Texas Property Tax Changes 2026: What Every Homeowner Needs to Know

Texas homeowners just got hit with the biggest property tax overhaul in years.

Some changes will save you money. Others could cost you hundreds more per year.

Here's what changed in 2026, what it means for your tax bill, and exactly what you need to do about it.

The Big Picture: What Changed in 2026

Texas property taxes work differently than most states. There's no state property tax. Instead, local taxing entities (school districts, counties, cities) set their own rates. And in 2026, several things shifted at once.

Key changes:

• Homestead exemptions increased to $140,000 (up from $100,000)
• Local tax rates rose 2-3% in major metros
• New AI-powered appraisal systems rolled out statewide
• Expanded exemptions for seniors and disabled veterans
• New property tax relief fund for low-income homeowners

Let's break down what each of these means for you.

1. Your Homestead Exemption Just Got Bigger (Automatic Savings)

This is the good news. Texas increased the general homestead exemption from $100,000 to $140,000 for school district taxes.

What this means: If your home is worth $300,000, your taxable value for school taxes drops from $200,000 to $160,000. At a 2.4% school tax rate, that's about $960 in annual savings.

Who qualifies: Homeowners who've filed their homestead exemption with their county appraisal district.

Action step: If you haven't filed your homestead exemption yet, do it now. It applies automatically if you already have one on file.

2. Local Tax Rates Went Up (Slightly)

While the homestead exemption saves you money, local tax rates increased in most major Texas metros.

Average increases:

• Travis County (Austin): 0.495% → 0.515%
• Harris County (Houston): 0.437% → 0.451%
• Dallas County: 0.249% → 0.258%
• Bexar County (San Antonio): 0.195% → 0.203%

On a $400,000 home, a 0.02% increase adds about $80 to your annual tax bill.

Why it happened: Rising costs for schools, public safety, and infrastructure. Texas cities and counties fund most services through property taxes since there's no state income tax.

The net effect: For most homeowners, the increased homestead exemption offsets the rate increases. But not in every case.

3. New AI-Powered Appraisal Systems Are Here

Texas appraisal districts switched to AI-powered valuation models in 2026. These systems analyze massive datasets — recent sales, market trends, property features — to determine assessed values.

What this means for you:

• Your home's appraised value might jump faster in hot markets (Austin, Dallas, Houston suburbs)
• Mass appraisal systems can still make errors (wrong square footage, missing condition issues, outdated comps)
• If you're in a rapidly appreciating neighborhood, expect higher assessments

The catch: AI doesn't see what's inside your home. It doesn't know about foundation cracks, an aging roof, or that your kitchen hasn't been updated since 1995.

Counties still rely on automated systems, and 30-60% of Texas properties are over-assessed. Learn the 5 signs your home is overassessed.

4. The Appeals Process Got Easier (Good News)

Texas streamlined the property tax protest process in 2026.

What changed:

• Clearer deadlines and simpler filing procedures
• Extended informal hearing windows in some counties
• Online evidence submission in most major metros

Why it matters: 80-90% of informal protests in Texas result in a reduction. But only about 5% of homeowners actually protest.

The deadline: You have until May 15, 2026 to file a protest after receiving your Notice of Appraised Value in April.

Action step: When you get your notice this spring, compare your assessed value to recent sales in your neighborhood. If it's too high, file a protest. Don't leave money on the table.

5. Seniors and Disabled Veterans Get More Relief

Texas expanded exemptions for seniors (65+) and disabled veterans in 2026.

Senior exemptions:

• General homestead exemption: $140,000
• Additional senior exemption: $60,000
• Total exemption for seniors: $200,000

For a $350,000 home, a senior's taxable value drops to $150,000 — a massive reduction.

Disabled veteran exemptions:

• 100% disabled veterans: Full exemption (no property taxes)
• 70-99% disabled: Up to $50,000 additional exemption
• 50-69% disabled: Up to $25,000 additional exemption

Income limits increased: More seniors now qualify for exemptions based on higher income thresholds.

6. New Property Tax Relief Fund Launched

Texas created a new property tax relief fund in 2026 for low-income homeowners.

Who qualifies:

• Household income below 200% of the federal poverty line
• Property value under $250,000
• Must be primary residence

What you get: Direct rebates or tax reductions based on income and property value. Eligible homeowners could receive $500-$2,000 in relief.

How to apply: Contact your county appraisal district or visit their website. Application deadlines vary by county.

7. The 10% Homestead Cap Still Applies (But...)

Texas still caps annual increases in your homestead's assessed value at 10%. But here's the catch: the cap only limits your assessed value, not your tax bill.

If your local tax rates increase (which they did in 2026), your bill can still go up more than 10%.

Example:

• 2025 assessed value: $300,000
• 2026 market value: $345,000
• With 10% cap: Your assessed value is $330,000 (not $345,000)
• But if tax rates increased from 2.4% to 2.5%, your bill still went up

This is why understanding the difference between assessed value and tax rate matters. Learn more about property tax caps.

What You Need to Do Right Now

Here's your 2026 Texas property tax action plan:

1. File Your Homestead Exemption (If You Haven't)

If you bought a home in 2025 or never filed, do it now. You're leaving $1,000+ on the table every year.

Where to file: Your county appraisal district (online in most counties).

2. Review Your 2026 Property Assessment Notice

You'll receive your Notice of Appraised Value in April. When it arrives:

• Compare your assessed value to recent sales in your neighborhood
• Check your property record for errors (square footage, features, year built)
• Look for signs of unequal appraisal (your value higher than similar homes)

3. File a Protest by May 15 (If Your Value Is Too High)

If your assessed value seems inflated, you have until May 15 to file a protest.

You don't need to do this alone. TaxDrop handles the entire protest process for Texas homeowners. We gather evidence, file your protest, attend hearings, and negotiate with the appraisal district.

We use a no win, no fee model. If we don't reduce your property taxes by at least $500, you pay nothing. If we do, we charge 25% of your first-year savings.

4. Apply for All Available Exemptions

Make sure you're claiming:

• Homestead exemption ($140,000)
• Senior exemption ($60,000 if you're 65+)
• Disabled veteran exemptions (if applicable)
• Low-income relief fund (if eligible)

5. Budget for Higher Tax Bills

Even with the increased homestead exemption, some homeowners will pay more in 2026 due to rate increases and higher appraisals.

Run the math:

• Check your 2025 tax bill
• Add 2-3% for rate increases
• Factor in any appraisal increases above the 10% cap

Set aside extra funds if needed or set up automatic payments to avoid penalties.

Which Texas Cities Are Most Affected?

Property tax increases hit hardest in fast-growing metros:

Austin (Travis County): Average home values jumped 8-12% in 2025. Combined with rate increases, many homeowners will see higher bills despite the exemption increase.

Dallas-Fort Worth: Suburban growth (Frisco, McKinney, Prosper) means higher appraisals. Rate increases in Dallas County add to the burden.

Houston (Harris County): Hurricane recovery costs and infrastructure needs drove rate increases. Homeowners in flooding zones should check for assessment errors.

San Antonio (Bexar County): Slower growth means smaller increases, but rate adjustments still impact budgets.

What's Coming in 2027 and Beyond?

Here's what experts predict for Texas property taxes:

Continued appraisal increases: As long as home values rise, assessed values will follow (within the 10% cap for homesteaded properties).

Rate adjustments: Local jurisdictions will continue tweaking rates based on budget needs. Expect 1-3% annual fluctuations.

Legislative reforms: Texas lawmakers are discussing additional property tax relief measures, including:

• Expanding homestead exemptions further
• Lowering the 10% cap to 5% for seniors
• Creating alternative funding sources to reduce property tax reliance

More AI in appraisals: Expect appraisal districts to rely more heavily on automated valuation models. This makes protesting even more important — you need to counter the computer's assumptions with real evidence.

The Bottom Line

Texas property taxes in 2026 are a mixed bag:

✅ Good news: Homestead exemptions increased, saving most homeowners $500-$1,000 annually

❌ Bad news: Local tax rates went up 2-3%, and AI-powered appraisals are pushing assessed values higher

What matters most: Whether you take action.

Most Texas homeowners overpay on property taxes because they don't protest. 80-90% of protests succeed, but only 5% of homeowners file them.

Don't be part of the 95% who leave money on the table.

Ready to reduce your property taxes? Get a free savings estimate at TaxDrop.com in under 2 minutes. We handle your entire protest — you only pay if we save you at least $500.