Dallas-Fort Worth-Arlington Has The Highest Effective Property Tax Rate in Texas

North Texas residents who purchased a home in the past few years have likely experienced a fair amount of sticker shock when it comes to their property tax bill. As home prices have increased in response to record demand and low inventory, so have property taxes.

In a study produced by ConstructionCoverage.com, data shows that among the four largest MSAs in Texas, Dallas-Fort Worth-Arlington has the highest effective property tax rate for owner-occupied residences. According to the study, the North Texas area ranks No. 6 in the nation’s largest MSAs with a 1.6 percent effective property tax rate for owner-occupied homes and a median property tax bill of $5,106.

Houston-The Woodlands-Sugarland placed No. 7 in the list with a 1.6 percent property tax rate and a median tax bill of $4,381. At No. 10, San Antonio-New Braunfels had a 1.5 percent property tax rate and a median tax bill of $3,941. Coming it at No. 13 is the Austin-Round Rock MSA with an effective property tax rate of 1.4 percent and a median property tax payment of $6,397.

Fighting Skyrocking Property Tax Rates in Austin

With rates this high, it’s no wonder that the Texas Legislature has taken up the mantle of property tax relief during this legislative session. However, that effort isn’t without its own pitfalls, says PropertyTax.io founder Glenn Goodrich.

“This is exactly why the governor, lieutenant governor, and Texas House, and Senate are putting property tax legislation front and center right now while they are in secession,” Goodrich said. “The biggest land mine is House Bill 2. While it appears to have good intentions by lowering appraisal limits to 5 percent, it will actually increase tax bills for homeowners. I have not seen a single economist that has come out in support of HB2 for this very reason.”

House Bill 2, authored by State Rep. Morgan Meyer (R-Dallas), would drop the annual cap on appraisal increases from 10 percent to 5 percent. The cap on increases would apply to all properties in the state — not just homesteads. Texas House Speaker Dade Phelan told attendees of a convention hosted by the Texas Public Policy Foundation that this proposal would help an owner of a $350,000 home save $461 on their upcoming tax bill and $590 the following year. 

However, Lieutenant Governor Dan Patrick disagrees with the bill’s methods and is pushing to provide meaningful tax relief for Texas homeowners through a different avenue.

“The Senate appears to have a better pathway for tax relief by increasing the homestead exemption for ISDs from $40,000 to $70,000,” Goodrich said, “and also increasing the taxable value exemption on business personal property that will benefit small business owners.”

Fighting High Property Taxes at Home

That doesn’t mean that the fight against high property tax bills only happens in Austin, Goodrich pointed out.

“While the Texas Legislature is concentrating on reducing taxable value, property owners should always do their part and make sure the appraisal district has them valued fairly,” he said. “If you don’t think you are valued fairly, it’s up to you to protest the value or hire a firm to do it for you.”