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The ad valorem tax in Texas, also called property tax, is a type of locally assessed tax where the tax bill depends on the value of the property being taxed.
Property tax is imposed on homes, land, commercial properties, and other types of real estate. Revenues from property taxes fund a variety of local government units, including school districts, cities, counties, and community colleges.
The term ad valorem means “according to value” in Latin.
Property Appraisals
Because the value of a property can change over time, depending on improvements, deterioration, or changing market conditions, properties are regularly appraised to determine a current value. Each county appraisal district appraises property located in the county.
However, appraisal districts do not set the tax rates of local governments. Those rates are set by the governing bodies of the various taxing entities themselves, within legal limits.
Local Rates
Local rates vary throughout Texas. A list of all rates is available here, though the overlapping nature of tax jurisdictions means that a taxpayer’s total rate will depend on the location of their home. Contact your local county tax assessor-collector for information specific to your area.
Texas has no state-level property tax. Only local governments collect property taxes. However, the state does redistribute some local tax dollars from property-rich districts to less wealthy districts to provide more equitable public school financing across the state.
Property owners typically pay their property tax in Texas every year. Tax-assessors send a tax bill to each property owner listed on the tax roll by October 1 of each year.
Property Tax Exemptions
Local taxing units offer a variety of partial or total exemptions. A partial exemption removes a percentage or a fixed dollar amount of a property’s appraised value from taxation. A total exemption excludes the entire property from taxation.
The state mandates that taxing units offer certain exemptions and gives them the option to decide locally whether or not to offer others.
Residence Homestead Exemption
School districts must offer a $25,000 exemption on residence homesteads. Additionally, any taxing unit, including a city, county, school district, has the option of deciding locally to offer a separate homestead exemption of up to 20% of a property’s appraised value, but not less than $5,000.
Senior or Disabled Exemption
School districts must offer a minimum $10,000 residence homestead exemption to persons age 65 or older or disabled. Additionally, any taxing unit has the option to offer a separate residence homestead exemption for persons age 65 or older or disabled in an amount not less than $3,000. To qualify for these senior exemptions, the owner must be age 65 or older and live in the house, or be the surviving spouse of someone 65 or older, if the survivor was 55 or older at the time of the spouse’s death.
Disabled Veterans and Surviving Spouses and Children
Disabled veterans and surviving spouses and children of deceased disabled veterans are entitled to partial property tax exemptions. If the veteran receives 100% disability compensation from the U.S. Department of Veterans Affairs, then the veteran is entitled to a total property tax exemption.
Armed Services Members and First Responders KIA
A surviving spouse of a member of the U.S. armed services killed in action is allowed a total property tax exemption on his or her residence homestead, if the surviving spouse has not remarried. The same is true for the spouse of a first responder killed or fatally injured in the line of duty.
Church Property
Houses of worship and clergy residences owned by religious groups are exempt from property tax.
