Texas has no state estate tax, but you will pay property taxes on real estate you own

Texas does not charge an estate tax — a tax on the value of property someone leaves behind when they die. This is one of the few states with no estate tax at all. However, if you own real estate in Texas, you pay property taxes every year to your county or local taxing unit. These are separate from estate taxes and continue whether you own the property outright or still owe money on it.

Property taxes in Texas fund schools, county services, and local infrastructure. The tax rate and the amount you owe depend on the county where the property sits, the assessed value of the land and buildings, and any exemptions you may have. Unlike income tax, which Texas also does not have, property tax is unavoidable if you own real estate.

Key Takeaways

  • Texas has no state estate tax, so heirs do not owe a tax on inherited property based on its value.
  • Property taxes in Texas are paid annually to your county or local taxing unit and are based on the assessed value of the real estate.
  • Tax rates vary by county and can range from roughly 0.4% to 2% of assessed property value, depending on location and local services.
  • Homeowners may reduce their property tax burden through homestead exemptions, senior exemptions, or disability exemptions if they meet the requirements.
  • When someone dies, property taxes do not stop; the new owner or heir becomes responsible for paying them.

How property tax rates work in Texas counties

Each Texas county sets its own property tax rate, which is why the amount you owe varies dramatically depending on where your property is located. A county's rate is expressed as a dollar amount per $100 of assessed value — for example, $0.75 per $100 of value. Rates typically fall between $0.40 and $2.00 per $100, though some counties are higher or lower.

The county appraisal district assesses the value of your property, usually every year or every other year depending on the county. This assessed value is not the same as the market price you paid or could sell for; it is the district's estimate of what the property is worth. The tax you owe is the assessed value multiplied by the county's tax rate. If your home is assessed at $300,000 and your county's rate is $0.80 per $100, you owe $2,400 in property tax that year.

You can challenge the assessed value if you believe it is wrong. The appraisal district must send you a notice of value each year, and you have the right to file a protest with the appraisal review board. This process is free and does not require a lawyer, though you will need to provide evidence that the value is incorrect — such as a recent appraisal or comparable sales in your area.

Homestead exemptions and other ways to lower your property tax

A homestead exemption reduces the assessed value of your primary residence, which lowers the property tax you owe. In Texas, the homestead exemption typically reduces the assessed value by $25,000 to $40,000, depending on the county. Some counties offer higher exemptions. To claim a homestead exemption, you must own the property and live in it as your primary home on January 1 of the tax year.

You apply for a homestead exemption through your county appraisal district, usually by filing a form between January 1 and April 30. The district will notify you whether the exemption was granted. Once granted, the exemption typically continues each year unless you move or sell the property. If you are over 65 or disabled, you may be able to freeze your property tax at the amount you paid in the year you turned 65 or became disabled, so it does not increase even if your home's value rises.

Agricultural land and certain business property may also may have access to for tax breaks if they meet state requirements. Disabled veterans may receive an exemption on a portion of their home's value. The specific exemptions available and their amounts vary by county, so contact your appraisal district to learn what you may be able to claim.

What happens to property taxes when someone dies

When a property owner dies, the property does not automatically transfer to an heir, and property taxes do not stop. The executor of the estate or the person who inherits the property becomes responsible for paying the property taxes. If the property is in probate — the legal process of settling the estate — the executor typically pays the taxes from estate funds while the property is being distributed.

If the property is inherited through a will or by law (if there is no will), the new owner's name must be recorded with the county clerk and the appraisal district. Once the deed is transferred, the appraisal district will send tax bills to the new owner. The property tax bill does not change simply because ownership changed, though the new owner may be able to claim exemptions they did not have before — for example, if the heir is over 65 and the previous owner was not.

Property taxes are not forgiven or reduced because of death. If taxes go unpaid, the county can place a lien on the property or sell it at a tax sale to recover the money owed. This is why it is important for executors and heirs to keep property taxes current during the probate process.

The difference between property tax and estate tax

Property tax and estate tax are two separate things, and it is important not to confuse them. Property tax is an annual tax on real estate you own, paid to your county or local taxing unit. It is based on the assessed value of the land and buildings and continues every year as long as you own the property. Estate tax is a one-time tax on the total value of everything someone leaves behind when they die — including real estate, bank accounts, investments, and personal property.

Texas has no state estate tax, so heirs do not owe a tax to the state based on what they inherit. However, the federal government does have an estate tax, though it only applies to very large estates. In 2024, the federal estate tax applies only to estates worth more than $13.61 million, and that threshold changes each year. Most people in Texas will never owe federal estate tax.

Because Texas has no state income tax and no state estate tax, the main tax on real estate owners is the annual property tax. This is why property tax rates and exemptions matter so much to Texas homeowners and property investors.

How to find your county's property tax rate and pay your bill

Your county appraisal district sends a property tax bill each year, usually in the fall or early winter. The bill shows the assessed value of your property, the tax rate, and the amount you owe. You can also find your county's tax rate by contacting the appraisal district directly or visiting its website — most districts have online portals where you can look up your property and see the assessed value and tax amount.

Property taxes are typically due by January 31 of the year following the tax year. For example, taxes on 2024 property value are usually due by January 31, 2025. If you pay late, you owe a penalty and interest. Many counties allow you to pay online, by mail, or in person. Some allow you to set up automatic payments or pay in installments.

If you own property in multiple counties or have questions about your specific bill, contact the appraisal district in each county where you own land. They can explain the assessed value, show you how the tax was calculated, and tell you about exemptions you may be able to claim.

Frequently Asked Questions

Does Texas have an estate tax on inherited property?

No. Texas has no state estate tax. Heirs do not owe a tax to Texas based on the value of property they inherit. The federal government has an estate tax, but it only applies to estates worth more than $13.61 million as of 2024, and that threshold changes yearly. Most people will not owe federal estate tax.

Can I avoid property taxes by putting my house in a trust?

No. Property taxes are owed on real estate you own, regardless of whether the property is in your name, a trust, a corporation, or another legal structure. Transferring property to a trust does not change the property tax obligation. However, a trust can help with estate planning and may reduce probate costs when you die.

What if I disagree with the assessed value of my property?

You can file a protest with the appraisal review board. The appraisal district must send you a notice of value each year, and you have until a deadline set by your county to challenge it. You will need to provide evidence that the value is wrong, such as a recent appraisal or sales prices of similar homes. The process is free and does not require a lawyer.

Do property taxes increase when property is inherited?

Not automatically. The assessed value stays the same unless the appraisal district reassesses the property. However, if the new owner does not claim a homestead exemption that the previous owner had, the tax bill may go up because the exemption is lost. The new owner should contact the appraisal district to see what exemptions they may be able to claim.

What happens if property taxes are not paid?

If property taxes go unpaid, the county can place a lien on the property, and eventually the property can be sold at a tax sale to recover the money owed. Penalties and interest also accumulate on unpaid taxes. If you are having trouble paying, contact your county tax assessor or appraisal district to ask about payment plans or hardship options.