How Expensive Are Texas Property Taxes Compared to Other States?
Texas has some of the highest property taxes in the country, making them a major part of homeownership costs. Property tax rates have a direct impact on local prices, affecting mortgage payments and the general cost of living. Because Texas has no state income tax, local governments rely heavily on property taxes to fund local services like schools, roads, and emergency responders. While this allows Texas to be income tax-free, it also means homeowners need to stay informed about rising property taxes, like this one in Harris County, to budget appropriately.
Texas Property Tax Rates vs. National Averages
Texas has no state property tax, but local governments such as counties, school districts, and large cities set their rates, which can largely impact homeowners by these numbers adding up quickly. Typically, Texas property tax rates are around 1.60% higher than the national average of 0.99%. This makes Texas rank the 6th highest in the U.S. for property tax burden.
For example, if you were to own a $300,000 home in Texas, your annual property tax would be around $4,800. Compared to Colorado, where the tax rate is about 0.55%, homeowners would pay $1,650 for a home with the exact value.
Why Are Texas Property Taxes So High
As mentioned earlier, Texas is one of only eight states that chooses not to have a state income tax. While this offers relief to workers across the state, that burden is placed on homeowners instead. Property taxes are the main source of funding for schools, buildings, and emergency services in Texas.
Another factor is appraisal values. Even if your tax rate does not change, your bill can still go up if your home’s value increases. In a consistently growing housing market, homeowners will see their tax bills rise in tandem with their home values. Additionally, each county sets its own mill rate, so counties like Harris County, which are affected often by natural disasters raise their tax rates in response to the clean-up costs.
How Texas Compares to Other High- and Low-Tax States
Property taxes are different across the U.S., although Texas is among the highest states with an average rate of 1.6%. States such as Illinois at 2.2% and New Jersey at 2.55% have even higher property taxes due to a lack of state income or significant public spending. In comparison, many states have much lower property tax rates like Hawaii, Alabama, and Colorado at 0.29%, 0.40%, and 0.55% because they do not have to rely so heavily on property taxes for funding.
Overall while property taxes in Texas remain high, residents see lower taxes in many other areas. For example, if we look at individual taxpayers, Texas comes in at the sixth lowest in the country.
If Your Property Taxes Are a Burden, Johnson & Starr Can Help
Where you live, home value and school district taxes play a major role in how much homeowners owe each year. If you feel overwhelmed by your tax bill, Johnson & Starr can help you find ways to manage and reduce your costs. If you are concerned about your Texas property taxes, contact Johnson and Starr today and explore your options.