Who Controls Property Tax Rates in Texas?
Texas property taxes are largely determined at the local level.
Different taxing units set their own tax rates, including:
- Cities
- Counties
- School districts
- Special districts
However, local governments don’t have unlimited freedom to raise property tax rates.
Texas law sets rules and limits that local taxing units must follow.
What Can Local Governments Do?
Local taxing units can generally:
1. Set Their Own Tax Rates
Cities, counties, school districts, and other taxing units adopt tax rates to help fund their budgets and services.
Those rates can vary significantly depending on where you live.
2. Hold Public Hearings
When certain proposed tax rates trigger statutory requirements, local governments may have to provide taxpayers with notices and opportunities to comment.
This gives property owners a chance to understand and respond to proposed tax changes.
3. Increase Property Tax Revenue Within Legal Limits
Local governments can increase revenue in certain circumstances, but Texas law provides rules governing how much they can increase property tax revenue without additional voter approval.
The applicable limit depends on the type of taxing unit and the circumstances.
What Can’t Local Governments Do?
Local governments cannot simply raise property tax rates however they want.
Texas law includes property tax rate limitations, voter-approval requirements, and other restrictions.
For example, certain tax increases above applicable limits can trigger an election or other requirements.
The exact rules vary by taxing entity, so homeowners should not assume the same limit applies to a city, county, and school district.
What Is the No-New-Revenue Tax Rate?
One important number homeowners may see is the no-new-revenue tax rate.
It is generally calculated to produce about the same amount of revenue from properties that were taxed by the taxing unit in the previous year, with adjustments allowed under Texas law.
This provides taxpayers with a useful benchmark when evaluating a proposed tax rate.
Simple example:
If property values increase throughout a city, keeping the previous year’s tax rate could generate more revenue.
The no-new-revenue rate is intended to account for that change when calculating the comparable rate.
Can a Local Government Still Raise Taxes?
Yes, but there are rules.
A local government may adopt a tax rate that generates more revenue in certain circumstances, but Texas law establishes procedures and limits.
Depending on the taxing unit and proposed increase, the process can involve:
- Public notices
- Public hearings
- Specific rate calculations
- Voter approval
This is why simply saying “Texas cities can’t raise property taxes” would be misleading.
The reality is more complicated.
What About Voter-Approved Bonds?
Bonds are another part of the conversation.
Voters can approve bonds to help fund projects such as:
- Schools
- Roads
- Public facilities
- Infrastructure
Bond elections can have future tax implications because the debt must be repaid.
However, the effect on a homeowner’s bill depends on the specific bond, taxing entity, property value, exemptions, and other factors.
Can the State Stop Local Tax Increases?
The state sets the legal framework that local taxing units must follow.
Recent Texas property-tax reforms and enforcement efforts have placed additional attention on local revenue growth, transparency, and tax-rate compliance.
This is why homeowners may see news about certain cities or other taxing units being restricted from adopting particular tax rates.
Why Your Property Tax Bill Can Still Increase
Even when a local government is limited in how much it can increase its tax rate, your individual bill can still rise.
For example:
Your taxable value increases → your bill may increase
or
Another taxing entity increases its rate → your total bill may increase
Your property tax bill can include several different taxing units, so one restriction does not necessarily control your entire bill.
What Should Homeowners Watch?
When reviewing your property tax bill, look at:
✔ Your appraised value
✔ Your taxable value
✔ Your exemptions
✔ School district rate
✔ County rate
✔ City rate
✔ Special district rates
✔ Any voter-approved measures that affect your area
Understanding these pieces can help you determine what is actually causing your bill to change.
The Bottom Line
Texas local governments have the authority to set property tax rates, but they don’t have unlimited authority to raise them.
State law establishes rate calculations, limits, transparency requirements, and in some cases voter-approval requirements.
At the same time, your property tax bill depends on more than one tax rate.
That’s why homeowners should look at both their property’s taxable value and the rates charged by each taxing entity.
