The Intelligence You Need Before You Buy
Here’s the thing about Texas property taxes that trips up almost every buyer relocating from out of state: no income tax doesn’t mean no taxes. It means the tax burden shifts to property, and in North Texas, we’re talking about some of the highest effective rates in the country. According to the Texas Comptroller, there’s no state property tax, so local governments depend entirely on these revenues for schools, roads, and emergency services.
But here’s what separates informed buyers from everyone else: the exemptions and protections built into Texas law can save you thousands every single year, if you know how to use them. Most people don’t. You’re about to.
I’ve watched too many buyers, smart people, successful people, get blindsided by their first property tax bill because nobody explained how this system actually works. That ends today. This is the guide I wish someone had handed me when I started in this business, and it’s the same intelligence I share with every client who trusts me with their home search.
How Your Tax Bill Actually Works
Forget the complexity for a moment. Here’s the formula that determines what you’ll pay:
Appraised Value × Tax Rate = What You Owe
Simple enough. But here’s where it gets strategic: each piece of that equation has leverage points that most buyers completely miss. The Texas Property Tax Code governs how appraisal districts determine your value, and understanding this process gives you power.
What’s happening across Ellis County and DFW right now:
| County | Typical Rate Range | What This Means For You |
|---|---|---|
| Ellis | 2.15% – 2.45% | Waxahachie area, varies heavily by school district |
| Collin | 2.14% – 2.82% | Higher-growth areas pushing rates upward |
| Dallas | ~2.22% | Average across jurisdictions |
| Tarrant | 2.10% – 2.55% | Fort Worth metro specifics matter greatly |
| Denton | 2.10% – 2.55% | Rapid growth affecting rates annually |
The strategic insight here is critical: that rate variance between school districts is where informed buyers find real value. A half-percent difference on a $400,000 home means $2,000 per year, $166 every single month. I track which districts are raising rates and which are holding steady because this is the kind of intel that affects your monthly payment for the entire time you own that home.
Your property tax bill arrives from multiple taxing entities. You’ll see line items for your school district (typically the largest portion), county, city, community college district, and sometimes special districts like MUDs or hospital districts. Each entity sets its own rate, and they add up fast. This is why two homes with identical purchase prices in different parts of the metroplex can have tax bills that differ by thousands annually.
The $100K Tax Break Most People File Too Late
The Texas Homestead Exemption is the single most valuable tax benefit you’ll claim as a homeowner. The Texas Comptroller’s exemption guide explains that it currently removes $100,000 from your school district taxable value, and here’s what most people don’t realize: it’s just to increased to $140,000 following recent legislative action.
That’s not a minor adjustment. That’s a potential $800-$1,200 in additional annual savings depending on your school district’s tax rate. This is real money that stays in your pocket instead of going to the tax office.
Let me show you real numbers with real savings:
Say you’re buying in Waxahachie ISD at $375,000 with a combined rate of 2.3%:
- Without exemption: $8,625 per year
- With $140K exemption: $5,405 per year
- Annual savings: $3,220
That’s $268 every month staying in your pocket. Every single month. For as long as you own that home. Over a typical seven-year ownership period, that’s $22,540 in savings from one free form.
What you need to do: File as soon as you close on your home. Not next April, immediately. The April 30 deadline that everyone quotes is the latest you should file, not your target date. File within 30 days of closing and you start saving in your first full tax year.
The application process is straightforward. You’ll need your Texas driver’s license showing your new address as your primary residence, and you’ll submit Form 50-114 to your county appraisal district. Ellis County homeowners file with the Ellis Appraisal District, while Dallas County uses the Dallas Central Appraisal District. Most counties now accept online applications, making the process even simpler.
Here’s something else most buyers don’t know: you can file a late homestead exemption application up to two years after the delinquency date and still receive exemptions for that period. But why wait? File immediately and protect yourself from Day One.
The 10% Cap That Protects You From Market Chaos
This is where Texas property law actually works in your favor, and it’s something I explain to every single client because it fundamentally changes how you should think about rising home values in a hot market.
Once you file your homestead exemption, your taxable value cannot increase more than 10% per year, regardless of what happens to your market value. The North Texas Property Tax Services explanation of this limitation shows why it’s such a powerful protection.
Here’s why this matters in a rapidly appreciating market:
Your home appraises at $400,000 in Year One. The market surges and comparable sales suggest it’s now worth $520,000 in Year Two. Without the homestead cap, your taxable value, and therefore your tax bill, would jump 30% in a single year. With the cap in place, your taxable value is limited to $440,000, regardless of market conditions.
The strategic play becomes clear when you look at areas experiencing rapid growth. In southern Ellis County, especially with major developments like the 5,200-acre Ferris project coming online over the next decade, this cap becomes increasingly valuable over time. Early buyers who file their homestead exemption immediately lock in lower tax bases while market values around them escalate. Five years from now, those early filers could have taxable values significantly below their neighbors who bought later.
One important caveat: the cap only applies to value increases from market appreciation. If you add a pool, build an addition, or make other improvements, that new value gets added to your taxable base separately. The cap then applies to future increases from that new starting point.
Senior Tax Freeze: The Lock Nobody Talks About
When you turn 65, you don’t just qualify for an additional exemption, you get something even more powerful: your school district taxes freeze at whatever dollar amount you’re paying that year.
Let me be clear about what this means: not the rate, not the assessed value, the actual dollar amount you owe to the school district becomes permanently locked.
Property values double over the next decade? Tax rates increase? None of it matters. Your school district taxes stay exactly where they were when you turned 65. According to Texas AgriLife Extension’s analysis, this ceiling can represent tens of thousands in lifetime savings for homeowners who stay in place.
The additional $60,000 exemption for seniors stacks on top of the general homestead exemption, meaning total school district exemptions of $200,000 under the new limits. Combined with the tax ceiling, this makes Texas one of the most favorable states in the country for retired homeowners.
And here’s the part that surprises most people: the ceiling transfers.
Move to a new Texas home at age 70? You take that tax ceiling with you, proportionally adjusted to your new home’s value. This is one of the most misunderstood benefits in Texas real estate, and it’s massively valuable for clients doing retirement planning. The portability of this benefit means you’re not trapped in your current home just to keep your low taxes, you can move and maintain your protection.
Similar benefits apply to homeowners with qualifying disabilities. If you’re in this situation, file immediately upon turning 65 or receiving your disability determination. Every year you wait is a year of higher taxes you can’t get back.
The Protest That Pays: Why 80% of Informal Hearings Win
Here’s a number that should fundamentally change how you think about your annual appraisal notice: approximately 80% of informal property tax protests result in reduced valuations. According to O’Connor & Associates, one of the largest property tax consulting firms in Texas, the success rate is even higher when homeowners come prepared with solid evidence.
That’s not a typo. The vast majority of people who show up with reasonable comparable sales evidence walk away paying less in property taxes.
The timeline you need to know:
- May 15 (or 30 days after your notice arrives, whichever is later) = protest deadline
- Download your property record card from the county appraisal district website
- Gather 3-5 comparable sales that support a lower value than your appraisal
- Request an informal hearing first—this is where most successful reductions happen
The informal hearing is exactly what it sounds like: a conversation with an appraiser where you present your evidence and they evaluate whether an adjustment is warranted. No lawyers, no formal proceedings, just you and data. If you can’t reach agreement, you can proceed to the Appraisal Review Board for a formal hearing.
My recommendation to every client: Protest every single year, even if your appraised value seems reasonable. The process costs you nothing but time, and in a market with this much price movement, appraisal districts are working with imperfect data and mass-appraisal techniques. Your job is to correct errors and ensure your specific property isn’t overvalued relative to actual market conditions.
Evidence that works includes recent sales of similar homes in your immediate area, photos documenting condition issues the appraiser couldn’t see from the street, and any factors that negatively affect your property’s value compared to neighbors. Properties backing to commercial developments, busy roads, or power lines often deserve lower valuations than the district assigns.
The Veterans’ Benefit Most People Don’t Know Exists
Veterans with 100% disability ratings from the VA pay zero property taxes in Texas. Not reduced taxes, COMPLETE exemption from all property taxes on their homestead. The Texas Veterans Commission provides complete details on these exemptions.
Even partial disability ratings come with significant exemptions worth claiming:
| VA Disability Rating | Annual Exemption Amount |
|---|---|
| 100% | Complete exemption from all property taxes |
| 70-99% | $12,000 off taxable value |
| 50-69% | $10,000 off taxable value |
| 30-49% | $7,500 off taxable value |
| 10-29% | $5,000 off taxable value |
Critical detail that families need to understand: Surviving spouses often retain these benefits after a veteran’s death. The Comptroller’s FAQ on disabled veteran exemptions explains the eligibility requirements for surviving spouses and dependent children.
If you’re a veteran or married to one, your first conversation after closing should be with the county appraisal district about these exemptions. Bring your VA disability rating documentation and apply immediately.
New Construction Tax Reality
Buying new construction? Here’s what the builders won’t explain clearly, and it catches people off guard every single time:
Year One: You’re taxed on land value only because the home wasn’t complete on January 1st
Year Two: Full structure value hits your tax bill for the first time
That means your first property tax bill looks completely manageable, maybe even surprisingly low. Then Year Two arrives with the real number, sometimes double or triple the first year. I’ve watched this surprise clients who didn’t budget for it, creating cash flow stress that was entirely avoidable with proper planning.
When you’re evaluating new construction, ask your lender, whether that’s Denise Donoghue at The Mortgage Nerd or Andrew Bryan at Miramar, to run your payment estimates using the full Year Two tax projection. That’s the real number you’ll live with, not the artificially low first-year amount.
The flip side of this timing issue: If you’re buying new construction, file your homestead exemption immediately after closing. You want that exemption locked in place before the first full-value assessment hits your tax bill.
What This Means For Your Next Move
Property taxes in North Texas aren’t just a line item on your closing statement, they’re a strategic consideration that should inform which school districts you consider, when you pull the trigger on a purchase, and how you protect yourself over the long term of ownership.
Here’s what I tell every single client who works with me:
First, file your homestead exemption within 30 days of closing. Don’t wait for April 30, that’s the deadline for procrastinators, not for strategic buyers.
Second, know your school district’s tax rate before you fall in love with a house. That dream home might cost you $200 more per month than a similar property one district over.
Third, protest your appraisal annually. It’s essentially free money for minimal time investment, and success rates are heavily in your favor.
Fourth, if you’re approaching 65, file for your senior exemption and tax freeze immediately. Every year you delay is money you’re leaving on the table permanently.
Fifth, talk to your lender about how property taxes affect your actual monthly payment. Get the real numbers, not estimates based on incomplete information.
The buyers who win in this market aren’t necessarily the ones with the biggest budgets, they’re the ones with the best information and the discipline to act on it. Property tax strategy is one of those areas where a little knowledge creates thousands of dollars in lifetime savings.
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Bobby Franklin – REALTOR®
Legacy Realty Group – Leslie Majors Team
Serving Ellis County & DFW
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