Property taxes might not be the most exciting topic, but they can seriously impact your monthly mortgage payment—sometimes more than you’d expect! If you’re buying a home in the Austin area, you’ll notice tax rates aren’t the same everywhere. Some places have higher taxes, some have special exemptions, and it all adds up. So, let’s break it down in plain English so you can make the smartest move possible.
How Property Taxes Work in Texas
No State Income Tax = Higher Property Taxes
Since Texas doesn’t have a state income tax, property taxes help cover schools, roads, and emergency services. That means homeowners here tend to pay higher property taxes than in some other states.
How Your Property Taxes Are Calculated:
Appraised Value of Home × Local Tax Rate = Annual Property Taxes
Different counties, cities, and school districts set their own tax rates, so where you buy really matters.
Homestead Exemptions = Free Money
If you live in your home as your primary residence, you can apply for a homestead exemption to lower your taxable value. This can help save you a good chunk of change each year!
💡 Takeaway: Two homes with the same price tag can have totally different tax bills, depending on where they’re located.
Property Tax Rates Around the Austin Metro
| City/County | Approx. Tax Rate (% of Assessed Value) |
|---|---|
| Austin (Travis County) | ~1.97% – 2.20% |
| Cedar Park (Williamson County) | ~1.80% – 2.00% |
| Leander (Williamson County) | ~1.75% – 2.10% |
| Liberty Hill (Williamson County) | ~1.70% – 1.90% |
| Georgetown (Williamson County) | ~1.80% – 2.00% |
| Round Rock (Williamson County) | ~1.80% – 2.00% |
| Hutto (Williamson County) | ~1.90% – 2.30% |
| Dripping Springs (Hays County) | ~1.60% – 1.90% |
🛑 Why Do Taxes Vary So Much?
- Different cities and counties have different budgets for schools, roads, and emergency services.
- Some new communities (especially in places like Leander & Hutto) have MUDs (Municipal Utility Districts) that add extra taxes.
💡 Takeaway: Even a small tax rate difference can add up to thousands of dollars over time!
How Property Taxes Impact Your Home Purchase
Higher Taxes = Higher Monthly Payment
Your lender escrows property taxes, meaning your monthly mortgage payment includes a portion of your taxes. Higher taxes mean a higher payment!
Your Budget Might Stretch Further in Some Areas
A home in Georgetown with a lower tax rate could cost you less per month than a similarly priced home in Austin with a higher rate.
New Construction vs. Older Homes
- New homes often have higher assessed values and sometimes special taxing districts, leading to higher taxes.
- Older homes may have lower taxable values, which can help you save!
Tax Breaks & Discounts
- Homestead exemption lowers your taxable value (apply ASAP after you move in!).
- Over-65 & disabled veteran exemptions provide big tax savings if you qualify.
💡 Pro Tip: Always check a home’s tax history before making an offer—you don’t want surprises later!
How to Keep Property Taxes in Check
Compare Tax Rates Before Buying
If you’re deciding between, say, Cedar Park and Austin, knowing the tax rates can help you plan your budget better.
Appeal Your Property Value If It’s Too High
Home values are reassessed yearly—if you think yours is overestimated, you can file a protest to lower your tax bill.
Plan for Tax Increases in Fast-Growing Areas
Rapidly developing neighborhoods (like parts of Leander & Hutto) may see rising property values—and higher taxes over time.
Final Thoughts
Property taxes might not be the first thing you think about when buying a home, but they make a big difference in what you actually pay each month. Knowing the tax rates in different areas helps you make a smarter, budget-friendly decision.
Thinking about buying in Austin, Cedar Park, Leander, or another nearby city? Let’s chat about which areas fit your budget best!
📩 Need help finding the best place for your budget? Reach out—I’m happy to help!
