Highly effective tax rates add pressure despite relatively lower home prices.
Dallas, 17 February 2026 – Texas homeowners are paying some of the highest property taxes in the United States, placing added strain on household budgets even as home values remain below the national median. A recent analysis based on data from the U.S. Census Bureau shows that Texas ranks ninth-highest nationwide for effective property tax rates.
In simple terms, an effective property tax rate reflects how much homeowners pay in property taxes compared to the value of their homes. In Texas, this rate stands at 1.245 percent for owner-occupied homes, well above the national average of 0.888 percent. This means Texas homeowners are paying a larger share of their home’s value in taxes than most Americans.
The study, conducted by Construction Coverage, found that property tax revenue across the country rose sharply between 2022 and 2024. During this period, nationwide property tax collections increased by more than $96 billion, far outpacing growth in sales tax and corporate income tax revenues.
How Texas Compares to the Nation
Despite having lower home values, Texas residents are facing higher tax bills. The median property tax bill in the state is $4,108, nearly $900 more than the national median of $3,211. At the same time, the median value of an owner-occupied home in Texas is $313,200, which is significantly lower than the national median of $360,600.
Household income levels offer only limited relief. The median household income for Texas homeowners is $101,734, slightly higher than the national median. Even so, higher effective tax rates mean a larger portion of income goes toward property taxes, adding to overall housing affordability concerns.
Property Tax Assessment Lag Explained
One reason behind the uneven tax burden lies in how property values are assessed. Property taxes are based on assessed home values, which are often updated periodically or when a home is sold. Because of this delay, known as an assessment lag, tax bills do not always move in line with rapid changes in market prices.
Over the past decade, national effective property tax rates have declined, even as home prices surged. Researchers say this has created a gap between long-term homeowners and new buyers. Those who have owned homes for many years often benefit from lower effective tax rates, while new buyers purchasing at higher market values may face much larger tax bills almost immediately.
The analysis highlights that while rising home prices attract attention, property taxes remain a hidden cost that can significantly impact affordability. In Texas, where there is no state income tax, property taxes play a central role in funding local services, making them a major expense for homeowners.
As housing costs continue to evolve, property taxes are expected to remain a key factor shaping homeownership decisions across Texas, particularly for first-time buyers navigating higher entry costs.
