Austin Market Guide

How much are property taxes on a luxury home in Austin?

Expect roughly 1.7% to 2.2% of the home's taxable value each year inside Austin, depending on which city, school district and other taxing units apply. On a $2 million home that can be $34,000 to $44,000 before exemptions. A homestead exemption and the 10% annual cap on homestead appraisal increases bring that down over time.

12 months ending September 2026

0% Texas state income tax
10% Annual homestead appraisal cap
May 15 Usual protest deadline
Jan 1 Appraisal date each year

Why property tax is the big number in Texas

Texas has no state income tax, so cities, counties, school districts and special districts are funded largely by property tax. Your bill is the sum of each taxing unit's rate times your taxable value.

How the bill is built

  • Appraised value: the appraisal district (Travis Central Appraisal District for most of Austin) values your home as of January 1 and mails notices in spring.
  • Exemptions: a homestead exemption removes a set amount from the school-district taxable value, and some cities and counties add their own. Over-65 and disability exemptions add more.
  • The rates: combined rates inside Austin commonly land around 1.7% to 2.2%; Westlake, Lakeway and other cities have their own mix.

The homestead cap

Once a home is your homestead, its taxable value cannot rise more than 10% a year, even if the market value jumps more. In a rising market that gap grows every year. File the homestead application with the appraisal district once the home is your principal residence.

Protest every year

You can protest your appraisal, usually by May 15 or 30 days after the notice is mailed, whichever is later. Luxury homes are hard to value from mass appraisal models, so evidence from closed sales and the home's condition often wins reductions.

Buying: estimate from your price, not the seller's bill

The seller's bill may reflect years of homestead caps. A new owner is typically appraised near the purchase price. Budget from the price you pay. See what Austin luxury homes cost.

Source: MJ McFarland's analysis of Unlock MLS (ACTRIS) closed sales of single-family homes, condos and townhomes, October 2025 through September 2026. Leases excluded. Figures are medians unless noted.

Frequently Asked Questions

What is the property tax rate in Austin, Texas?

There is no single rate. A home inside the City of Austin is taxed by the city, Travis County, a school district, Austin Community College, Central Health and sometimes other districts. Combined, those commonly run about 1.7% to 2.2% of taxable value. The appraisal district publishes the exact rates for any address.

How much are property taxes on a $2 million home in Austin?

Before exemptions, roughly $34,000 to $44,000 a year at combined rates of about 1.7% to 2.2%. A homestead exemption lowers the school-district portion, and the 10% annual homestead cap limits increases in later years. A new buyer is usually appraised close to the purchase price, so budget from your own price, not the seller's bill.

What is the homestead exemption in Texas?

A homestead exemption reduces the taxable value of your principal residence for school-district taxes, and some cities and counties add their own percentage exemption. Texas voters raised the school homestead exemption again in November 2025. Once you have a homestead, your taxable value also cannot rise more than 10% a year.

When is the deadline to protest property taxes in Travis County?

Generally May 15, or 30 days after the appraisal district mailed your notice of appraised value, whichever is later. You can file online with the Travis Central Appraisal District. Bring evidence: recent closed sales of comparable homes and documentation of condition issues.

Will my property taxes go up when I buy a house in Austin?

Often yes. Sellers who held a homestead for years may have a taxable value well below market because of the 10% cap. After you buy, the appraisal district usually values the home near what you paid, and the cap restarts only once you file your own homestead exemption.

Does Texas have a state income tax?

No. Texas has no personal state income tax, which is a large part of why property taxes are higher than in many states. For buyers moving from high-income-tax states, the trade typically favors Texas at higher incomes, but the property tax bill on a luxury home should be part of the budget from day one.

Work With MJ

(512) 717-1567 [email protected]

MJ McFarland, Principal | Broker Associate
Christie's International Real Estate · 1105 N Lamar Ste 100, Austin, TX 78703
TX License 07001832 (TX)