Texas ranks 9th highest in US property tax rates, according to new study

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DALLAS - Texas homeowners pay the ninth-highest effective property tax rate in the nation, according to a new analysis of U.S. Census Bureau data, adding to affordability pressures as rising home values continue to drive up tax bills across the state.

Texas property tax 

What we know:

Property tax revenue rose nationwide, by more than $96 billion between 2022 and 2024. 

That increase outpaced gains in sales tax during that period, which increased by just over $21 billion, and outpaced gains in corporate income tax revenue during that period, which increased by $5.3 billion.

Property taxes are calculated as a percentage of a home’s assessed value and are a primary source of funding for communities. The study conducted by Construction Coverage analyzed U.S. Census Bureau data to calculate effective property tax rates by dividing the aggregate annual real estate taxes paid by the aggregate value of housing units.

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Texas rankings vs. national average

Photo credit: Construction Coverage

Texas has an effective property tax rate of 1.245% for owner-occupied homes. That is significantly higher than the national effective rate of 0.888%. Property tax rates vary widely by state. Illinois has the highest effective rate at 1.793%, followed by New Jersey at 1.675%. While Southern states generally post lower rates, Texas stands out as an exception, ranking ninth overall.

Comparing tax bills and home values in Texas

By the numbers:

Here is a closer look at how Texas compares to the nation:

• The median property tax bill in Texas is $4,108, compared with the national median of $3,211.
• The median owner-occupied home value in Texas is $313,200, lower than the national median of $360,600.
• The median household income for Texas homeowners is $101,734, slightly above the national median of $100,721.

Property Tax Assessment lag

What they're saying:

Homeowners might expect recent surges in home values to directly translate to higher property tax bills. The reality is, despite home prices increasing in recent years, the national effective property tax rate has declined over the past decade. Falling to 0.888% in 2024 from a peak of 1.147% in 2012, researchers attribute those rates to assessment systems that often lag behind market value changes.

"This trend reflects the inherent lag in property tax systems, where assessments are typically updated periodically or when homes change ownership. The mismatch between rising property values and effective tax rates creates disparities in how tax burdens are distributed. Long-term homeowners often benefit from lower effective rates, while new buyers purchasing homes at higher market values may face disproportionately larger tax bills," the report read.