By Mary Katherine McNabb

Texas taxpayers continue to be harmed by a rising property tax burden. This exorbitantly high burden, especially compared with other states, and the way it forces property owners to pay, make it nearly synonymous with an income tax.

The Tax Foundation recently released research on property tax rates for owner-occupied housing for each state. The metric used is the average effective property tax rate, which is the total amount of residential real property tax paid expressed as a share of total home value. Figure 1 shows that Texas’ rate of 1.90 percent ranks the 6th worst nationwide, and the worst in the south, with New Jersey having the highest at 2.38 percent and the lowest in Hawaii at 0.28 percent.

Figure 1: Texas’ Effective Property Tax Rate is too High

The Texas Comptroller created a 50 state scorecard, comparing the states on multiple metrics. Based on slightly different measurements, Texas ranks 48th worst for the median property tax rate and ranks 14th most punitive in the nation.

Figure 2: Texas’ Median Property Tax Rate is the 3rd Highest in the Nation


Texas taxpayers don’t have to pay an income tax like eight other states. However, the only other state that surpasses Texas in property tax rates but has no income tax is New Hampshire with a rate of 2.15 percent.

Property taxes continue to rise and in some cases, can outpace a homeowner’s ability to pay those taxes. And because property is based on a fixed asset, this increase in property tax rates don’t necessarily mean that the homeowner can afford it. This rise in cost and increasing burden on households can push owners into delinquency and ultimately cause them to lose their homes.

As taxpayers continue to pay rising property taxes, the remaining income for a household to spend or save decreases. In fact, it has become such a burden on incomes in Texas that the Census Bureau reported that for 2009, Texans forfeited 7.6 percent of their median income to pay for property tax. This number increased to 9.8 percent in 2013.

Texas should allow its citizens to keep a greater portion of its income instead of being forced to pay property taxes, allowing citizens to save and spend as they please.

The property tax burden could be aided in the short term by strengthening the rollback provision to require voter approval at the local level for an increase in the property tax by the lower of population growth plus inflation or 4 percent. The appraisal review process should also be reformed.

In the long run, the property tax should be replaced with a consumption-based tax. This would allow taxpayers to finally own their own home instead of paying rent forever to the government and provide a more efficient, discretionary tax to fund local government core functions.

This would create a more prosperous and free Texas.