Buying a home in Texas

In most states the rules deciding what a house costs to hold, and what it can later be turned back into, sit in a tax code and a finance code that a legislature edits every session. Texas keeps the load-bearing ones in its constitution. That single structural difference explains more about buying here than any comparison of asking prices, because rules kept there cannot be shopped, cannot be waived by agreement, and do not move when a session moves. They move when the electorate amends them, and the electorate amended several of them at the most recent amendment election. It is also why a striking amount of what is published about Texas is quietly out of date.

How much may ever be borrowed against the house is settled before you own it

Begin with the constraint nobody arrives expecting, because it is not a lending practice and no lender can trade it away. Texas is the only state that limits cash-out refinancing by law, and the limit is constitutional rather than an investor overlay, so it cannot be waived by agreement (Texas Legislative Council, Texas Constitution, article XVI, section 50(a)(6)(B), read 25 August 2026)

What matters here is who holds the pen on that limit. A private ceiling can be argued with, shopped from one desk to the next, or reissued the week appetite changes. This one was put where only an amendment election reaches it, which is the same place the relief in the next section sits, and that single fact does more to shape a purchase than any of its mechanics. How the ceiling is measured, and what it is measured against, is the business of this site's Texas cash-out page and is deliberately left there. What belongs on a page about buying is the consequence: the far end of what this house will ever support was fixed before anybody made an enquiry, so it is not a term to negotiate and not a reason to prefer one lender over another.

The relief is constitutional as well, and it moved at the last election

The constitution runs in the owner's favour too. A residence homestead carries an exemption from school district taxation of $140,000 (Texas Legislative Council, Texas Constitution, article VIII, section 1-b(c), and Texas Comptroller of Public Accounts, read 25 August 2026), and any figure you have already read somewhere is worth checking against that one, because voters raised it at the most recent amendment election and a great deal of published comparison still prints the older number.

Two mechanics behind it catch buyers out, and the instructive thing about both is that neither is constitutional. The amount is fixed where only voters reach it; everything about getting hold of it sits in an ordinary tax code. It has to be claimed, with the county appraisal district, on a deadline falling before the first of May, because nothing attaches it to a deed. And in the year of a purchase it may already be spent, since the exemption belongs to the tax year rather than to whoever owns the house during it: whether any is left for a buyer is settled by whether the previous owner was already holding it for that year. How Texas sales divide between those two cases is not something this page knows, and it should not be guessed at in either direction.

The limit on how far the appraised value of a residence homestead may climb in a year behaves the same way and comes from the same place, which is a statute rather than the constitution. It does not begin at the closing table. It waits for the first of January of the year after the owner first qualifies for the exemption, which leaves the earliest bills outside it.

Full market value, every year, with no fraction taken off first

Against all of that sits the annual charge, taken on an unusually direct basis. Property is appraised at market value and assessed at the whole of that appraisal. There is no fractional ratio of the sort other states apply before the charge lands, and a purchase resets nothing, because every property is appraised again every year in any case.

Texas also publishes no single charge of its own, for the good reason that the state does not levy one. What reaches a parcel is the sum of separate taxing units stacked on the same ground: the county, the school district, the city, and whichever special districts happen to reach it, each setting its own. Summed across every one of them, the charge came to 1.858% (Texas Comptroller of Public Accounts, Tax Rates and Levies (Tax Code Section 5.091), read 25 August 2026) in the most recent tax year the Comptroller has published.

Be precise about what that measures, because the two obvious readings are both wrong. It is the whole levy divided by taxable value, meaning value after exemptions have already come off, not by market value gross of them. So it approximates what is actually charged. An owner holding no exemption has something close to it applied to nearly all of what the house is worth; an owner holding the homestead, the over-sixty-five or the disability exemption has it applied to less.

A house you do not live in receives none of it

A Texas rental is taxed on its full market value with none of the homestead reliefs. It gets no part of the $140,000 school exemption, because Tax Code Section 11.13(j)(1)(D) requires the property to be occupied as the owner's principal residence, and it gets no 10 percent appraisal cap, because Tax Code Section 23.23 applies only to a residence homestead. Texas takes nothing from the rent itself: article VIII, section 24-a of the constitution forbids a tax on the net incomes of individuals, and article VIII, section 24-b, added on 4 November 2025, forbids a tax on realized or unrealized capital gains. (Texas Tax Code Sections 11.13 and 23.23 via texas.public.law, and the Texas Constitution, article VIII, sections 24-a and 24-b, read 25 August 2026)

That divide is sharper than it first looks, because it removes both halves at once: the exemption that lowers the value charged, and the limit on how quickly that value may rise. A let property does not merely start above an owner-occupied one of the same worth; it climbs away from it, on a curve nothing about the building explains. What Texas conspicuously declines to reach is the rent itself, and that too is constitutional rather than a policy anyone could revisit in a session.

What this page cannot tell you, and the thing it must not be read as saying

The section above is a list, and a short one. Four named taxes on a transfer do not exist here, and on one of the four the constitution stops the legislature ever creating it: the constitutional habit once more, an absence put where a session cannot fill it. What that is not is a description of a closing. Nothing in the list reaches what a buyer actually hands over on the day, and a reader who takes the strength of the bar as a measure of how much ground it covers has read the wrong quantity off it.

The charge it can name is the recorder's: $25 (Harris County Clerk, Real Property fee schedule, read 25 August 2026) for the first page of a deed in Harris County, with a smaller charge for each page after it. The caveat on that figure is about its provenance rather than its size. Nothing on the county's fee page says when the schedule began to apply or when it was last touched, so the only day the amount can honestly be tied to is the one printed in the citation beside it, which is the day somebody opened the page.

Three further gaps belong in the open rather than buried. What it costs to insure a Texas house is not stated here, because the state's own published average of premiums actually paid and the ranges quoted by quote engines rest on bases that will not reconcile into one publishable number. What a buyer pays towards title insurance, and who ultimately bears it, is likewise unanswered: the constitutional provision usually cited for it permits such a tax, which is a statement about permission and not about who pays, and no source speaking to who bears the cost was read. And one county in the state cannot be computed at all on the basis used above, because it reported no adopted charge for the year, only a calculated one, which is why it sits inside the statewide figure and has no figure of its own.

Which suggests a different order of operations

The useful preparation for a Texas purchase is not a price comparison. It is two questions put to one county appraisal district about one specific address: which taxing units reach this parcel, and did the seller hold the homestead exemption this year. Neither is answerable at the level of the state, and between them they move the first year of ownership more than most buyers are braced for.

BEDRWay originates nothing and holds no licence to do so, in Texas or in any other state, and nothing on this page is an offer of credit or a prediction about what a lender will do. A request sent here is passed to a mortgage professional licensed where the property stands, and every question about what a particular household can actually do is theirs to answer.