O’Connor discusses how Texas has the ninth-highest property taxes in the nation.
HOUSTON, TX, UNITED STATES, February 17, 2026 /EINPresswire.com/ —
Texas has a reputation as a low-tax state. That is because the Lone Star State lacks an income tax, which is relatively rare, especially for large and prosperous states. With lax regulations, Texas has become a magnet for both established industries and emerging innovators. From traditional oil and gas to data centers, rural and urban Texas is a business paradise. The lack of income tax allows more Texans to keep their paychecks as well, giving even the average person solid savings.
This reputation falters when it comes to property taxes, however, and Texas has long been burdened with some of the highest effective property tax rates in America. This is because real estate taxes are needed to fund local governments, especially schools. Counties and MUDs also rely on this revenue stream exclusively. A recent analysis of U.S. Census data has revealed that Texas is not only in the top 10 when it comes to property taxes, but it is ahead of New York and California, the two most notoriously taxed states in the nation. O’Connor will break down what this means for Texans and how property owners can lower their taxes and taxable value.
States with the Highest Property Taxes
Illinois
New Jersey
Vermont
Nebraska
Connecticut
New Hampshire
Ohio
Iowa
Texas
New York
Most of the states in the top 10 are not surprising. New Jersey has been the No. 1 state for property taxes for years, and was just unseated by Illinois in 2025. Illinois is well-known for its many tax issues, budget boondoggles, and several other systemic problems. Connecticut, likewise, is famous for its exceptionally high property values and taxes. Taxes have become such an issue in Ohio that, like Texas, they are looking at eliminating property taxes entirely. California, infamous for its taxes, came in at No. 32.
Texas ranking higher than New York or California may come as a surprise, after all, New York City has some of the most expensive land on Earth and the surrounding counties, such as Nassau, Westchester, and Suffolk, have taxes even higher than the Big Apple. Likewise, California is renowned for its many taxes on income, sales, or various items. However, Texas has been slammed with property taxes for decades. As mentioned above, these are used in lieu of a state income tax, which means property owners must foot the bill for the majority of local funding. The median Texas tax bill is $4,108, which is around $900 more than the national figure. The effective tax rate in Texas is also much higher than the national average of 0.888%, topping out at 1.245%.
Incorrect Assessment is a National Trend
A trend across the nation that has been observed is the disconnect between real home values and what they are assessed or appraised at. At O’Connor focus on residential property tax in Texas, New York, Illinois, and Georgia, as well as commercial property tax across the country and have observed in each state that the true value of a home or business is often easily eclipsed by its taxable value. This means that property owners are being taxed more than what their real estate could sell for on the open market. For instance, a $350,000 home could be taxed as a $400,000 one, leading to a much higher tax bill. This is textbook unfair valuation and is one of the reasons that property taxes across the entire nation have increased at an unsustainable pace. Because of how common it is, property owners should always go over their appraisal notice when they receive it, as it is a great first step in understanding if they are being overvalued.
True Market Value vs. Appraised Value
One of the primary reasons for this gap is that appraisal systems lag behind market realities. During the pandemic, there was a huge boom in the buying of homes, especially in suburban areas outside cities like New York or Houston. This demand drove up the cost of homes across the board, but there were other factors as well. Supply chain issues made building materials more expensive, raising costs further. Labor also saw an increase, thanks to loss of life and lockdowns. All of these factors built upon what is commonly believed to be a housing bubble. The result was a large spike in prices across the nation for real estate, both residential and commercial. Between 2022-2024, property taxes were the fastest-growing tax in America, outstripping income and sales levies.
Since then, property values have cooled in some places, while some have heated up. However, taxes are stuck in the past, often still rising, even as tax rates fall. This is due to delayed appraisals still chasing the high from a few years ago. In essence, owners are being taxed for what their real estate’s value was in a booming market, instead of what it is now. Property taxes are based on the owners’ assessed value, not the market one, which means they are left holding the bag for the difference. Depending on location, this could mean that owners are being over assessed for tens of thousands of dollars, maybe more in high-dollar counties like Travis, Denton, or Fort Bend. This difference could cost owners hundreds or even thousands of dollars.
Consequences of Inaccurate Assessment
While higher property taxes are the main takeaway, having a large disparity between market and assessed value has other consequences. Mortgages and rents are both influenced by taxes, which can make life difficult for people trying to stay in their homes. As taxes increase, owners will find themselves paying a higher bill every month. If owners rent, the costs are instead passed on to them. When taken to a much greater scale, unequal appraisal can lead to an uneven tax burden across an area or county, where certain property owners pay much more for similar real estate. Appraised values being higher than the real worth of a home are also a key component of gentrification, acting as a threat to traditional families and neighborhoods.
Property Tax Appeals Counter Inaccurate Appraisal
As Texas property taxes continue to rise, many solutions have been put forward or put to use in the last few years. Texas saw a major improvement of the homestead exemption in 2023, with an even larger one in 2025. This was paired with an even larger jump in the homestead exemption for those over 65. However, these tax cuts only affected school taxes, leaving other levies untouched. Also, exemptions are only lowering overvalued taxes, masking the problem. Only property tax appeals can actually address the issue of inaccurate appraisal, by lowering the appraised value to something closer to what the market would pay. A disconnect between your appraised and market value is usually one of the strongest cases for an appeal or protest.
By utilizing a property tax appeal in Texas, owners can force their appraisal district to take a real look at their property, getting them to acknowledge what it is actually worth. For simple issues, informal appeals are often enough, and result in the majority of reductions across Texas. Formal appeals to the appraisal review board (ARB) are becoming more popular and necessary, and are the main arbiter for high-dollar counties like Travis and Galveston. These appeals follow informal protests and see owners compare their evidence with that of their appraisal district in front of a three-member appraisal review board. If these two routes fail, then owners may have the option of litigation, including binding arbitration and judicial appeals.
About O’Connor:
O’Connor is one of the largest property tax consulting firms, representing 185,000 clients in 49 states and Canada, handling about 295,000 protests in 2024, with residential property tax reduction services in Texas, Illinois, Georgia, and New York. O’Connor’s possesses the resources and market expertise in the areas of property tax, cost segregation, commercial and residential real estate appraisals. The firm was founded in 1974 and employs a team of 1,000 worldwide. O’Connor’s core focus is enriching the lives of property owners through cost effective tax reduction.
Property owners interested in assistance appealing their assessment can enroll in O’Connor’s Property Tax Protection Program ™. There is no upfront fee, or any fee unless we reduce your property taxes, and easy online enrollment only takes 2 to 3 minutes.
Patrick O’Connor, President
O’Connor
+ + +1 713-375-4128
email us here
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