How Do Houston Property Taxes Compare to Other Texas Cities?

Property taxes are one of the largest operating expenses for Houston landlords, and understanding how they compare across Texas metros helps you evaluate whether Houston still delivers competitive returns.

• Houston/Harris County: Effective rates of 2.0%–2.5% on investment properties. Without the homestead exemption, rental properties bear the full tax burden, which can exceed $5,000/year on a $250K property.
• Dallas/Tarrant County: Very similar at 2.0%–2.4%. Dallas and Houston are nearly identical in overall tax burden for landlords.
• San Antonio/Bexar County: Slightly lower at 1.8%–2.3%, and lower property values also reduce the dollar amount owed per property.
• Austin/Travis County: Rates of 1.7%–2.1%, but substantially higher property values mean larger total tax bills despite the lower percentage.
• The trade-off: Texas compensates for high property taxes with zero state income tax. For landlords, property taxes are fully deductible as a business expense on Schedule E, softening the blow.
• Protest strategy: Houston investors should protest their HCAD assessment every year. Over half of protests result in reductions, and you can hire a tax protest firm on a contingency basis (30%–40% of savings).

Bottom Line

Houston's property taxes are high but comparable to other major Texas cities. The absence of state income tax more than compensates for most investors, especially those building growing rental portfolios where operating expense deductions offset the burden significantly.