Texas Among Worst States for Property Tax

Texas has a reputation as a low tax state, but that billing doesn't hold up in one category---property taxes. According to a new report by the personal finance site WalletHub, Texas ranks 46th among states for effective real estate property tax rate. "Texas is among the ten most expensive property tax states...right now the effective real estate tax rate (in Texas) is about 1.9 percent, and most states are below the one percent mark," says Jill Gonzalez, WalletHub analyst. "That means that come tax time, the average Texan pays at least $2700 to the state in property taxes alone."

The news isn't all bad for Texas homeowners. The state's average home price is around $150,000, well below the national average of about $185,000. "That's the good news, that real estate in general tends to be cheaper in Texas," says Gonzalez.

As for why property taxes are so high in Texas, it may be due to that "low tax" reputation in other areas. "The main reason that Texas does have such a high effective real estate tax rate is because it does not have a personal income tax," says Gonzalez. "So (Texas) leans a little bit more on its property taxes than a lot of other states."

Many Texas leaders are looking to change that and get the state to lean a little less on property taxes. Gov. Greg Abbott has proposed a cap on property tax revenues, a plan also supported by Lt. Gov. Dan Patrick. Houston State Senator Paul Bettencourt has also been a vocal proponent of property tax reform. Bettencourt notes that property taxes in Harris County have increased 37 percent in just the last four years.

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