Austin’s property tax rate is up 31% since 2017

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Austin’s property tax rate has reached its highest point in at least a decade, capping years of swings driven by property values and the city’s growing spending needs.

The new rate of 57.99 cents per $100 of taxable value is roughly 31% higher than the city charged in 2017.

Austin City Council approved its new $6.6 billion budget and the increased tax rate Wednesday after hours of sometimes-heated debate over which departments should face cuts, which programs should receive additional funding and how much the city should raise taxes to pay for new initiatives.

The city’s property tax rate has not climbed in a straight line. As home values surged during the pandemic, Austin lowered its tax rate because rising appraisals generated more revenue. As property values leveled off, however, slower growth in the tax base meant a higher tax rate was necessary to meet the city’s growing budget needs.

All but two council members voted for the budget. Mayor Kirk Watson and Council Member Marc Duchen opposed it, arguing the City Council should have shown more financial restraint and softened the impact on taxpayers at a time when many are grappling with higher costs and stagnant wages.

“Are we even in a budget deficit?” Duchen asked. “I didn’t see a reflection of how much time we spent talking about adding things to the budget, and how little time we spent talking about scrutinizing (it), or what could have been lower priorities for us to consider.”

The new budget is the first adopted since the historic loss of Proposition Q, the measure which would have raised the city’s property tax rate by about 20% to fund parks, social programs and emergency services. Because of a 2019 state law, cities generally must seek voter approval to increase property tax revenue by more than 3.5%.

Duchen argued a more conservative budget was called for after last year’s defeat, which has been viewed as a message from voters that property taxes were becoming unaffordable and that residents were losing faith in how the city manages taxpayer dollars.

“Voters are in a different place right now,” Duchen told the Current. “They’re being squeezed, and they’re not seeing us respond to that at all.”

An Austin Current analysis found the city’s property tax rate increased 31% since 2017, despite fluctuating over the past decade as Austin’s housing market and tax base evolved. Holding a home’s taxable value constant, the city’s higher tax rate means a homeowner with a $400,000 property would pay about $550 more in city property taxes than they would have in 2017.

Duchen said if the city does not get serious about restraining property taxes and other costs, more people will choose to live in surrounding cities and counties instead of Austin.

“What people are doing is they’re desperately filing protests to keep their home values lower so they can afford to stay here,” Duchen said. “They’re moving in droves.”

Duchen also pointed to the city’s general fund, its primary operating fund for parks, social service programs and public safety, as another measure of expanding government spending. The general fund has grown about 55%, from about $970.6 million in 2017 to $1.5 billion in fiscal year 2027.

Jose Melendez, a tax expert at the Texas Public Policy Foundation, a conservative think tank, said state lawmakers in both parties have supported legislation in recent years aimed at providing property tax relief.

There’s been a lot of discussion surrounding “how can we get people into homes,” Melendez said. “On top of that, you also have to make sure that they stay in those homes.”

Melendez pointed to recent efforts in the Texas State Legislature that would further limit how much cities can increase property taxes without voter approval. Lawmakers considered legislation in 2025 that would have lowered the threshold for cities with more than 75,000 people from 3.5% to 2.5%, an idea he said could resurface in a future legislative session.

“We’re looking at everything under the sun we can do to get at the affordability problem.”