Understanding Property Taxes in Austin, TX
Buying a home in Austin comes with the challenge of having a robust property tax system, particularly as the city grows. Texas does not have any state income tax, and therefore local governments must rely on property taxes to finance schools, roads, and public buildings more.
Taxes are at about 2.1% on average in 2025, and that can be enormous for expensive homes. Understand how these taxes are calculated, how to find and acquire exemptions, and how to contest an overestimated appraisal can save you a lot of money.
We’ll cover everything from appraisals and protests to exemptions and payment plans—using authoritative sources like the Travis Central Appraisal District (TCAD), the Texas Comptroller’s Office, and local tax consultants.
What Makes Austin, TX a Great Place to Buy a Home
No State Income Tax: Texas relies heavily on property taxes for funding. This generally makes property tax rates higher than in many other states.
City Growth: Austin’s booming population drives up demand for schools, roads, and emergency services, often increasing tax bills.
Home Affordability: Property taxes can significantly affect monthly mortgage payments and long-term affordability.
Quality of Public Services: Higher taxes can correlate with better schools, parks, and city infrastructure.
Understanding property taxes helps you budget effectively and seize opportunities to lower your tax burden.
How Austin Property Taxes Are Calculated
In Austin, property tax = appraised value × tax rate.
Appraised Value: Determined by TCAD, reflecting the market value of your home as of January 1 each year.
Tax Rate: Composed of rates set by various local entities (city, county, school district, etc.).
For a $550,000 home in 2025 with a combined rate of ~2.1%, your annual tax bill might be:
$550,000 × 0.021 = $11,550
Tip: If you escrow your taxes with your lender, part of your monthly mortgage payment goes toward this annual bill.
Deep Dive: The Travis Central Appraisal District (TCAD)
TCAD is the official appraisal authority for Travis County. Each year:
They assess the market value of all taxable property.
They mail out Notices of Appraised Value in spring (typically April or May).
Key Responsibilities of TCAD
Data Collection: Examining home sales, building permits, and neighborhood trends.
Market Analysis: Comparing properties with similar features and recent sales.
Appraisal Reviews: Adjusting appraisals if homeowners protest their valuations successfully.
Important: If you disagree with your appraisal, you have the right to protest. Keep an eye on deadlines—usually in mid-May.
Factors Influencing Your Appraised Value
Neighborhood Trends: If similar homes in your area sell for higher prices, expect an uptick in your appraised value.
Property Condition: Upgrades like kitchen remodels or energy-efficient installations can increase your valuation.
Lot Size & Amenities: Larger lots or added features (e.g., a pool) typically boost appraised value.
Market Fluctuations: Demand, interest rates, and local economic conditions can drive property value changes—even without home improvements.
Actionable Tip: Keep records of any wear-and-tear or needed repairs; these can be used as evidence in a tax protest to lower your appraisal.
Taxing Entities & Current Rates
Austin’s total property tax rate is a sum of multiple taxing jurisdictions. While rates can vary by location (and can change annually), here’s an example breakdown for 2025:
| Taxing Entity | Rate (per $100) | Example Tax on $550,000 Home |
|---|---|---|
| City of Austin | $0.4623 | $2,542.65 |
| Travis County | $0.3745 | $2,059.75 |
| Austin ISD | $1.1027 | $6,064.85 |
| Austin Community College | $0.1048 | $576.40 |
| Total Combined Rate | $2.0443 | $11,243.65 |
How Tax Rates Are Set & How They Change
Each taxing entity—like the City of Austin or Austin ISD—adopts a budget to fund services. Once the budget is set, the entity divides that budget by the total taxable property value within its jurisdiction to arrive at a tax rate.
Public Hearings: Government bodies hold hearings to discuss proposed budgets and rates.
Legislative Changes: The Texas Legislature can pass laws capping rate increases or altering how appraisals are done.
Local Ballot Measures: Bond proposals for schools or infrastructure can raise tax rates if voters approve them.
All Available Property Tax Exemptions in Austin
Exemptions reduce the portion of your home’s value subject to taxation. Here are the main options:
Homestead Exemption
Eligibility: Must own and occupy the property as your principal residence on January 1.
Benefit: Reduces taxable value (e.g., up to $40,000 off school taxes) and caps annual appraisal increases at 10%.
Application Deadline: May 1 of each tax year.
Over-65 Exemption
Eligibility: Must be 65 or older (as of January 1).
Benefit: Additional reduction in appraised value for school taxes (commonly $10,000 or more).
Frozen School Tax: School district taxes are often “frozen” at the amount you pay in the year you turn 65 (meaning they won’t increase even if property value rises).
Disabled Veteran Exemption
Eligibility: Must have a service-related disability rating from the VA.
Benefit: Depending on disability percentage, exemptions can range from $5,000 off value to a 100% exemption for 100% disabled veterans.
Disability Exemption
Eligibility: Must meet the criteria for total disability under Social Security.
Benefit: Similar to Over-65 in reducing school taxes.
Charitable Organization Exemption
Eligibility: Nonprofits that meet state criteria.
Benefit: Properties used exclusively for charitable, religious, or educational purposes may be 100% tax-exempt.
Solar/Wind-Powered Energy Device Exemption
Eligibility: Installation of qualifying solar or wind energy systems.
Benefit: The value added by the system is excluded from taxation.
Actionable Step: Visit TCAD’s Exemptions Page to download the relevant forms. Missing deadlines can mean losing out on thousands in savings.
How to Lower Your Property Taxes
Claim All Exemptions: Make sure you file for every exemption you qualify for.
Protest Your Appraised Value: If your value seems inflated compared to similar properties, a successful protest can reduce your tax bill.
Maintain Evidence of Property Condition: Documentation of needed repairs can justify a lower appraisal.
Monitor Local Elections: Bond measures and rate proposals can significantly affect your tax rate.
Consider a Consultant: For higher-value or complex properties, hiring a property tax consultant might pay off if you achieve large reductions.
Protesting & Appealing Your Appraisal
Step-by-Step Protest Guide
Review Your Notice: Compare the appraised value to actual market trends.
Gather Evidence: Collect recent sales data of comparable homes, photos of property defects, contractor estimates for repairs, etc.
File a Protest: Submit your protest online or via mail before the deadline stated on your Notice of Appraised Value (often mid-May).
Informal Meeting: In some cases, you can meet informally with a TCAD representative to discuss and resolve valuation disputes.
ARB Hearing: If unresolved, attend an Appraisal Review Board (ARB) hearing. Present your evidence clearly and professionally.
Appeal if Needed: If you disagree with the ARB’s decision, you can file an appeal in district court or opt for binding arbitration.
Pro Tip: Many property owners in Travis County report a successful reduction in appraised value by presenting solid comparable sales data.
Payment Options & Deadlines
Due Date: Property taxes are due by January 31 each year.
Escrow: Most lenders collect property taxes monthly via an escrow account, bundling it with your mortgage payment.
Lump-Sum: You can pay the entire tax bill directly if you don’t escrow.
Payment Plans: For those facing financial hardship, Travis County may offer short-term payment arrangements.
Penalties & Interest
Starts February 1: Late payments incur penalties and interest. Over time, unpaid taxes can result in a property lien or foreclosure.
Impact on Home Affordability & Long-Term Planning
Monthly Mortgage Payment: Property taxes can add hundreds to your monthly housing costs, impacting how much home you can afford.
Refinancing & Appraisal Growth: A steadily rising property value may help when refinancing, but it also increases your tax liability.
Retirement Planning: Seniors living on a fixed income should explore the Over-65 exemption and tax deferral options to stabilize expenses.
Resale Considerations: Buyers often evaluate the total tax cost before making an offer, making a lower tax bill potentially attractive to future purchasers.
Historical & Future Trends in Austin Property Taxes
Historical Growth: Over the past decade, Austin’s property values have consistently trended upward, especially in high-demand neighborhoods.
Potential Legislative Changes: The Texas Legislature periodically passes property tax reforms aiming to limit year-over-year increases or adjust school funding mechanisms.
Looking Ahead: Local bond measures for transportation, education, and infrastructure could drive future rate changes. Keep up with city council and ISD board meetings for the latest.
Variations by Neighborhood & School District
Not all parts of Austin are taxed equally. School district rates often form the largest chunk of your tax bill, making the school zone a key factor. Here’s a quick look at sample 2025 median home values and estimated annual taxes at a 2.1% rate:
| Neighborhood | Median Home Value | Estimated Annual Tax |
|---|---|---|
| Zilker | $850,000 | $17,850 |
| East Austin | $475,000 | $9,975 |
| Mueller | $650,000 | $13,650 |
| Hyde Park | $700,000 | $14,700 |
Note: These figures can vary based on your exact address, improvements, and applicable exemptions.
Researching Property Taxes When Buying a Home
Use Online Tools: The TCAD Property Search lets you view recent appraisals and historical tax bills.
Check MLS Listings: Real estate listings often include estimated taxes; verify these figures for accuracy.
Consult a Local Realtor: Agents specializing in the Austin market can provide deeper insights on neighborhood-specific tax rates.
Contact Taxing Entities: If you have questions about school or municipal rates, contact the relevant taxing unit directly.
The Bottom Line
It is crucially essential that both new and experienced homebuyers are aware of the intricacies of Austin's property tax system.
Being familiar with the dynamics of how TCAD appraisals work, what exemptions you qualify for, and protesting overvaluations empowers you to minimize your annual tax burden. Being up to date with local elections, school bond elections, and changes in statutes will also allow you to forecast future rate trends.
Proactive planning—such as budgeting for annual increases, researching neighborhoods thoroughly, and scheduling escrow payments—won't catch you off guard or leave you red-faced either.
By using these strategies, you'll manage your property taxes better and have a less stressful homeownership experience.
Ready to Learn More or Take Action?
Contact a Property Tax Consultant for Expert Advice
Frequently Asked Questions
1. When are property taxes due in Austin?
Property taxes are due by January 31 of the following year. For 2025 taxes, payment is due by January 31, 2026.
2. How can I lower my Austin property taxes?
File for exemptions (homestead, Over-65, etc.), protest your appraisal if it’s higher than comparable sales, and consider hiring a property tax consultant for complex cases.
3. What happens if I don’t pay on time?
Penalties and interest accrue starting February 1. Continued non-payment can result in property liens or foreclosure by the county.
4. Are Austin property taxes higher than other Texas cities?
They can be. Austin’s rapid growth and high property values often lead to rates around 2% to 2.3%, while cities like Houston may hover closer to 1.8%, and Dallas can be 2.3% or higher.
5. How do I apply for a homestead exemption?
Complete the Homestead Exemption Form on the TCAD website by May 1. You’ll need proof of residence, such as a Texas driver’s license matching your property address.
6. Can I protest the appraisal if I just bought my home?
Absolutely. If the newly assessed value is higher than your purchase price or comparable sales, you can file a protest. Provide closing documents as evidence.
7. Is there specific tax relief for first-time homebuyers?
Texas does not offer a first-time homebuyer-specific exemption. However, new homeowners occupying their property as a primary residence can claim the homestead exemption.
8. How often does TCAD appraise properties?
TCAD appraises properties annually. You’ll receive a Notice of Appraised Value in spring each year.
9. How do I find my taxing entities?
Enter your address in the TCAD Property Search to see which city, county, ISD, and other entities are taxing your property.
10. Can I pay my taxes monthly?
Yes. Most homeowners pay through an escrow account managed by their mortgage lender. If you own your home outright, you can contact the Travis County Tax Office for other payment plan options.
