One of the first things people love about moving to Texas is the lack of a state income tax. It’s real money back in your pocket. But before you set your home-buying budget around that, you need to understand the other side of the ledger: property taxes, which in the DFW suburbs run higher than what a lot of newcomers are used to.
Here’s a plain-English breakdown so there are no surprises at closing.
How DFW property taxes actually work
Your annual property tax bill is your home’s assessed value multiplied by the combined tax rate for where it sits. That combined rate stacks several local taxing entities — your city, county, school district (usually the biggest piece), and sometimes a community college or special district.
Across DFW suburbs, that combined effective rate typically lands somewhere around 2% to 2.5% of assessed value per year, depending on the exact location and which districts apply.
What that looks like in real dollars
On a $500,000 home at a 2.3% effective rate, you’re looking at roughly $11,500 per year — about $960 a month on top of your mortgage principal and interest.
That number matters because it changes the home price you can actually afford. Two buyers with the same monthly budget will qualify for very different home prices depending on the tax rate in each suburb.
Three things that lower the bill
- Homestead exemption. If the home is your primary residence, file for the homestead exemption — it reduces your taxable value and caps how fast your assessed value can rise each year.
- Over-65 and disability exemptions. Additional exemptions apply if you qualify, and they can meaningfully cut the school-tax portion.
- Protesting your assessment. If the county over-values your home, you can protest the appraisal. Plenty of homeowners do this every year and win a reduction.
How to budget before you buy
Don’t shop on list price alone. When you compare two suburbs, pull the combined tax rate for each and run the real monthly number — mortgage plus taxes plus insurance. A “cheaper” home in a higher-tax district can cost more every month than a pricier home in a lower-tax one.
This is exactly the kind of side-by-side I run with buyers before we ever tour homes. If you want help mapping your budget to the right suburb — with the tax math baked in — let’s talk.
Property tax rates, exemptions, and assessed values change year to year and vary by address. The figures above are general guidance for orientation only — always verify current rates with the relevant county appraisal district before making a decision.