Who Pays the Most in Property Taxes—And Who Saves the Most from Appeals

The Two Factors That Determine Your Tax Bill

Property taxes aren't just about what your property is worth. Two factors determine what you actually pay:

1. Property type – Commercial buildings pay more per dollar of value than residential homes
2. Owner type – A landlord with a $400K rental pays significantly more than a homeowner with a $400K primary residence

Most guides only cover property type. That's a mistake. Your ownership status and exemption eligibility often matter more than the property itself.

A $500K home in Texas could have an annual tax bill anywhere from $0 to $12,500+ depending on who owns it and what exemptions apply.

Note: In Texas, challenging your assessment is called a "protest." In California, it's an "appeal." We use both terms interchangeably.

Owner Types: Who Pays What (Same Property, Different Bills)

Let's look at a $450,000 single-family home in Harris County, Texas. Same house. Same neighborhood. Wildly different tax bills based on owner type:

‍The takeaway: An investor landlord pays 44% more than a senior homeowner for the exact same property. And a 100% disabled veteran is rightly fully exempt.

Landlords and Investors: The Highest Effective Tax Rates

If you own rental properties or investment real estate, you're paying the maximum possible rate. No exemptions. No caps. No freezes.

Why Landlords Pay More

• No homestead exemption – That $100K reduction in Texas? Only applies to your primary residence.
• No 10% annual cap – Your assessed value can jump 20%, 30%, or more in a hot market. Homesteaded properties are capped at 10%.
• No senior freeze – Even if you're 65+, your rentals don't qualify.
• Multiple properties = compounding pain – Own 5 rentals? You're paying full freight on all of them.

Real Numbers: Homestead vs. Rental

Consider two identical $400K properties in Bexar County, Texas:

The landlord pays $2,268 more per year—and the gap widens every year in appreciating markets.

Why Landlords Should Appeal More Aggressively

Here's the upside: landlords have the most to gain from successful appeals.

Since you're paying on the full assessed value with no exemption cushion, every dollar reduced comes straight off your bill. A 10% reduction on a $400K rental saves $840/year. The same 10% reduction on a homesteaded property? Only $588.

If you own multiple investment properties, appealing all of them can save $5,000–$15,000+ annually.

Homeowners with Homestead Exemption: The Middle Ground

The homestead exemption is the single most valuable tax benefit for Texas homeowners. California doesn't offer a true equivalent (Prop 13 works differently), but Texas homeowners leaving this on the table are overpaying by $1,000+/year.

Texas Homestead Benefits

• $100,000 exemption from school district taxes (the biggest chunk of your bill)
• 10% annual cap on assessed value increases
• Additional local exemptions – Many cities and counties add $5K–$20K more

Who Qualifies

• You own the property
• It's your primary residence (where you live)
• Your driver's license shows the property address

Common mistake: Assuming it's automatic. You must apply—and roughly 20% of eligible Texas homeowners never do.

California: No Homestead, But Prop 13 Protection

California doesn't have a homestead exemption like Texas. Instead, Proposition 13 caps assessed value increases at 2% per year—regardless of market appreciation.

The catch? Your base value is set when you buy. If you purchased in 2021 at the market peak and values have since declined, you may be overassessed. That's where Prop 8 appeals come in.

Seniors (65+): Tax Freezes and Extra Exemptions

Turning 65 unlocks significant property tax benefits in Texas—and moderate benefits in California.

Texas Senior Benefits

• Additional $10,000 exemption from school district taxes
• School tax freeze – Your school taxes are frozen at the amount you paid the year you turned 65 (or applied). They never go up, even if your assessed value increases.
• Tax ceiling transfer – If you sell and buy another homestead, you can transfer a percentage of your frozen tax ceiling to the new property.
• Optional local freezes – Some cities and counties also freeze their portion of taxes for seniors.

What the Freeze Actually Means

Let's say you turned 65 in 2020 and your school taxes were $4,200 that year. In 2024, your neighbor (same home value, not 65+) pays $5,800 in school taxes. You still pay $4,200.

Over 10 years, this freeze can save $15,000–$30,000 compared to non-senior homeowners.

California Senior Benefits

California offers less dramatic senior benefits:

• Prop 60/90 portability – Seniors 55+ can transfer their Prop 13 base value to a new home (within the same county or participating counties)
• Property tax postponement – Seniors can defer property taxes until they sell or pass away (essentially a loan from the state)
• No tax freeze – Unlike Texas, California doesn't freeze senior taxes

Should Seniors Still Appeal?

Yes—especially for the school tax freeze.

In Texas, your school taxes freeze at the current year's amount when you turn 65 or apply. If your property is overassessed when you hit 65, you're locking in an inflated tax amount forever.

Appeal before you turn 65 (or immediately after) to lock in the lowest possible frozen amount.

Disabled Homeowners: Equivalent to Senior Benefits

Texas treats disabled homeowners the same as seniors for property tax purposes:

• Additional $10,000 school district exemption
• School tax freeze
• Tax ceiling transfer rights

You qualify if you're "disabled" under Social Security guidelines or receive disability benefits.

Disabled Veterans: Partial to Full Exemption

Veterans with service-connected disabilities receive property tax exemptions based on disability rating:

Disability RatingTexas Exemption10-29%$5,000 off assessed value30-49%$7,500 off assessed value50-69%$10,000 off assessed value70-99%$12,000 off assessed value100%Full exemption (pay $0)

100% disabled veterans pay zero property taxes on their primary residence in Texas. This also applies to surviving spouses who haven't remarried.

California offers similar (though less generous) veteran exemptions, typically $100K–$150K off assessed value for qualifying disabled veterans.

Property Types: Commercial, Luxury, and Multi-Family

Beyond owner type, the property itself affects your tax burden and appeal potential.

Commercial Properties: Highest Absolute Bills

Office buildings, retail centers, and industrial properties pay the highest absolute taxes—often $50,000–$200,000+ annually.

They also face the most assessment errors because:

• Assessors use income-based valuations that overestimate rental income
• Unique properties get compared to inappropriate "comps"
• Vacancy rates and expenses are often underestimated

Appeal savings potential: $8,000–$50,000+ annually

Luxury Residential ($1M+): Aggressive Appraisals

High-end homes face disproportionate assessment increases because:

• Assessors apply aggressive "market adjustment" multipliers
• Unique features get overvalued (no true comparables)
• Homestead caps provide less relative protection at high values

In Austin, homes valued at $1.5M+ saw an average 18.7% assessment increase in 2023—double the rate of homes under $500K.

Appeal savings potential: $3,000–$12,000+ annually

Multi-Family Properties: Highest Success Rates

Apartment buildings have the highest appeal success rates (68%) because income-method valuations have multiple error points:

• Rental rate assumptions
• Vacancy rate assumptions
• Operating expense calculations
• Cap rate selection

Appeal savings potential: $5,000–$18,000+ annually

Rapidly Appreciating Markets: The "Hot Zone" Penalty

Properties in booming neighborhoods get hit with speculative appraisals. Assessors apply blanket percentage increases to entire ZIP codes, often overshooting actual appreciation.

In boom markets (15%+ annual appreciation), overassessment rates reach 26–32%.

Who Saves the Most from Appeals: The Full Picture

Combining property type AND owner type, here's who benefits most from successful appeals:

ProfileWhy They Save MoreTypical Annual SavingsLandlord with multiple rentalsNo exemptions, full exposure on every property$5,000–$20,000+Commercial property ownerHighest absolute bills, complex valuations$10,000–$50,000+Luxury homeowner ($1M+)Aggressive appraisals, limited cap protection$3,000–$12,000Senior approaching 65Lock in lower frozen amount before freeze kicks in$1,000–$3,000 (compounding)Multi-family ownerHigh success rates, income method errors$5,000–$18,000Homeowner in hot marketSpeculative overassessments common$1,500–$4,000

Who Doesn't Benefit Much from Appeals

Not every situation warrants an appeal:

• 100% disabled veterans – You already pay $0
• Recently purchased properties – Sale price is strong evidence of value
• Modest homes in stable markets – Savings may be $200–$600 (still worth it with no-fee model)
• Properties with recent professional appraisals matching the county's value

Best Time to File Your Appeal

• Texas: Protest deadline is May 15 (or 30 days after your notice arrives, whichever is later)
• California: Appeal windows vary by county, typically July–November

Special timing for seniors: Appeal in the year you turn 65 to lock in the lowest possible frozen school tax amount.

How to Know If You Should Appeal

Ask yourself:

1. Did your assessment increase more than 10% this year?
2. Are you a landlord paying full freight with no exemptions?
3. Do you own commercial, luxury, or multi-family property?
4. Are recent comparable sales lower than your assessment?
5. Are you turning 65 soon and want to lock in a lower freeze?

If you answered yes to any of these, you likely have appeal potential.