Buying a home in Austin, TX, is a major milestone in life, but understanding how property taxes work is just as important as finding the right home or negotiating the purchase price. Texas doesn’t have a state income tax, which means that property taxes are a major source of revenue for local governments.
For home buyers in Austin and throughout the state, this directly impacts your budget, mortgage, and long-term costs of homeownership. Knowing how the property tax system works in Travis County and the surrounding areas can help you make more informed financial decisions — and avoid surprises after closing. This guide will break down everything you need to know.
How Property Taxes Work in Austin
Property taxes in Austin are based on the appraised value of your property as determined by the Travis Central Appraisal District (TCAD). Every year, TCAD evaluates your home and assigns it a value that reflects what it would likely sell for in the current market.
That appraised value is then multiplied by the combined tax rate of the local entities that receive property tax revenue, like the city, county, school district, and other special districts.
Key Points:
That appraised value is then multiplied by the combined tax rate of the local entities that receive property tax revenue, like the city, county, school district, and other special districts.
Key Points:
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Property taxes are due annually, typically by January 31 of the following year.
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You’ll receive a Notice of Appraised Value each spring.
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Tax rates vary by location, depending on which taxing authorities your property falls under. In Austin, the average total property tax rate generally ranges between 1.8% and 2.4% of your home’s appraised value.
Understanding the Appraisal Process
Each spring, TCAD updates appraised values based on market data, property characteristics, and comparable home sales. This is a mass appraisal system, which means that every property is assessed using standardized models and data rather than individual on-site inspections.
Appraisals include both land value and improvement value (the structures on the land). These two figures combined determine your total assessed value.
Key Takeaways:
Appraisals include both land value and improvement value (the structures on the land). These two figures combined determine your total assessed value.
Key Takeaways:
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The appraisal date is January 1 of each year.
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Appraised values can increase or decrease based on market trends.
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Homeowners can protest appraised values if they believe they’re too high.
If you receive your notice and feel that the appraised value exceeds what your home is worth, you can file a protest with TCAD.
How to Estimate Property Taxes Before Buying
Before you make an offer on a home in Austin, you should have a clear idea of what your property tax bill will look like. Since Austin’s property taxes are based on both appraised value and local tax rates, estimating this amount gives you a better sense of your total monthly housing cost.
Steps to Estimate:
Steps to Estimate:
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Check the property’s last appraised value on the TCAD website.
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Confirm the current tax rates for the relevant jurisdictions.
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Consider exemptions if you qualify.
Pro Tip:
Many mortgage lenders collect property taxes through an escrow account, which spreads payments evenly throughout the year.
Many mortgage lenders collect property taxes through an escrow account, which spreads payments evenly throughout the year.
What to Know About Escrow and Mortgage Impacts
Property taxes often get rolled into your monthly mortgage payment through escrow. Your lender holds a portion of your payment each month and then pays your taxes when they’re due. This setup ensures that your taxes are paid on time, but it can also affect your monthly budget when property values increase.
Important Notes:
Important Notes:
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If your appraised value rises, your lender may increase your escrow payments.
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Annual escrow analyses help keep your account balanced.
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You can review your escrow statements each year to verify accuracy.
Understanding how taxes affect your monthly payment helps you plan ahead and avoid unexpected adjustments.
How to Protest Your Appraised Value
If you believe that TCAD may have overvalued your property, you have the right to protest. Many homeowners in Austin take advantage of this process as needed.
How to File a Protest:
How to Protest Your Appraised Value
If you believe that TCAD may have overvalued your property, you have the right to protest. Many homeowners in Austin take advantage of this process as needed.
How to File a Protest:
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File online or in person by May 15 (or within 30 days of the date your Notice of Appraised Value was mailed).
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Provide supporting evidence like comparable sales, photos, or an independent appraisal.
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You’ll have an informal review, followed by a formal hearing if necessary.
Successful protests can lower your appraised value and reduce your property tax bill for that year.
FAQs and Key Takeaways
How are property taxes calculated in Austin?
Property taxes are based on your home’s appraised value multiplied by the total tax rate from your city, county, and school district.
When are property taxes due?
By January 31 of the year after they’re assessed.
What exemptions can reduce my property taxes?
Common ones include the Homestead, Over-65, Disability, and Veteran exemptions.
Can I protest my property value?
Yes. You can file a protest with TCAD each year, typically by May 15.
Are You Ready to Start Your Austin Home Journey?
Understanding Austin’s property tax system helps you make smarter financial decisions as a savvy, well-prepared home buyer. By reviewing appraised values and planning for annual changes, you can manage your costs effectively and avoid surprises.
If you’re preparing to buy a home in Austin, our team can help you navigate every step, from evaluating potential properties to estimating total ownership costs. Connect with our experienced real estate professionals today to receive personalized guidance tailored to your goals.
Get clarity and confidence before you buy; our team at the Kathryn Scarborough Real Estate Group is here to help you master Austin’s real estate landscape. Connect today.
*Header by the Kathryn Scarborough Real Estate Group
If you’re preparing to buy a home in Austin, our team can help you navigate every step, from evaluating potential properties to estimating total ownership costs. Connect with our experienced real estate professionals today to receive personalized guidance tailored to your goals.
Get clarity and confidence before you buy; our team at the Kathryn Scarborough Real Estate Group is here to help you master Austin’s real estate landscape. Connect today.
*Header by the Kathryn Scarborough Real Estate Group
