How to Navigate the Texas Property Tax System as a New Homeowner

If you’ve just bought a home in Texas — first of all, congrats! 🎉 

You’ve officially stepped into one of the most exciting (and let’s be honest, occasionally overwhelming) chapters of adulthood. But right after the excitement of keys and moving boxes comes something a little less glamorous: property taxes.

And if you’re coming from out of state, you’ve probably already heard the whispers: “Texas doesn’t have state income tax, but wow… those property taxes!”

Spoiler alert? It’s true. But don’t stress — once you understand how it works and what steps to take, it becomes a lot less intimidating. Here's what every new homeowner in Texas — especially in places like Mansfield, Fort Worth, and Arlington — should know.

First Things First: Why Are Texas Property Taxes So High?

Let’s clear this up right away:Texas doesn’t collect state income tax, so local governments (like counties, school districts, and cities) rely heavily on property taxes to fund everything from public schools to road maintenance.

So yes — the tax rate might feel higher than what you're used to in other states. But it's not just one big bill. Your property tax is made up of several smaller rates set by different local authorities.

How Property Taxes Are Calculated in Texas

Here’s the basic formula:

Assessed Value of Your Home × Local Tax Rate = Annual Property Tax Bill

Let’s break it down:

• Assessed Value: What your county’s appraisal district says your home is worth (not necessarily what you paid for it).

• Tax Rate: This varies based on your location — in Mansfield, for example, your rate will be a combination of city, county, school district, and possibly MUD or PID taxes.

Example:A $350,000 home in Tarrant County with a total tax rate of 2.6% = $9,100/year

Step-by-Step: What to Do as a New Homeowner

1. File for Your Homestead Exemption (ASAP)

This is the big one. If this is your primary residence, you're entitled to a Homestead Exemption, which reduces your home's taxable value and saves you hundreds (or even thousands) per year.

• You only need to file once — and it’s free.

• You must own and occupy the home as of January 1st of that year.

• File with your county’s Appraisal District (each county has its own form).

👉 Example: In Tarrant County? File online at tarrantappraisal.com👉 In Travis County (Austin area)? Head to traviscad.org

Bonus: Some counties now offer additional exemptions for seniors, veterans, and disabled homeowners. Definitely worth checking.

2. Understand Your Appraisal Notices

Every year — usually in the spring — you’ll get a Notice of Appraised Value from your county. It’ll say what your home is currently valued at for tax purposes.

Don't ignore this letter. If the value seems too high, you can protest it (and many homeowners do). You’ll typically have until May 15th (or 30 days from the notice) to file a protest.

Pro tip: If your home is overvalued, reach out to a local realtor (like me 😉) or use recent comps to challenge the appraisal.

3. Check for MUD or PID Taxes (Don’t Skip This!)

If your home is in a newer neighborhood or master-planned community, it might be subject to MUD (Municipal Utility District) or PID (Public Improvement District) taxes.

These are extra line items that fund infrastructure like water lines, sidewalks, and parks — and they can add $1,000–$3,000 or more per year to your bill.

Always check your closing documents and tax estimate carefully to see if these apply.

4. Set Up Escrow (or Budget Yourself)

If you have a mortgage, your lender likely set up an escrow account — meaning they collect a portion of your taxes (and insurance) monthly and pay it for you.

✅ Peace of mind, no big surprise bill

❌ Your monthly payment may go up if taxes increase

If you're not escrowed, be sure to budget for your yearly tax bill. You don’t want a $7,000 invoice catching you off guard in the fall.

5. Watch Out for Reassessments After Purchase

Sometimes, when a home is sold, the county will reassess the value based on your purchase price. So if the seller had a $250,000 valuation and you paid $325,000… brace yourself for a bump.

That reassessment usually happens the following year — so make sure your Homestead Exemption is filed and keep an eye out for your appraisal notice.

Still Confused? Here’s What You Don’t Have to Do Alone

Property taxes in Texas aren’t the simplest thing — but you don’t need to figure it all out on your own. As a local realtor who’s helped dozens of families relocate to Mansfield, Fort Worth, and across Central Texas, I walk my clients through all of this step-by-step.

From catching hidden taxes in new developments to filing that first homestead exemption — I’ve got your back.

Let’s Make Texas Feel Like Home (Without Surprise Tax Bills)

Thinking of buying a home in Texas — or just bought and feeling overwhelmed? I’m here to help you make sense of it all.

Feel free to reach out with questions, or follow me for more real-world tips on navigating homeownership in Mansfield, the greater DFW area, and beyond.

You deserve to enjoy your home without feeling blindsided by the paperwork.

Post written by Michael Stephens from Living Local Texas.