Texas History Blog

A Brief History of the Texas Property Tax

Property tax is the annual amount paid by property owners based on the value of their residential property or business. In Texas, the property tax is used locally to help pay for schools, streets, roads, police, fire protection, and many other services. Since Texas uses these property taxes to fund local communities, the state itself does not receive any revenue from these taxes, but it wasn’t always this way. Keep reading to learn more about the history of property taxes in Texas. 

A History of Property Tax in Texas

When Texas joined the United States in 1846, revenue from property taxes supported both local governments as well as the state. As the population boomed, the property tax system became extremely hard to manage, which left some parts of the state and local governments struggling, particularly during the Reconstruction era. 

Shortly after the Civil War, it was found that nearly a third of the counties in Texas did not even have a tax assessor-collector, which made the property tax management even more of a struggle. According to the Texas Comptroller, “reports from the period cited widespread underreporting of property values; the 1880 U.S. Census estimated the value of all taxable property in Texas at $725 million, more than twice the total on the state’s tax rolls.”

At the end of the 19th century, Texas lawmakers made progress in improving the tax system with new policies and tax collection procedures. However, much of this progress was halted due to The Great Depression. This caused many problems in the property tax system, from the rise in delinquencies to the increasing problem of property undervaluation.

Throughout the early 20th century, lawmakers created many laws which distributed portions of the state’s general revenue from property tax collections to the local Texas governments.

Between the 1950s-80s, Texas repealed more elements of the state property tax including the state-wide school tax and in 1982 the state abolished all forms of state property tax, leaving the local governments with the responsibility to collect taxes. In 1979, the Peveto bill passed which created a new system of county central appraisal districts to handle the assessment and collection of property taxes, which is a system that is still in place today.

How Texas Property Tax Works Today 

Today, Texas property taxes are collected on residential and commercial properties to help fund cities, counties, school districts, and special districts. All properties, including land, are assigned a fair market value as decided by the Texas Property Tax Code. Qualified Texans can then apply for a property tax exemption, most used by seniors or disabled citizens, disabled veterans, and homestead owners.

Since property tax is not an exact science, property owners have the right to appeal their appraisal value. After their appeal is reviewed, they will receive notice if the appeal has been approved or rejected.

If you do not pay your property taxes by January 31st, you will be considered delinquent and start facing late fees and penalties. Your property taxes are due each year by January 31st. If you can’t pay your property taxes in full, you can request the option to pay split payments, however, that request must be made before June 30th each year.

How We Can Help

If you’re having difficulty paying your property tax bill this year, we can help. Johnson & Starr proudly serves Texas and Texans by providing flexible property tax loans so you can have peace of mind. Contact us today to learn more about our Texas Property Tax Loans.