Why Are Texas Property Tax So High?
If you’ve spent any time in Texas real estate conversations over the past few years, you’ve probably heard the same sentiment: “Property taxes are out of control, why don’t we just eliminate them?”
It’s an understandable reaction. Texas homeowners have seen their property tax bills climb dramatically, sometimes year over year, with little explanation beyond “market value increases.” For new homeowners in particular, the experience can feel like financial whiplash. Understanding why Texas property taxes are so high and what your real options are, is the first step toward managing them.
We work with Texas homeowners every day at Resolute and we see both sides of this issue. The frustration is real and justified in many cases. But the growing push for complete property tax repeal, while emotionally appealing, carries consequences that deserve careful attention.
The reality behind property tax repeal
The idea of eliminating property taxes in Texas isn’t new, but it’s often discussed without fully acknowledging what would have to replace that revenue.
A widely cited 2013 analysis from the Texas Real Estate Research Center at Texas A&M University, authored by economist Dr. Charles Gilliland along with David Adame and Michael Oberrender, examined the concept of replacing property taxes with an expanded sales tax system. Their findings challenge the assumption that such a shift would be simple or beneficial.
The core issue is straightforward: property taxes currently fund a significant portion of local government operations, including schools, counties and municipalities. Removing that revenue source doesn’t eliminate the need, it forces the state to replace it elsewhere.
That “elsewhere” typically comes down to two options:
- A state income tax, which in Texas would require a constitutional amendment and voter approval
- Or a dramatic expansion of the sales tax system
The second option is where the conversation becomes more concrete and more concerning.
In a 2012 policy report titled “A ‘Big Idea’ That’s a Bad Idea for Texas,” longtime Texas tax policy expert Billy Hamilton analyzed what it would actually take to replace property tax revenue with sales tax. His conclusion was stark: based on state estimates at the time, sales tax rates could need to approach or even reach roughly 25% to fully replace property tax revenue while maintaining current funding levels.
Even before reaching that level, significant complications emerge. To avoid extremely high rates, the sales tax base would likely need to expand into areas that are currently exempt, such as groceries, medicine and essential services. That introduces a different kind of burden, one that impacts everyday consumption rather than property ownership.
There are also broader structural concerns. Property taxes are locally assessed and controlled, giving communities a degree of direct influence over how their tax dollars are used. Replacing that system with a centralized consumption tax would shift much of that control to the state level, something Hamilton specifically warned could undermine local governance and funding stability.
Property taxes, while highly visible and often unpopular, tend to be relatively stable year to year. Sales taxes are tied directly to economic activity and can fluctuate significantly with market conditions. That volatility introduces risk not just for governments, but for the services homeowners rely on.
None of this is to suggest that homeowners’ frustrations are misplaced. Rising property values and property tax bills are very real concerns. But when the conversation shifts to full repeal, it’s important to recognize that the alternatives aren’t simple and in many cases may create new challenges that are even harder to manage.
Why Texas homeowners feel the pain
While the policy conversation is complex, the emotional response is simple: people are seeing big increases in their property tax bills.
And in many cases, the shock isn’t just about rising values, it’s about when and how those increases hit.
The new purchase problem
One of the most common situations we see involves homeowners who recently purchased a home, especially from a long-term owner with exemptions.
Here’s a typical example:
- A home was previously appraised at $350,000
- The seller had over-65 and homestead exemptions, significantly reducing their taxable value
- Their annual tax bill may have been discounted by as much as 65%, resulting in a relatively low payment
Now fast forward:
- A new buyer purchases the same home for $500,000
- The appraisal district eventually resets the value closer to market
- The new homeowner has no exemption their first tax year of ownership
At a 2.2% tax rate, the difference is dramatic:
- Previous owner’s estimated tax bill (after exemptions): roughly $2,700 to $3,000
- New homeowner’s tax bill: approximately $11,000
That’s not a small increase, it’s a multiple. We regularly speak with homeowners who are caught completely off guard by this shift. And unfortunately, many of them were never properly warned.
A communication gap in the home buying process
This is where the industry needs to take some responsibility. Realtors, mortgage lenders and title companies play a critical role in helping buyers understand the true cost of homeownership. Yet too often, the discussion around property taxes is based on the current tax bill, not the future one.
When buyers base affordability on outdated tax figures, the result is predictable: sticker shock, frustration and a growing sense that the system is broken. Better education upfront wouldn’t eliminate higher taxes, but it would reduce the surprise.
When policy meets politics: the risk of appraisal freezes
In recent years, another trend has added fuel to the fire: the rise of appraisal freeze proposals at the county level, particularly in Tarrant County.
On paper, freezing property values sounds like a win for homeowners. If values aren’t increasing, tax bills shouldn’t increase either, right?
The reality is more complicated.
In Tarrant County, citizen-appointed appraisal board members, many of whom campaigned on promises to “stop rising appraisals”, have pushed for policies that effectively froze residential values for multiple years. This has occurred despite concerns raised by appraisal professionals, the chief appraiser and multiple taxing entities.
The catch-up problem
In a normal market, property values rise over time. When appraisal values are artificially held flat in a growing market, the gap between market value and appraised value widens. That gap doesn’t disappear, it accumulates. And eventually, it has to be reconciled.
Texas recently introduced a 20% Circuit Breaker limitation for certain properties. While this provides temporary relief, it doesn’t eliminate the underlying valuation gap, it simply delays it. When that limitation falls away, appraisal districts are left with little choice but to catch up.
In Tarrant County, some properties could see substantial increases in 2027 as a result of this dynamic.
“I wouldn’t be surprised to see some home value notices increase 80% in Tarrant County in 2027 after the two-year residential value freeze ends and the state-implemented Circuit Breaker falls off.”, Chase Koska, COO of Resolute Property Tax Solutions
Policy vs. political theater
Many of these appraisal freeze initiatives were driven by campaign messaging that resonated with frustrated homeowners. But governing is different from campaigning. Once in office, board members must operate within legal and economic realities, not just public sentiment. Freezing values in a rising market may feel like short-term relief, but it creates long-term volatility.
The messaging resonates, but the details frequently fall short, creating a cycle where short-term political wins lead to long-term instability for the very taxpayers those proposals were meant to help.
What property tax repeal would mean for Texas homeowners
All of this brings us back to the original question: why not just eliminate property taxes?
The answer isn’t that property taxes are perfect, they’re not. The concerns driving the repeal movement are valid:
- Rapid increases in home values
- Lack of transparency in how property values are assessed
- Poor communication during home purchases
- Policy decisions that create long-term instability
But removing property taxes entirely introduces a new set of challenges:
- A likely shift toward higher sales taxes, disproportionately impacting lower-income households
- The potential for a state income tax, requiring significant political and voter approval hurdles
- Reduced local control over funding for schools, infrastructure and public services
The system can be improved, but replacing it entirely comes with trade-offs that are often overlooked in the political conversation.
A more practical path forward
Rather than focusing solely on repeal, a more productive conversation centers on improving the system we have. That includes better transparency in how property values are determined, more consistent communication during real estate transactions and thoughtful policy decisions that avoid creating artificial volatility.
And for individual homeowners, it means understanding that while Texas property taxes are part of the equation, they are also contestable.
Knowing how to protest property taxes in Texas is one of the most direct tools available to homeowners. The Texas property tax protest process allows any homeowner to challenge their assessed value each year and in many cases, a successful protest reduces not just this year’s bill but serves as a lower baseline going forward.
Taking action on your Texas property taxes
At the end of the day, most homeowners aren’t looking to debate tax policy, they’re trying to manage their financial reality.
If your property value has increased significantly, or if you’re experiencing sticker shock after a recent purchase, it’s worth taking a closer look at your assessment. In many cases, there are legitimate grounds to challenge a valuation and ensure it reflects accurate market conditions.
Resolute works with homeowners across Texas, including Dallas, Houston, Austin, San Antonio, Fort Worth and surrounding counties, to navigate the Texas property tax protest process. Our team of former appraisal district agents brings clarity to what can otherwise feel like a confusing and frustrating system. We only charge a fee when we successfully reduce your taxes.
The Texas property tax protest deadline is May 15. If you haven’t filed yet,sign up with Resolute in minutes before the deadline passes.
Because while Texas property taxes may not be going away anytime soon, understanding them and responding strategically, can make a meaningful difference.
