Understanding Austin Property Taxes in 2025

Property taxes are one of the most common questions I get from Austin homeowners and future buyers. Since Texas does not have a state income tax, property taxes are a primary source of funding for schools, roads, and city services. That means Austin area tax rates can feel higher than what many newcomers are used to.

Let us break down what you need to know so you can plan with confidence.

📍 How Property Taxes Are Calculated
Your annual tax bill is based on two things:

• The assessed value of your home
• The combined tax rate for your city, county, and school district

Each taxing authority sets its own rate, so taxes can vary significantly from one neighborhood to the next. It is common for newer suburban communities with more amenities to have higher rates.

🏡 Homestead Exemption
If the home is your primary residence, you can apply for the Homestead Exemption. This reduces the taxable value of your property and places limits on how much your assessed value can increase each year.

Benefits include:

• Lower annual tax bill
• Protection from unpredictable value spikes
• Eligibility for additional exemptions if you are over 65 or have disabilities

Important: You only have to file once. Be cautious of mailers trying to charge you to file. The exemption is completely free through your county appraisal district.

📈 Why Taxes Are Rising
Austin home values have appreciated quickly over the past decade. Even with recent market corrections, values remain far higher than pre 2020 levels. As values rise, taxes follow unless exemptions or rate reductions offset the change.

School district budgets and rapid development in surrounding suburbs also contribute to higher tax rates in many areas.

💡 How To Reduce Your Tax Burden

• File your Homestead Exemption if you have not yet
• Review your assessment each year for accuracy
• Protest your valuation during the open protest period

Protesting can save homeowners hundreds to thousands of dollars annually if the assessed value is higher than comparable homes in your area.

🗺️ Why Neighborhood Choice Matters
Two houses with similar prices can have very different property tax bills based purely on location. When buying a home, it is important to compare tax rates alongside price, schools, and commute preferences.

📌 Bottom Line

Property taxes are part of the cost of living in Austin, but with the right exemptions and smart planning, you can manage them effectively. Understanding your tax rate and options early will help you make informed decisions whether you are buying, selling, or simply budgeting for the year.

Want Personalized Guidance?

If you are considering a move or want to understand how your neighborhood compares, reach out to the best realtor in Austin, Brendan Sanford. I will help you find a home that fits your lifestyle and keeps your tax bill in check.

📱 Call or text: (512) 696 0673
📧 Email: [email protected]

Let’s make sure your home and your finances both work for you.