Texas Cities With the Lowest Property Taxes in 2026 (Top 15 Ranked)

Texas Cities With the Lowest Property Taxes in 2026 (Top 15 Ranked)

Which Texas Cities Let You Keep the Most of Your Money in 2026?

Texas has no state income tax, but it consistently ranks among the top ten states for property taxes, with an average effective rate of about 1.74% of assessed value according to reAlpha's 2026 state overview. On a $400,000 home, that averages roughly $6,960 per year. The spread, however, is enormous: a buyer in a Houston-area MUD community may face a combined rate above 2.8%, while a buyer in a low-MUD, low-city-levy jurisdiction can land under 1.6%. The difference on a $350,000 home is more than $4,200 per year.

TL;DR: The cities on this list carry combined 2026 effective property tax rates ranging from approximately 1.13% to 1.95%. Most sit outside high-growth MUD corridors, serve smaller ISDs, or benefit from unusually low county-level rates. A buyer relocating from a Houston-area MUD community to one of these cities can realistically save $3,000-$5,500 per year on a $350,000 home. The tradeoff is almost always some combination of longer commute, smaller school district, or fewer city services.

How Texas Property Taxes Are Actually Calculated

Your property tax bill is not one rate. It is the sum of every taxing entity whose boundary overlaps your parcel: the county, the city (if incorporated), the independent school district (ISD), any Municipal Utility District (MUD), Emergency Services Districts (ESDs), hospital districts, college districts, and navigation or drainage districts. The Texas Comptroller's Truth-in-Taxation portal publishes adopted rates for every entity statewide each year.

ISD taxes are typically the single largest component, making up 40-55% of a typical bill. That is why two homes in the same county but different school districts can have combined rates that diverge by 0.4% or more. MUDs add another layer: newly developed master-planned communities use MUD bonds to finance water, sewer, drainage, and roads. In a brand-new MUD, the rate can reach $0.80-$1.40 per $100 of value; in a mature MUD that has paid off most of its bonds, the rate can fall below $0.20.

The $140,000 school district homestead exemption (Senate Bill 4 / Prop 13, approved by Texas voters in November 2025) applies for the 2026 tax year and saves a typical homeowner roughly $1,230 per year in school taxes alone, according to Ballard Property Tax Protest's Harris County rate analysis.

Formula: (Appraised Value - Homestead Exemptions) / 100 x Combined Rate = Annual Tax

The Comparison Table: 15 Texas Cities Ranked by 2026 Combined Effective Rate

The table below ranks cities by their approximate combined effective property tax rate for a homesteaded residential property in 2026. Rates are the sum of all overlapping taxing entities. Sources include Texas Comptroller rate filings, SmartAsset county data, county appraisal district publications, and BKV Energy's 2026 Texas city comparison.

Rates are estimates based on 2025 adopted rates for each taxing entity; 2026 rates are certified in fall 2026. Always verify with the county appraisal district before closing.

Ranks 1-5: The Genuinely Low-Rate Cities

San Angelo (Tom Green County) -- Rate ~1.13%

San Angelo consistently posts one of the lowest combined effective rates among Texas cities with a population above 50,000. Tom Green County adopted a fiscal year 2026 rate of $0.47075 per $100, according to the Tom Green County Financial Transparency page. Combined with the city of San Angelo and San Angelo ISD, the all-in effective rate lands near 1.13-1.20%. Median home values hover around $180,000-$195,000, so even at 1.2%, a buyer pays roughly $2,200-$2,340 per year before exemptions.

Ownwell's San Angelo property tax trend data puts the median effective rate at 1.13%, slightly above the national median of 1.02% but far below the Texas average of 1.74%. The city has no MUD structure, so what you see on the county's certified rate schedule is what you pay.

Who it suits: Retirees on fixed income, remote workers who can live anywhere, investors seeking cash-flow-positive rentals. Tradeoff: West Texas location, roughly 3 hours from major airports, limited luxury amenities, smaller hospital network.

Wichita Falls (Wichita County) -- Rate ~1.30%

Wichita Falls posts a combined rate around 1.30%, well below the statewide 1.74% average. The county tax rate stays modest, the city's levy is competitive, and the Wichita Falls ISD rate has compressed steadily as the state increased its per-pupil funding contribution. Median home values near $155,000 mean an annual bill of approximately $2,015 before exemptions.

Who it suits: Budget buyers, out-of-state relocators from high-cost markets looking for cash. Tradeoff: Economy tied heavily to Sheppard Air Force Base; limited job diversification; distance from DFW (about 1.5 hours).

Lake Jackson (Brazoria County) -- Rate ~1.31%

Lake Jackson is the largest city in Brazoria County and benefits from the county's relatively moderate rate structure. Ownwell's Lake Jackson tax data shows an effective rate of approximately 1.31%, aligning with the state median but sitting well below Houston-area norms. The city's core neighborhoods predate the MUD era, so no MUD overlay applies to most residential parcels. Median home values near $260,000-$270,000 produce annual bills of roughly $3,400.

The Brazoria County Economic Development Authority confirms the county sales and property tax structure. Lake Jackson also offers a strong local economy anchored by Dow Chemical's Freeport complex, about 10 minutes south.

Who it suits: Petrochemical industry workers, remote workers, retirees who value coastal proximity without Galveston prices. Tradeoff: Gulf Coast hurricane exposure; flood insurance adds $1,500-$3,000 per year in higher-risk areas; limited major airport access (Houston is 65-75 miles).

Bay City (Matagorda County) -- Rate ~1.35%

Matagorda County's adopted county rate for 2024 was $0.34033 per $100, down from $0.42 in 2016, based on the Matagorda County Appraisal District's rate schedule. Bay City ISD adds approximately $1.01 per $100. Combined with the city levy and hospital district, the all-in rate comes to roughly 1.35%. Median home values near $165,000 produce a modest annual bill around $2,228.

Who it suits: Investors looking for coastal-adjacent rentals, retirees, buyers priced out of Houston. Tradeoff: Small job market; Bay City ISD does not carry a top TEA accountability rating; storm surge exposure as a coastal county.

Lubbock (Lubbock County) -- Rate ~1.50%

Lubbock's effective rate of approximately 1.50% makes it one of the most tax-competitive large cities in Texas. As noted in BKV Energy's 2026 Texas city comparison table, Lubbock County posts a competitive tax environment for a regional hub of its size. Texas Tech University anchors a stable economy and diversified rental market.

Who it suits: Investors building a rental portfolio near a major university, families relocating from higher-cost metros. Tradeoff: Distance from major metros; dry climate; Lubbock ISD accountability scores are mixed at the school level.

Ranks 6-10: Low-Rate Cities Within Commuting Range

Cedar Hill (Dallas County) -- Rate ~1.52%

Cedar Hill sits just south of the DFW metroplex and carries a combined rate near 1.52%, well below the DFW average of 2.0-2.4%. Per BKV Energy's comparison chart, Dallas County itself averages around 1.45%-1.49% effective, and Cedar Hill's school district and city levy stay close to that floor. Median home values near $295,000 make this one of the most affordable options with DFW access.

Who it suits: DFW commuters, first-time buyers, remote workers who occasionally need airport access. Tradeoff: Cedar Hill ISD accountability scores are acceptable but not top-tier; I-20 and US-67 traffic during peak hours.

The Woodlands -- Conroe ISD Zones (Montgomery County) -- Rate ~1.72%

This is the most notable anomaly in the Houston metro. The Woodlands Township levies only $0.1714 per $100 of taxable value. Mature MUDs within The Woodlands average just $0.07 to $0.17 per $100, reflecting decades of bond payoff. Combined with Conroe ISD ($0.9496), Montgomery County ($0.3770), Lone Star College ($0.1060), and the hospital district ($0.0497), the total for a home in an older Woodlands section lands near 1.72%, according to Ballard's Montgomery County rate breakdown.

That is remarkable for a master-planned community with top-rated schools, 200+ miles of trails, Town Center retail, and Medical Center proximity. SmartAsset's Texas calculator places Montgomery County at an average effective rate of 1.37%, the lowest among major Houston-area counties.

Who it suits: Families wanting top schools and amenities without paying 2.5%+ MUD-laden rates. Tradeoff: Traffic on I-45 during peak hours; some sections are in Tomball ISD (rates differ); flood exposure near low-lying creek areas.

Friendswood (Galveston County Side) -- Rate ~1.99%

Friendswood sits on both sides of the Harris/Galveston county line. On the Galveston side, residents pay Friendswood ISD ($1.03 per $100), City of Friendswood ($0.514172), Galveston County and road/flood ($0.325660), and the Galveston County Consolidated Drainage District ($0.115550), per the City of Friendswood official tax rate page. The total comes to approximately $1.985382 per $100, or about 1.99% effective. There is no MUD layer on the Galveston County side.

For context, a comparable home in a Harris County MUD community might pay 2.5-2.8%. The absence of a MUD rate is the key driver of Friendswood's relative advantage.

Who it suits: Families wanting a top-rated ISD (Friendswood ISD is consistently strong in TEA accountability), suburban lifestyle, and reasonable tax burden. Tradeoff: Flood risk is real -- roughly 2,800 homes flooded during Hurricane Harvey, per Rice University's Kinder Institute urban research; flood insurance is mandatory in high-risk zones and can add $2,000-$4,000 per year.

Fulshear / Fort Bend Unincorporated Areas -- Rate ~2.01%

Fulshear's municipal ad valorem rate is just $0.167903 per $100 for fiscal year 2025/2026, per the City of Fulshear's tax page. That is one of the lowest city levy rates in Texas for a growing suburb. The low city rate offsets higher ISD costs, but the combined effective rate for a Cross Creek Ranch or other newer Fulshear-area subdivision depends heavily on whether that parcel sits in a MUD. MUD-free lots in Fulshear's older sections can achieve a combined rate near 2.0-2.1%; lots inside an active MUD may run 2.4-2.7%.

Who it suits: Families seeking the lowest city levy in the Fort Bend area; buyers who can specifically target MUD-free parcels. Tradeoff: MUD status must be verified parcel-by-parcel before purchase; Fort Bend ISD is excellent but also drives a meaningful component of the rate.

Manvel / Iowa Colony (Brazoria County) -- Rate ~2.05%

Brazoria County MUDs in the Manvel and Iowa Colony areas are newer but benefit from a lower baseline county levy than Harris County. Per the investor-focused Houston property tax guide at eddieweir.com, Brazoria County combined effective rates run 2.10-2.60%, with lower-end rates achievable in MUDs where bonds are partially retired. Manvel/Iowa Colony sits toward the lower end of that range for established subdivisions.

Who it suits: Remote workers and families seeking newer construction at accessible prices with a lower-than-Harris-County tax floor. Tradeoff: Commute to Houston Medical Center or Downtown via TX-288 can exceed 45 minutes during rush hour; newer MUDs still carry active bonds.

The MUD-Free Zones Near Houston Sidebar

Municipal Utility Districts were created under Texas Water Code Chapter 49 to finance infrastructure in developing areas. They are not inherently bad -- they enabled the master-planned communities that define suburban Houston. But for buyers focused on total cost of ownership, MUD-free areas offer a structural tax advantage.

Where to find MUD-free residential parcels near Houston:

• Inside Loop 610 (Houston proper): Montrose, Midtown, Garden Oaks, Oak Forest, and older Heights sections have no MUD. The tradeoff is higher home prices and Houston ISD's levy.
• West University Place and Bellaire: Independent cities inside Loop 610 with their own levy structures and no MUD. Combined rates run 2.1-2.3% but benefit from very high home values that compress the effective rate on equity.
• Friendswood (Galveston County side): No MUD; confirmed above.
• Webster (older subdivisions, Clear Creek ISD): Homes built before the MUD era along I-45 carry no MUD rate; combined rate approximately 2.10%.
• Lake Jackson (Brazoria County core): Pre-MUD era city; confirmed above.
• Older Katy (City of Katy itself): The incorporated city of Katy proper has a city levy but no MUD in the original townsite; newer developments immediately outside city limits are a different story.
• Hempstead (Waller County): Small-town character, no MUD, Hempstead ISD; combined rate approximately 1.88%, one of the lowest in the broader Houston region.

To verify whether a specific parcel is in a MUD, search the Texas Comptroller's Property Tax Assistance Division database or request the tax certificate from the county appraisal district before closing.

Ranks 11-15: Under-the-Radar Options

Webster (Harris County, CCISD) -- Rate ~2.10%

Webster sits along I-45 south of Houston and benefits from Clear Creek ISD, one of the Houston area's consistently high-performing districts. Older neighborhoods predate MUD formation; combined rates in those sections run approximately 2.10%, roughly 0.2-0.4 percentage points below what a buyer would pay in a comparable Harris County MUD subdivision. Median home values near $285,000.

Lake Conroe Village (Montgomery County) -- Rate ~1.91%

This small lakeside community outside Conroe carries a combined rate of approximately 1.91%, per HAR's low-tax Montgomery County neighborhood breakdown. Homes range from $140,000 to $180,000, making it one of the few places within 60 miles of Houston where a buyer can achieve both a low rate and a low absolute tax bill.

Grand Lake Estates (Montgomery County) -- Rate ~1.91%

A gated community on Lake Conroe with larger homes ($500,000-$800,000) and a mature MUD where bonds are largely retired. The 1.91% combined rate is exceptional for a gated lakefront community and reflects the advantage of an older MUD structure.

Brookshire (Waller County) -- Rate ~1.95%

Brookshire is growing thanks to its position along I-10 west of Houston. Waller County's property tax structure stays relatively modest, and Brookshire proper has no high-rate MUD overlays in its established residential areas. Median home values near $240,000 produce bills around $4,680 before exemptions.

Hempstead (Waller County) -- Rate ~1.88%

Hempstead, the Waller County seat, carries one of the lowest combined rates within a 50-mile radius of Houston. The city has no MUD, Hempstead ISD's levy is moderate, and Waller County's own rate is well below Harris County. The catch: Hempstead ISD carries lower TEA accountability scores than premier Houston-area ISDs, and the town's job market is limited.

Tradeoffs: What Low Taxes Actually Cost You

Low property taxes are not free. Every rate reduction means less revenue flowing to local governments, and that shows up in ways that matter to homebuyers:

School district funding. Under the Texas school finance system, ISD revenue per pupil tracks closely with the local tax rate plus state equalization funding. ISDs with very low rates often receive more state aid, but the correlation between low-rate districts and lower TEA accountability ratings is real. Before choosing a city primarily for its tax rate, verify the ISD's most recent TEA rating at TEA's accountability website.

City services. A city levy of $0.17/100 (Fulshear) versus $0.51/100 (Friendswood) reflects a real difference in parks, roads, code enforcement, and public safety staffing. Smaller cities often contract out services or rely on county agencies.

Home insurance. Several low-tax cities -- Lake Jackson, Bay City, Manvel, Brookshire -- sit in areas with elevated wind/hail or flood exposure. Insurance costs can add $2,000-$5,000 per year, partly or wholly offsetting the property tax savings.

Commute time and vehicle costs. San Angelo, Wichita Falls, and Bay City are not suburban commuter cities. Remote workers are the primary beneficiaries of their tax rates.

Internal Links

For context on the homestead exemption that reduces your taxable value before any of these rates are applied, see our guide to the Texas Homestead Exemption. If your appraisal district overvalues your home, you can push back -- read about the Texas Property Tax Protest process. If you are buying in the Houston area and weighing MUD costs, our post on Texas Property Tax Going Up in 2026 breaks down the mechanics in detail.

Frequently Asked Questions

Does Texas have a statewide property tax?

No. Texas has no statewide property tax. Every tax rate is set locally by counties, cities, school districts, and special districts like MUDs and hospital districts. Your total bill is the sum of every entity whose boundary overlaps your parcel. The Texas Comptroller's Office oversees the truth-in-taxation process but does not set rates itself.

How much can a Texas property appraisal increase each year for a homesteaded property?

Under Texas Property Tax Code Section 23.23, the appraised value of a qualified homestead cannot increase more than 10% per year over the prior year's appraised value, regardless of market movements. This cap does not apply to new construction or properties that lost their homestead status. The 10% cap applies to the appraised value; the tax rate itself can still change, which is why bills can rise even when appraisal is capped.

What is a MUD and can I find out if a property is in one before making an offer?

A Municipal Utility District (MUD) is a political subdivision created under Texas Water Code Chapter 49 to finance water, sewer, drainage, and sometimes parks or amenities in developing areas. MUD tax rates appear on the county tax certificate. You can request a tax certificate from the county appraisal district or search the Texas Comptroller's entity rate database before making an offer. Your title company will also disclose all taxing entities during the title search. In Texas, the Property Code requires sellers to disclose MUD membership in writing before a contract is signed.

How does the $140,000 school homestead exemption passed in 2025 affect my tax bill in 2026?

Texas voters approved Proposition 13 in November 2025, raising the school district homestead exemption from $100,000 to $140,000. The exemption applies starting with the 2026 tax year. On a $350,000 home with a 2026 ISD rate of $0.9496 per $100 (Conroe ISD as an example), the exemption saves approximately $1,329 in school taxes alone, compared to a home with no exemption. Homeowners must have an active homestead exemption on file with their county appraisal district for the benefit to apply automatically.

What happens to property tax rates when a MUD retires its bonds?

When a MUD pays off its outstanding debt, the board typically reduces or eliminates the debt service component of its rate. The maintenance-and-operations (M&O) component may persist for ongoing infrastructure costs. In practice, mature MUDs in The Woodlands (Woodlands MUD #1 at $0.075/100) and Grand Lake Estates illustrate how rates compress over time from initial levels that can exceed $0.90/100 in a brand-new community. Buyers targeting low MUD rates should ask for the MUD's most recent annual audit and financial statements, which Texas Water Code Section 49.194 requires all MUDs to provide publicly.

Do low property tax rates hurt home resale value?

Not necessarily. In cities like San Angelo and Wichita Falls, low taxes are one of the explicit value propositions marketed to buyers, and the local market prices that feature in. In the Houston metro specifically, neighborhoods and communities within easy commuting distance that carry lower effective rates -- Friendswood, Webster, The Woodlands older sections -- tend to hold value well because buyers from higher-rate MUD communities recognize the ongoing savings. The risk is in remote, lower-service-level cities where the tax savings are offset by lower demand and slower price appreciation over time.

Find Your Low-Tax Home in Texas -- Talk to Erick Harbert

Property taxes are one of the most important long-term costs of Texas homeownership, and calculating the true combined rate for a specific parcel requires knowing every overlapping taxing entity. Erick Harbert of the Harbert Real Estate Group at Realty Right has helped buyers across the Houston metro and Greater Texas identify properties where the tax profile matches their long-term budget.

Call or text (281) 305-2520, email [email protected], or visit harbertgroup.com to request a personalized tax analysis for any address you are considering. The office is located at 6605 Cypresswood Dr Ste 300, Spring TX 77379. Before you sign a contract, know your full combined tax rate -- it matters more than most buyers realize until they get their first escrow adjustment.