Austin Residents Pay Among Texas's Highest Property Tax Rates Despite Relief

Several bills moving through the Texas Legislature's ongoing review cycle are reshaping how much Austin homeowners and renters pay, how local schools are funded, and what city services can cost. The legislation most directly affecting daily life in Travis County is the property tax reform package anchored by Senate Bill 2, which caps annual appraisal increases for non-homestead properties at 20 percent and expands homestead exemption floors. The Texas Comptroller's bill tracker, updated through the current legislative calendar, shows Austin sitting in the middle tier of major Texas cities for net relief delivered to residents, behind San Antonio and Fort Worth but ahead of Houston on some measures.

The timing matters because Travis County's median home value crossed $550,000 in 2025, according to the Travis County Appraisal District's certified roll, giving Austin homeowners a larger dollar exposure to appraisal swings than almost any peer city in the state. When appraisals climbed an average of 24 percent in 2022, the 20-percent cap that SB 2 now codifies would have saved the typical Austin homeowner roughly $300 in that single year on their city and county levy alone, before school district rates are factored in. That figure is lower in San Antonio, where median values run closer to $280,000, meaning the same percentage cap delivers a smaller absolute-dollar benefit to Travis County residents relative to their overall burden.

How Austin's Numbers Stack Up

The Texas Legislative Budget Board's fiscal note for SB 2 projects statewide property tax relief of approximately $18 billion over two biennia, distributed through a combination of compression of school district maintenance-and-operations rates and the expanded exemption. Austin's share, as estimated by the Austin Independent School District's own budget office in its fiscal year 2026 planning documents, amounts to roughly $90 million in reduced M&O collections that are backfilled by state general revenue. Dallas ISD receives a projected $140 million backfill, reflecting the larger district enrollment. The practical effect for an Austin household with a homestead exemption is a combined city-county-school effective rate expected to drop from approximately $1.97 per $100 of valuation in 2024 to around $1.80 by 2026, assuming the Comptroller's projections hold.

House Bill 5, the economic development incentive measure that restructures the Chapter 313 school value limitation program, adds another dimension. Austin has historically been aggressive in using 313 agreements to attract semiconductor and data-center investments, and local economic development analysts note that the replacement framework under HB 5 imposes stricter wage floors and job-count minimums. A facility qualifying under the old program could receive valuation limits with a $500,000 minimum wage requirement per job; the new structure raises that bar and ties continued eligibility to annual third-party audits. Cities like Round Rock and Cedar Park, which compete directly with Austin for corporate relocations inside the metro, face the same rules, but their lower base tax rates give them a structural cost advantage that the new incentive framework does not erase.

What Austin Residents Should Watch Next

The Austin City Council is expected to adopt its fiscal year 2027 budget in September, and council members have said publicly that the state-driven compression of school rates creates some room to address the city's own levy without cutting services, though no formal proposal has been filed. The Comptroller's office is required under SB 2 to certify each taxing unit's compliance by October 1 of each year, meaning Travis County's appraisal district and the city both face hard deadlines that will determine whether relief checks reach homeowners before the end of calendar year 2026.

Renters are less directly protected. Policy analysts who track housing affordability in Texas note that the 20-percent non-homestead appraisal cap applies to apartment complexes, but landlords are not legally required to pass savings through to tenants, and Austin's vacancy rate has ticked up to roughly 8 percent in 2025, giving the market some, though not unlimited, downward pressure on rents. Advocacy groups including the Austin Tenants Council have been pushing for a local ordinance tying rent increases to verified appraisal outcomes, but state law significantly limits what the city can mandate in that area. The next committee hearing on HB 5 implementation rules is scheduled for late July in Austin at the Texas Capitol.