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Texas Property Taxes why are they so HIGH!

I am often asked why property taxes in Texas are so high? The simple answer is because Texas does not have a state income tax and thus our schools, social services, roads, and infrastructure are supported by a property tax.

Although they may seem high, our overall tax burden in Texas is much lower than the national average, especially if you compare it to the 41 states that impose a state income tax.

The three main components of our property tax structure are the county tax, school district tax, and the MUD (Municipal Utility District) tax. MUDs are political entities that provide the water, sewage, and drainage services for a community. Unless the City of Houston is providing you with these services, you will more than likely be receiving them from a MUD.

The combined property tax rate has a range from $2.1 to $3.68 per every $100 of assessed value. The school district and the MUD tax combined represent anywhere from 50% to 80% of the entire tax rate. The MUD tax can range from $0.00 to $1.40. The main factor that causes such a difference in the range of our property tax rates is the MUD.

Typically you will find higher property tax rates in newer subdivisions, because the MUD tax is higher. The MUD’s rate is higher in newer subdivisions since they have to install the infrastructure to support the subdivision. Over time the homeowners pay the MUD for the infrastructure and the MUD tax will decrease. In some of our older subdivisions with homes built in the early 70s have a zero MUD tax.

You may also be eligible for a general homestead exemption. The homestead exemption removes part of the assessed value of the property from taxation. For instance, the general homestead exemption removes 20% of the assessed value of your home from taxation on the Harris County tax. The majority of MUDs do not provide a general homestead exemption. All school districts in the State of Texas are required to provide a minimum of a $15,000 reduction in the assessed value of the property for a general homestead exemption. Some school districts provide an even greater reduction in the assessed value of the property for a homestead exemption.

Qualifying and receiving a general homestead exemption is an easy process but there are certain time frames that must be followed in order for you to receive it.

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If you have additional questions about the homestead exemption or local property taxes, give us a call at 281.300.3141 or 281.804.8626 and we would be happy to help you.

  1. rod

    I’ve lived in Houston for about 10 years, and I am disgusted by the high property taxes. It’s essentially a tax on the wealthy, ie: the successful.

    True, there is no state tax, but think about retirement: you would have to spend 2.5-3% a year JUST TO OWN YOUR HOUSE!!! It’s a perpetual mortgage which pays the city’s overpaid workers, and that includes the police, firefighters, teachers and all of the ‘social system’ leeches.

    I’m sure this won’t be popular, but it’s the truth! :)

  2. Sara

    That is bull feathers! Fl does not have a income tax and many other states don’t have a high property tax. Maybe those boys down there in the ten gallon hats are stealing. SARA form Fl NOt Gary

  3. Joseph S

    The answer to the question: Why are Texas real estate taxes are so high – because there are no State income taxes is so incredibly simple-minded it is hard to believe intelligent Folk are repeating it!!!

    Texas as it seems to me is keeping away retirees! Many States do NOT tax annuities – therefore IF you moved there you would step into lower than where you came from – If you want to own a home that is. Yet I am sure you would pay a higher rent as the owner of the property has to get the money for the property taxes from somewhere – that is YOU!

    Why this scenario seems to be avoided is very suspicious to me. What does Texas expect for a person whom already put in 35 to 40 years of his life doing the 9-5 to go back to work till his last breath?!
    If I sold my home (which I own/have no bills) moved to Texas – purchased a home CASH – the local government would be carrying me out of my home in the [near] future. Yes, I know I heard about the tax breaks but they are not really tax breaks as you raise the property taxes by 10% yearly!
    Lately teenagers listening to the plight of the Elders have been asking if foreigners from DICTATORSHIPS hold the Government positions ! I do not know how to answer – since I tend to agree that some rules of life created by whoever you are sound cruel, heartless and outright mean.

What is your opinion?