners
1. The Basics of Texas Property Taxes
Texas is one of the few states without a state income tax. That makes property taxes a primary funding source for schools, counties, cities, and other local services. Unlike some states where property tax rates are set statewide, Texas allows each local taxing authority—such as Travis County, the City of Austin, and school districts—to set their own rates within state guidelines.
For homeowners, this means your annual property tax bill is made up of multiple line items, each tied to a different taxing entity.
2. How Your Property Tax Bill is Calculated
Your property tax bill is based on two main factors:
- Appraised Value: Each spring, the county appraisal district estimates the market value of your home.
- Tax Rate: Local entities (schools, cities, counties, and special districts) set their tax rates, usually expressed per $100 of value.
The formula looks like this:
Appraised Value – Exemptions × Tax Rate = Property Tax Bill
3. Key Exemptions Every Homeowner Should Know
Texas law allows certain exemptions that reduce the taxable value of your home:
- Homestead Exemption: Available to homeowners who occupy their property as a primary residence.
- Over-65 Exemption: Provides additional relief for seniors.
- Disabled Persons Exemption: Offers added savings for those who qualify.
- Disabled Veterans Exemption: Varies based on disability rating.
These exemptions can save homeowners thousands of dollars over time.
4. Why Property Taxes Change Each Year
Even if you don’t remodel or add square footage, your tax bill may rise. Common reasons include:
- Market Value Increases: Austin’s real estate market often grows faster than national averages.
- Voter-Approved Bonds: School districts and cities may raise taxes to fund infrastructure or new facilities.
- Rate Adjustments: Local entities adjust their tax rates annually to balance budgets.
5. Protesting Your Property Value
Every spring, homeowners receive a Notice of Appraised Value from the county. If you believe your home’s appraised value is too high, you can file a protest. Many Austinites choose to do this themselves, while others hire property tax consultants to handle the process.
6. Tips for Homeowners
- Mark your calendar: Watch for appraisal notices each spring and protest deadlines in May.
- File for exemptions: Ensure you’ve applied for the homestead exemption if you qualify.
- Budget for taxes: Factor property taxes into your monthly housing costs, especially if they aren’t escrowed with your mortgage.
- Stay informed: Local tax rates are set each fall, often with opportunities for public input.
7. The Bigger Picture
Property taxes can feel complicated, but they’re a vital part of Texas homeownership. By understanding how they’re calculated, knowing your exemptions, and staying engaged locally, you’ll be better prepared to manage this important part of owning a home in Austin.
Frequently Asked Questions About Austin Texas Property Taxes
When are my property taxes due?
Tax statements typically go out around October 1. Taxes are due upon receipt and must be paid by January 31 of the following year.
When do taxes become delinquent?
Most unpaid bills become delinquent on February 1, when penalty and interest begin accruing.
Do I have to apply for the homestead exemption every year?
Not every year. You must reapply if the chief appraiser requests it in writing, if you move to a new residence, or if your eligibility changes. Appraisal districts also audit exemption records about every five years, and you may be asked to reapply during that process. If you’re selected, you’ll receive a mailed notice (and portal notices, if enrolled).
What do I need if I’m asked to reapply/verify my exemption?
Submit an updated exemption application with a valid Texas driver’s license or DPS ID that shows the same address as the exempt property. (Passports/CHLs aren’t acceptable for this purpose.)
What happens if I don’t verify or reapply when asked?
Your exemptions may be removed, which can change your tax liability. You can reapply; once verified, exemptions are reinstated. If it’s been more than two years since removal, benefits are reset.
How do I apply for a homestead exemption initially?
Apply online via the TCAD portal or submit a paper application by email, mail, or drop box.
Can I claim a homestead on more than one property?
No. You can claim a residence homestead on only one property—your primary residence.
I forgot to apply. Can I apply late?
Yes. You may file a late homestead application up to two years after the date the taxes become delinquent.
How many acres can be included in my homestead?
You can claim the portion used for residential purposes, not to exceed 20 acres (generally one acre or less in practice).
I’m over 65—how is my school tax ceiling handled?
Senior (over-65) tax ceilings are recalculated annually under recent constitutional changes; the official calculation is done by the Travis County Tax Office.
What if I can’t pay my bill in full?
Contact the tax office about installment plans or potential deferrals if you qualify.
