By Tanya Kerr, M.Ed., Broker Associate, REALTOR® | T. Kerr Property Group | Updated May 2026
Of all the surprises that catch relocating buyers off guard, Texas property taxes top the list.
Texas funds public services through property taxes because there’s no state income tax. The result: property tax rates here are among the highest in the country. A relocating family that doesn’t plan for this often discovers their housing budget is meaningfully smaller than they expected.
This guide explains how Texas property taxes actually work, what they cost in real dollars, the major 2026 update that most articles haven’t covered, and the practical steps every newcomer should take.
(Note: This is general information, not tax advice. Consult your CPA for your specific situation.)
How Texas Property Taxes Are Calculated
Your annual property tax bill is the assessed value of your home multiplied by the combined tax rate of every taxing authority that covers your property:
- School district (the largest portion, typically 1.0%-1.4%)
- City (Georgetown, Round Rock, Cedar Park, Leander, etc.)
- County (Williamson)
- Emergency services district (in some areas)
- Special districts: MUD or PID (in newer developments)
Total combined rates typically run 1.8% to 2.5% of assessed value.
Assessed value vs. market value. The county appraisal district sets an assessed value each year. This is what they tax. It’s not necessarily what your home is worth on the open market.
The 10% cap. Texas caps annual increases in assessed value for homestead properties at 10%.
What Texas Property Taxes Actually Cost in Real Dollars
Here’s what to expect on common home prices in Williamson County:
- $400,000 home: roughly $7,200-$10,000/year before exemptions
- $500,000 home: roughly $9,000-$12,500/year
- $750,000 home: roughly $13,500-$18,750/year
- $1,000,000 home: roughly $18,000-$25,000/year
- $1,500,000 home: roughly $27,000-$37,500/year
- $2,000,000 home: roughly $36,000-$50,000/year
Compared to other states:
- California average effective rate: 0.73%
- Washington average effective rate: 0.94%
- New York average effective rate: 1.40%
- Texas average effective rate: 1.60% statewide; 1.8%-2.5% in Central Texas
The November 2025 Update: Texas Prop 13 (SB 4)
This is the major 2026 update that most relocation articles haven’t caught.
Texas voters approved Proposition 13 (SB 4) in November 2025, confusingly the same number as California’s famous Prop 13, but unrelated. The Texas measure raised the school district homestead exemption from $100,000 to $140,000.
What this means in practice: On your primary residence, $140,000 is subtracted from your home’s assessed value before school district taxes are calculated. On a $450,000 home, that exemption typically saves $1,800-$2,200 per year on the school tax portion alone.
For homeowners 65+: An additional $60,000 exemption applies, bringing the total to $200,000. Plus a school tax freeze.
For disabled veterans: Substantial additional exemptions apply, up to a 100% exemption depending on the disability rating.
The catch: you must apply. The homestead exemption is not automatic. Apply between January 1 and April 30 of the year following your purchase.
MUDs and PIDs: The Hidden Tax Bumps
Many newer Williamson County developments include special districts that add additional property tax obligations.
MUD (Municipal Utility District). Funds water, sewer, and drainage infrastructure for new developments. Typically adds 0.3%-0.8% to the standard tax rate, paid until the bonds are retired (often 20-30 years).
PID (Public Improvement District). Funds local improvements like enhanced amenities, security, or beautification.
Why this matters: A home in a MUD might have a total tax rate of 2.6% or higher. On a $750,000 home, that’s $19,500/year before exemptions, versus roughly $14,250/year in a non-MUD property.
MUD/PID disclosure is required by Texas law. We always pull the full tax breakdown for any home we show, before you make an offer.
Protesting Your Property Tax Assessment
Many Texas homeowners successfully protest their assessed value each year and reduce their tax bill.
The process: Each year between April and May, you receive a notice from the county appraisal district showing your new assessed value. If you believe the value is too high, you can file a protest by the deadline (typically May 15 or 30 days after notice).
Evidence that helps: Recent comparable sales below the assessed value, appraisal reports from a recent purchase, photos showing condition issues that affect value.
DIY vs. professional protest: Many homeowners protest on their own. For higher-value homes, a property tax consultant (typically working on contingency) can be worthwhile.
Frequently Asked Questions
How much are property taxes in Williamson County, Texas?
Total combined property tax rates in Williamson County typically run 1.8% to 2.5% of assessed value. On a $500,000 home, expect $9,000-$12,500 per year before exemptions.
What is the new Texas homestead exemption for 2026?
Texas voters approved Proposition 13 (SB 4) in November 2025, raising the school district homestead exemption from $100,000 to $140,000. On a $450,000 home, that saves roughly $1,800-$2,200 per year. Homeowners 65+ get a $200,000 total exemption.
How do I apply for the Texas homestead exemption?
File with the county appraisal district where your home is located. Apply between January 1 and April 30 of the year following your purchase. The application is free.
What is a MUD in Texas real estate?
A MUD (Municipal Utility District) is a special tax district that funds water, sewer, and drainage infrastructure in new developments. MUD taxes typically add 0.3%-0.8% to the total property tax rate.
Can I deduct Texas property taxes on my federal return?
Yes, with limits. The federal SALT (State and Local Tax) deduction is capped at $10,000 per household. Consult your CPA.
How do I protest my Texas property tax assessment?
File a protest with your county appraisal district by the deadline (typically May 15). Present evidence that your home’s assessed value is too high.
About T. Kerr Property Group
Our team helps every relocation client understand the full property tax picture before they make an offer, including MUD/PID identification, exemption planning, and tax bill estimation. T. Kerr Property Group is a woman-owned, mission-centered real estate team serving Georgetown, Round Rock, Austin, and the surrounding Central Texas area. Our combined team brings 800+ five-star reviews, 2,500+ homes sold, $1 billion+ in total sales production, and 65+ years of combined experience. We are proud PT50 winners, recognized by the Austin Business Journal Residential Real Estate Awards, featured in Real Producers and FOX 7 Austin, voted Best in Round Rock and Georgetown’s Best, and known as one of the top real estate teams in Williamson County and Travis County. Our focus is simple: help people make smart financial decisions through real estate with expert guidance, fierce advocacy, and integrity every step of the way.
Ready to talk? Call (512) 851-8350 or visit our contact page at https://tkerrrealestate.com/contact-us/.