Understanding Property Appraisals
If you purchased a property with financing, your lender ordered a third-party appraisal to determine the home's value. A lender will only loan on the appraised value given by that independent appraisal company. Most likely the appraisal and the sales price are the same value. Texas is a non-disclosure state, which means no one knows how much you paid for your home except you, the lender, and your Realtor.
The county appraisal district performs its own appraisal, which is what your property taxes are based on. In the Austin metro area, that's the Travis Central Appraisal District (TCAD), the Hays Central Appraisal District (Hays CAD), or the Williamson Central Appraisal District (WCAD), depending on where your property is located. Let's say you purchased a home for $400,000 but the county valued it at $360,000, or perhaps at $420,000, because they don't know what you actually paid. You want the county to appraise your home for the lowest value possible because that makes your tax payment lower. The higher the appraised value, the higher your taxes. The county's appraised value can be viewed publicly on your appraisal district's website and should not be used as an accurate measure of your property's true market value. Remember: value is what someone will pay for it. So if the county values your home for less than what you paid, that's actually a good thing for your tax bill.
Understanding Property Taxes
Texas law sets a 10% cap on the annual increase to the appraised value of your primary residence (with a homestead exemption in place). Your appraisal district assigns two values to your property: a Market Value (what they think you could sell your home for) and an Assessed Value (the value your property taxes are actually based on, reflecting the homestead cap). Both can be seen on your appraisal district's website and in your annual Notice of Appraised Value from the county.
There is no cap on how much they can increase the market value of an investment property. If you're an investor, you need to be vigilant about protesting your taxes every year to protect your cash flow.
The $140,000 Homestead Exemption (New for 2026)
Texas voters approved a major increase to the homestead exemption in November 2025. The general homestead exemption for school district taxes jumped from $100,000 to $140,000. For seniors and disabled homeowners, the additional exemption increased from $10,000 to $60,000, meaning you can combine them for up to $200,000 in school district value reductions. If you haven't filed for your homestead exemption yet, do it now through your county's appraisal district:
The deadline is April 30.
What Is the Difference Between Market Value and Assessed Value?
This trips people up, so let's break it down:
Market Value is what your appraisal district believes your home would sell for on the open market today. They base this on recent comparable sales in your area. This number can jump significantly from year to year, especially in a hot market.
Assessed Value is the number your property taxes are actually calculated on. If you have a homestead exemption, your assessed value is capped at a 10% annual increase, even if the market value shoots up more than that. This is why filing your homestead exemption is so important.
For example: let's say your home's market value jumps from $400,000 to $460,000 (a 15% increase). With a homestead exemption, your assessed value can only rise to $440,000 (10% of $400,000). Your taxes are based on that $440,000 assessed value, not the $460,000 market value. That gap saves you real money.
How Are Property Tax Rates Set?
Your total property tax bill is determined by multiplying your assessed value (minus exemptions) by the combined tax rate from all the taxing entities that serve your property. In Austin, that typically includes:
- Travis County
- City of Austin
- Austin ISD (or your local school district)
- Austin Community College
- Travis County Healthcare District
If you're in Hays or Williamson County, your taxing entities will differ - for example, Round Rock ISD, Hays CISD, or Williamson County instead. Each entity sets its own rate annually. The school district portion is usually the largest chunk of your bill, which is why the $140,000 homestead exemption (which applies to school taxes) makes such a big difference.
Should You Protest Your Property Taxes?
Short answer: almost always yes. Even in a rising market, the county's valuation may be higher than what comparable homes are actually selling for. Protesting doesn't cost you anything, and the potential savings are significant.
I wrote a complete step-by-step guide on exactly how to do it: How to Protest Your Property Taxes in Texas (2026): A Step-by-Step Guide That Actually Works. That post covers everything from filing your protest online through eFile, to choosing the right comparable properties, to what to expect at a formal ARB hearing.
If you'd rather have someone handle it for you, I recommend Five Stone Tax Advisers. They've represented over 6,000 Travis County taxpayers and typically achieve around a 6% reduction.
Key Deadlines to Remember
- January 1 - Property values are assessed as of this date
- April 30 - Deadline to file for homestead exemption
- Mid-April - Notice of Appraised Value arrives in the mail
- May 15, 2026 - Deadline to file your property tax protest (or 30 days after your Notice is mailed, whichever is later)
- October-January - Tax bills are mailed and due by January 31
Look Up Your Property Value
Not sure what your home is currently appraised at? You can search your property on your county's appraisal district website:
- Travis County (TCAD) Property Search
- Hays County Property Search
- Williamson County (WCAD) Property Search
If you have any questions about your property taxes or want to understand how they affect your buying or selling decision, feel free to reach out. I'm always happy to help.
