How Does Property Tax Collection Work in Texas?
When it comes to the rates of property taxes by state, Texas nears the top of the list. Texas property taxes are among some of the highest in the U.S, at an average of 2.18% of the estimated value of your home or property. If you’re new to the state or you’re a new property owner, you’ll need to understand the basics of this system. Here is a quick guide from AFIC, one of the leading property tax loan companies in Texas.
A Brief Background of Property Taxes in Texas
The high property taxes in the Lone Star State are needed to compensate for the fact that there is no individual income tax in Texas. Texas is one of the nine states in the U.S. that does not impose income tax on its citizens, which is something most residents really enjoy. However, as a result, the counties need to get their funding for public services like schools, libraries, parks, roads, and emergency services from another source, which is where property taxes come in.
Property taxes in Texas are set at a local government level, as there are no state property taxes, so they’ll vary from county to county. For example, in Dallas County, the average property tax rate is 2.74%, amounting to approximately $6,850 on a $250,000 home (before any available exemptions). In San Antonio, where the average rate is 2.66%, the same home would cost around $6,650 in property taxes. Meanwhile, in Terrell County, with a lower average rate of 2.24%, property taxes on a $250,000 home would be about $5,600.
Understanding the Property Tax System in Texas
There are three basic steps to collecting property taxes in Texas:
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Step One: Appraised values for properties in each district are set by that district’s Chief Appraiser on January 1 of each year. A lien attaches to each taxable property to ensure payment.
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Step Two: Property owners may dispute the appraised value of their property through the appraisal review process and/or board. You should receive your property valuation for property taxes between April and May of the current year, and disputes are usually heard between May and June of the current year.
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Step Three: Actual tax rates are set in accordance with annual tax budgets by each local government between August and September. Property tax bills are then sent out in October, and collection by local government agencies can begin. These taxes must be collected by January 31 of next year, as penalties will start being imposed from February 1.
How Truth in Taxation Helps Texas Homeowners Avoid Sudden Tax Increases
The Truth in Taxation provisions outlined in the Texas Property Tax Code are designed to protect local citizens from unchecked increases in the amount of property taxes they are required to pay. These laws require taxing units such as counties, school districts, junior colleges, and special districts to be transparent when they propose raising tax rates beyond what’s needed to collect the same revenue as the previous year, also known as the no-new-revenue tax rate (formerly called the effective tax rate).
What Truth in Taxation Requires
Before adopting a higher tax rate, taxing units must:
- Calculate the no-new-revenue tax rate
- Publish notice of proposed rate changes in a clear and timely manner
- Hold public hearings to explain the rate increase and allow public input
- Vote in a public meeting before the rate is adopted
This process ensures property owners understand how tax rate changes could affect their bill, especially if rising property values push total collection higher.
While local appraisal districts determine the fair market value of properties within their jurisdiction, the tax assessor-collector is responsible for applying the adopted rate and generating the final bill. These two entities must work transparently and remain accountable to the public throughout the tax-setting process.
Truth in Taxation protections are especially relevant in areas like Bexar County, Harris County, and Tarrant County, where rising home values can lead to concerns about affordability and unexpected tax increases.
For clarification on how your local district or tax assessor-collector applies Truth in Taxation, visit your county’s website or consult the Texas Comptroller’s official Truth in Taxation guide. Staying informed helps you monitor proposed rate increases and speak up before they’re finalized.
Texas Property Tax Penalties: Costs, Consequences, and Solutions
You have from October (when you receive your bill) to January 31 of the following year to pay your property taxes for the previous year. Planning for this expense is crucial, as penalties for non-payment can be severe, reaching approximately 48% of the original tax bill within a year. If taxes remain unpaid, the local government may initiate foreclosure proceedings or take legal action. In such cases, it’s essential to understand what to do during a property tax collection lawsuit in Texas to protect your rights and avoid losing your home.
However, if you are unable to pay your property tax bill and want to avoid penalties, there are affordable solutions designed to assist you in making this payment and preventing foreclosure on your home.
Get Help Paying Property Taxes in Texas
Even if you have the best intentions, circumstances can crop up in anyone’s life that make paying property taxes a challenge. Reputable property tax loan companies like American Finance & Investment Company, Inc. (AFIC) understand the cash flow challenges that home and business owners face and can step in and give you a loan to pay property taxes – no credit check or deposit required. This means fast, effective tax relief that allows you to keep your home or business.
If foreclosure occurs, you may still have options to reclaim your property—learn more about getting your property back after a tax foreclosure sale and the steps involved in the redemption process. Our compassionate, skilled team will quickly settle your Texas property tax bill and structure your loan repayments to be as affordable as possible.
About AFIC
AFIC’s property tax loans can provide fast, affordable relief from the often unmanageable demands of county and city tax offices throughout the state. You can receive an instant quote by completing the form on our homepage. For qualifying properties, we can help you pay off your delinquent taxes and offer you the following benefits:
- Quick and completely online process
- No money down
- No credit check
- Free 30-day rate match
- Match competitors and beat their rate by 1%
- Avoid high penalties and foreclosure
We pride ourselves on finding solutions to suit the unique needs of our clients. If you would like to discuss our property tax loans, please contact our experienced team at AFIC today.
