How Do I Calculate Property Tax in Texas?

A table view with documents, calculator and dollars representing how to calculate property tax in Texas

Understanding how to calculate property tax in Texas is essential for homeowners, prospective buyers, and real estate investors alike. Property taxes in Texas are a significant part of homeownership costs and vary depending on location, property value, and local taxing authorities.

The Basic Formula

To calculate your property tax in Texas, use this simple formula: Assessed Value × Local Tax Rate = Annual Property Tax

  • Assessed Value: This is the taxable value of your property, as determined by your County Appraisal District (CAD). It’s based on the market value of the property as of January 1 each year.

  • Local Tax Rate: Expressed as a percentage, this rate includes taxes from your city, county, school district, and other special districts (like hospital or utility districts).

For example, if your home has an assessed value of $300,000 and your total local tax rate is 2.2%, your annual property tax would be:

$300,000 × 0.022 = $6,600

Step-by-Step Guide

  1. Find Your Assessed Value: Visit your local CAD website or appraisal notice to see your property’s current assessed value.

  2. Determine the Total Tax Rate: Look up the combined tax rate from all applicable taxing entities in your area. Most CADs provide this on their website or annual tax bill.

  3. Apply the Formula: Multiply your assessed value by the total tax rate to estimate your property tax bill.

Important Considerations

  • Homestead Exemption: If your home is your primary residence, you may qualify for a homestead exemption, which reduces your taxable value and lowers your tax bill.

  • Appraisal Cap: For homesteads, the assessed value can’t increase by more than 10% per year, even if the market value rises faster.

  • Tax Rate Changes: Local tax rates can change annually based on local government budgets and voter-approved initiatives.

Final Tip

For the most accurate figures, always consult your County Appraisal District. They provide up-to-date assessments, tax rates, and details on available exemptions.

If you are unsure, reach out to Dimov Partners today for expert help to calculate your property tax in Texas precisely and explore smart strategies in order to lower your tax bill.

George Dimov