Understanding Property Taxes for New Builds in Texas

So, you’re thinking about buying a new home in Austin, Dallas, or Houston—three of Texas’s hottest housing markets? Great choice! But before you start picking out furniture and planning your housewarming party, let’s talk about a major factor that can impact your mortgage payment: property taxes.  And yes, we promise to make this as painless as possible.

Why New Builds in Texas Are So Popular

Texas is growing—fast. With companies and new residents flocking to Austin, Dallas, and Houston, builders are scrambling to keep up with demand. Buying a new construction home comes with some serious perks:

🏡 Modern designs & smart home tech – Say goodbye to outdated kitchens and hello to sleek, energy-efficient living.
⚡ Lower maintenance costs – Everything is brand new, so you (hopefully) won’t have to deal with major repairs anytime soon.
💰 Builder incentives – Many builders offer discounts, rate buy-downs, or even help with closing costs.

Sounds perfect, right? Well, before you sign that contract, let’s talk about property taxes—because they might just surprise you.

Property Taxes in Texas: What You Need to Know

Unlike some other states, Texas doesn’t have a state income tax. Great news! But, to make up for it, property taxes are higher than the national average.

Here’s how it works:

1️⃣ Your county’s appraisal district assesses your property value.
2️⃣ This value determines how much you owe in property taxes each year.
3️⃣ The revenue helps fund schools, roads, and public services.

💡 Heads Up: Property tax rates vary by city and county, so don’t assume your bill in Houston will be the same as in Austin, Dallas, or the various subdivision of Houston for that matter.

Why Your Property Taxes May Jump After Buying a New Build

Let’s say you just bought a gorgeous brand-new home. In the first year, your property taxes might seem surprisingly low. Why?

Because when you first move in, your tax bill may be based only on the value of the land (before the house was built). But in year two, the county reassesses the property—including your new home—and, surprise! Your tax bill jumps.

How Higher Property Taxes Affect Your Mortgage Payment

If your mortgage includes an escrow account, your lender collects property taxes along with your monthly payment. So, when taxes go up, your total mortgage payment goes up too.

🚨 Pro Tip: Budget for this potential increase so you’re not caught off guard when your escrow account adjusts.

How to Prepare for Rising Property Taxes

✅ Set aside extra cash – Don’t spend all your housewarming gift money just yet.
✅ Check your county’s tax rates – Knowledge is power!
✅ Talk to a mortgage expert – We can help estimate your future payments and strategize accordingly.  Be sure that your mortgage professional is not just a salesperson, but is transparent and honest.  If this is important to you, click HERE . 

Final Thoughts

Whether you’re drawn to Austin’s music scene, Dallas’s booming economy, or Houston’s cultural melting pot, buying a home in Texas is exciting—but understanding property taxes is a major key to making a smart financial move.

A little planning today can save you a lot of stress (and money) later.

Want Expert Help?

If you’re wondering how property taxes will impact your homebuying budget, we’ve got you covered.  📌 Click HERE to see how much home you can afford!