Texas Property Tax: How It Works and How to Protest Your Appraisal (2026 Guide)
Texas property taxes are among the highest in the country. This guide explains how appraisals work, what homestead exemption saves you, and exactly how to protest your assessment to lower your bill.
Texas has no income tax - but your property tax bill will remind you of that every January. Here's how to keep it as low as legally possible.
Texas homeowners pay some of the highest property tax rates in the country, typically running 2.0–2.6% of the assessed value depending on where you live. On a $500,000 home, that's $10,000–$13,000 per year - $833–$1,083 per month sitting in your escrow account.
The good news: Texas law gives homeowners significant tools to fight their appraisals, and thousands of Collin and Dallas County homeowners successfully lower their assessments every year. This guide explains exactly how the system works and how to use it.
How Texas Property Taxes Work
Your property tax bill is a product of two numbers: your appraised value and your tax rate. Each is determined separately:
- Appraised value: Set each January by your county's Central Appraisal District (CAD). In Collin County, this is the Collin Central Appraisal District (CCAD). In Dallas County, it's the Dallas Central Appraisal District (DCAD).
- Tax rate: Set by local taxing entities - your city, your school district, your county, and any special districts (MUD, hospital, college). Each entity sets its own rate; they stack together to create your total rate.
Your tax bill = (Appraised value − exemptions) × combined tax rate.
Example: A $550,000 home in Plano with a homestead exemption might be taxed on $535,000 at a combined rate of 2.2%, yielding an annual bill of approximately $11,770.
Tax Rates by City: What You're Actually Paying
| City | County | Approx. Combined Rate | Annual Tax on $500K Home |
|---|---|---|---|
| Plano | Collin | ~2.05–2.2% | ~$10,250–$11,000 |
| Frisco | Collin/Denton | ~2.2–2.5% | ~$11,000–$12,500 |
| McKinney | Collin | ~2.1–2.35% | ~$10,500–$11,750 |
| Allen | Collin | ~2.1–2.3% | ~$10,500–$11,500 |
| Prosper | Collin/Denton | ~2.3–2.55% | ~$11,500–$12,750 |
| Garland/Rowlett | Dallas | ~2.35–2.6% | ~$11,750–$13,000 |
Rates change annually. MUD (Municipal Utility District) districts add 0.3–0.7% on top of base rates in many new construction communities. Always verify your specific address's rates before buying.
Step 1: File Your Homestead Exemption (Do This First)
If you own and occupy your home as your primary residence, you qualify for the Texas homestead exemption. This is free money - but you have to apply for it. It doesn't happen automatically.
- What it does: Reduces your taxable assessed value by at least $100,000 for school district taxes (2023 legislation), plus a percentage exemption from your city and county. Combined, this saves most homeowners $1,200–$2,500/year.
- When to apply: Any time after January 1 of the year you qualify. You can now apply up to two years retroactively.
- How to apply: Download Form 50-114 from your county appraisal district website (CCAD.net for Collin County; DCAD.org for Dallas County). Submit with a copy of your driver's license showing the property address.
- Annual cap: With a homestead exemption, your appraised value can only increase 10% per year for tax purposes regardless of market value - a major protection in rising markets.
The homestead exemption application deadline is April 30 for the current tax year. File it the moment you close - don't wait.
Step 2: Review Your Appraisal Notice (Arrives April–May)
Each spring, the appraisal district mails a Notice of Appraised Value. This is the number they're using to calculate your tax bill. Review it carefully:
- Is the description of your property correct? (Square footage, bedroom count, lot size)
- Does the appraised value seem significantly higher than your home's actual market value?
- Has it jumped dramatically from last year?
If the answer to any of these is yes, you have grounds to protest. The protest deadline is typically May 15 or 30 days from the date on the notice, whichever is later.
Step 3: How to Protest Your Appraisal
Texas property owners have the right to protest their appraisal every year. Most protests are settled through an informal hearing - you don't need a lawyer.
Method 1: Online or Mail Protest
File Form 50-132 (Notice of Protest) by the deadline. Both CCAD and DCAD have online filing options. This is the easiest path for most homeowners.
Method 2: Informal Hearing
After filing, you'll be scheduled for a short meeting with an appraisal district reviewer. Bring your evidence - recent comparable sales, your purchase price if you bought within the last 18 months, any inspection reports noting condition issues. Many protests settle here with a reduction.
Method 3: Appraisal Review Board (ARB) Hearing
If you don't get a satisfactory result informally, request an ARB hearing - a panel of independent citizens who hear your case. More formal, but homeowners win reductions regularly. Bring comparables, photos, and any documentation of condition issues.
Method 4: Property Tax Protest Service
Several companies (O'Connor & Associates is the largest in Texas) handle protests on a contingency basis - you pay nothing unless they reduce your appraisal, then they take a percentage of the savings. Worth considering if you don't want to handle it yourself.
What Evidence Works in a Protest
- Comparable sales: Recent closed sales of similar homes in your neighborhood that sold for less than your appraised value. Pull these from Zillow, Realtor.com, or request them from your real estate agent.
- Your purchase price: If you bought your home recently and paid less than the appraised value, that's compelling evidence - especially within 12–18 months of purchase.
- Condition documentation: Photos of needed repairs, inspection reports noting significant deferred maintenance, foundation issues, roof condition - all reduce market value and support a lower appraisal.
- Property description errors: If the appraisal district has the wrong square footage, wrong bedroom count, or incorrect lot size - correcting these facts can reduce your bill.
Other Exemptions Worth Knowing
- Over-65 exemption: Additional school district exemption + frozen school district taxes for homeowners 65+. Significant savings.
- Disability exemption: Similar benefits to the over-65 exemption for qualifying disabled homeowners.
- Veteran exemptions: 100% disabled veterans may qualify for full property tax exemption on their primary residence.
- Agricultural exemption (ag exemption): For qualifying agricultural use - relevant for buyers purchasing rural properties in Collin or Denton counties.
All exemption forms are available at your county's appraisal district website. File early - most have deadlines of April 30 or May 1.
New Buyers: Your First Year Action List
- File your homestead exemption within the first few weeks of closing.
- Set a calendar reminder for April 30 each year to check your Notice of Appraised Value.
- Review the appraisal against recent comparables before the protest deadline.
- File a protest every year - even if you only get a small reduction, the process costs nothing and compounds over time.
Property taxes are the ongoing cost that most buyers underestimate when they're focused on getting their offer accepted. I walk every buyer I work with through the tax picture for their specific address before closing - because surprises at year-end tax season shouldn't be surprises.