Effective rate, median annual bill, homestead exemption, and assessment cap rules under Tex. Tax Code § 11.13
Median bill is the actual ACS 2022 figure for owner-occupied housing units in Texas. Your specific bill will vary by county and municipality — local mill rates can swing the effective rate by 30%+ within a single state.
The effective property tax rate is the single most important fixed operating expense for buy-and-hold rental property. At 1.68%, every $100,000 of Texas property value generates approximately $1,680 in annual property tax — money that comes off the top before any other expense, debt service, or vacancy reserve.
Texas's effective rate of 1.68% places it among the highest property tax burdens in the U.S. (national median ~1.02%). For investors, this means underwriting must include a substantial property-tax line — and any deal that doesn't pencil after a 1.5%+ tax drag will not improve over time, since assessment growth typically tracks or exceeds rent growth.
$100,000 school district exemption (2023 HB 3); $40,000 for school M&O for 65+/disabled. Annual appraisal increase capped at 10% on homesteads.
The exemption is granted under Tex. Tax Code § 11.13. To claim it, owner-occupants must typically file an application with the county assessor (most states require filing once, with renewal triggered only by change of ownership or use). Failure to file the application means full taxation at the non-homestead rate.
The effective property tax rate in Texas is 1.68% of fair market value, according to Tax Foundation analysis of U.S. Census Bureau ACS 2022 data published in 2024. The median Texas homeowner pays $3,872 annually in property taxes. That is approximately 165% of the U.S. national median effective rate of 1.02%.
$100,000 school district exemption (2023 HB 3); $40,000 for school M&O for 65+/disabled. Annual appraisal increase capped at 10% on homesteads. Statutory authority: Tex. Tax Code § 11.13.
Generally no. Homestead exemptions, primary-residence assessment caps, and senior/disabled credits in Texas apply only to owner-occupied primary residences. Rental properties are typically taxed at full assessed value with no cap on annual reassessment growth, unlike owner-occupied homes which benefit from the 10% appraisal cap.
Local assessors determine fair market value (or taxable value, depending on the state). The taxable value is then multiplied by the local millage rate set by counties, municipalities, school districts, and special districts. Texas's effective rate of 1.68% reflects the combined burden of all local taxing jurisdictions on the underlying market value of the property.
Effective rate source: Tax Foundation analysis of Census ACS 2022 (published 2024). Statutory citation: Tex. Tax Code § 11.13. Last updated April 29, 2026. For informational purposes only — not tax or legal advice. Consult a CPA or tax attorney for your specific situation.
