Texas is once again looking for ways to lower property taxes.
On Sept. 15, the House Ways & Means Committee is scheduled to study how to build on property-tax relief enacted by the Legislature, while Gov. Greg Abbott is promoting an affordability agenda that he says would save the average homeowner roughly $3,000 a year in property taxes.
But underneath the debate over how much Texans should pay is a thornier question: Who’s already carrying the burden?
Texas has the seventh-most regressive state and local tax system in the nation, according to the Institute on Taxation and Economic Policy (ITEP).
Property taxes are one reason why. Texas families in the bottom 20% of earners pay an estimated 4.5% of their income in property taxes, while families in the top 1% pay just 2.7%.
“You tend to ask a certain group of people, by that I mean lower and middle income households, to contribute larger shares of their income than wealthier households,” Neva Butkus, a senior analyst at ITEP, tells Realtor.com®.
And while policy debate is focused on making the property-tax bill smaller, they may obscure the real problem: how fairly the bill is being divided in the first place.
Gov. Abbott’s office did not immediately return a request for comment from Realtor.com.
Why Texas property taxes can work like a reverse income tax
Texas famously has no individual income tax—one of the features ITEP says drives the regressivity of its overall tax system.
“The no personal income tax is really like the nail in the coffin for states when it comes to regressivity,” Butkus says.
“Texans shouldn’t be taxed out of their homes,” Gov. Greg Abbott said in June while calling for an overhaul of the state’s property-tax system. Abbott has pushed for lower tax burdens and greater predictability in appraisals (Elvis Martinez-Cartagena/Fort Worth Star-Telegram/Tribune News Service via Getty Images))
The reason comes down to the capacity to pay.
A progressive income tax generally asks people with higher incomes to contribute a larger share of what they earn. Property taxes, meanwhile, tax the value of an asset, regardless of how much income its owner has available to pay the bill.
To understand how that can take a bigger bite out of middle- and lower-income households, consider two families in different income brackets.
A middle-class household earning $80,000 would need to spend roughly 4.6 times their annual income to afford a median-priced home of $365,000. While a family earning $744,000 a year—the threshold for the top 1% of earners in Texas—could buy a luxury home for $750,000 (about one year’s worth of income) in San Antonio.
Even in Austin, where luxury homes start at $1.3 million, it would take just under twice their annual income.
It’s an obvious enough observation on the surface, but it has far deeper implications.
“Middle-income households, their biggest source of wealth and net worth is their homes,” Butkus says. “That is not the case for the top 1%.”
For lower- and middle-income households, then, property taxes reach directly into the asset where much of their wealth is concentrated. And Texas’ recent housing boom has only made that mismatch even more consequential.
“Massive gains in paper wealth led to unaffordable property tax bills for fixed-income Texans,” says Joel Berner, senior economist at Realtor.com.
As home values rose, they did so without putting another dollar in its owner’s bank account. And even as prices have cooled from COVID-19 pandemic peaks, Berner says, appraisals have not necessarily adjusted downward at the same speed.
So even a perfectly administered property tax can be regressive, but that assumes the homes themselves are being taxed proportionally. And in Texas, that’s not always the case.
The same tax rate can hit cheaper homes harder
“A property tax is regressive when the taxes paid as a share of the home’s true market value are a higher percentage for lower-priced homes than for higher-priced homes,” Berner explains.
Marya Crigler, former chief appraiser of the Travis Central Appraisal District, says that makes the problem bigger than appraisal accuracy alone.
“It is a distribution-of-the-tax-burden problem,” she tells Realtor.com.
Crigler points to a $300,000 home assessed at essentially 100% of its market value and a $3 million home assessed at 70%. Even if both face the same nominal tax rate, the cheaper property is carrying a larger tax burden relative to its actual value—a phenomenon known as vertical inequity.
“When that disparity occurs systematically, the property tax system becomes regressive,” she says, adding that it’s also at odds with the standard written into Texas’ Constitution, which states that taxation must be “equal and uniform,” and property must be taxed in proportion to its value.
The University of Chicago’s Property Tax Fairness project looks for that kind of vertical inequity by comparing assessment-to-sale-price ratios at opposite ends of the market.
In Texas’ five largest counties—home to over 41% of the states’ population—lower-priced homes were assessed more heavily relative to what they sold for than homes at the top.
In Dallas and Bexar counties, the cheapest 10% of homes were assessed about 18% more heavily relative to their sale prices than the most expensive 10%. And those counties were hardly Texas’ worst: Both ranked among the 10 least regressive of the 193 Texas counties in the project’s data.
Texas’ comptroller urges caution in diagnosing vertical inequity. Its studies use stratification, verification and, when necessary, independent appraisals to build representative samples. Most appraisal districts fall within the accepted range on its price-related differential, a separate measure of unequal appraisal.
But there is one thing those safeguards cannot test: sales the state never sees.
“The Comptroller’s office does not have data regarding nondisclosed sales, therefore we are unable to test whether there are any systematic differences between disclosed and undisclosed sales,” the agency tells Realtor.com.
The blind spot gets bigger at the top
Texas does not require sale prices to enter the public record. Appraisal districts instead reconstruct the market from commercial databases, voluntary questionnaires, protest evidence and, where available, multiple listing service data.
And the information problem gets harder as prices rise, Crigler says.
“Sale prices are significantly more difficult to obtain and verify for high-value residential properties than for lower- and middle-priced homes,” she says.
Expensive properties tend to have fewer comparable transactions and often involve more complex or less transparent deals. Without mandatory disclosure, Crigler says, appraisal districts can struggle to develop “the same quantity and quality of market evidence” they have for more moderately priced homes.
Texas officials have been warning about that imbalance for nearly two decades.
A 2007 sales-price disclosure proposal warned that unavailable prices for commercial and high-end residential properties had shifted the tax burden toward owners of moderately priced homes. Texas never adopted the requirement.
A Legislative Budget Board review similarly found that appraisal districts frequently had adequate sales information for low- and middle-priced homes, while chief appraisers reported insufficient information for high-priced residential properties.
Bexar County provides a stark example. Former Chief Appraiser Michael Amezquita said in 2020 that the district was obtaining sale prices for only about 30% to 35% of deed transactions, with better information lower and in the middle of the market than at the top.
“This situation shifts the tax burden to those owners in the middle to low end disproportionately,” Amezquita wrote. “I think that is inherently unfair.”
And an information gap can outlast the year in which it occurs.
Texas generally limits annual increases in the appraised value of qualifying residence homesteads to 10%. Crigler says that means a high-value home that becomes substantially underappraised before better information arrives can’t necessarily snap immediately back to its full taxable value.
“An information gap that initially produces an undervaluation can become embedded in the tax base and persist for many years,” she explains.
Private listings might be making it worse
The information gap at the top of Texas’ housing market has another potential pressure point: private and off-MLS sales.
In a state where sale prices are not publicly disclosed, the MLS can provide appraisal districts with information they might not otherwise have. But when a transaction doesn’t reach the MLS, that source can disappear, too—leaving the sale price absent from both the public record and another vital source appraisers might reference to understand the market.
And once again, the overlap is especially consequential at the high end.
A 2025 analysis by Austin brokerage Berbas Group estimated that off-market transactions became more common as neighborhood prices rose, increasing from about 15% of sales near the median price point to 30% or more in luxury and ultraluxury markets.
It’s important to note that this isn’t proof that every private sale remains invisible to appraisal districts, or that off-MLS sales cause expensive homes to be underappraised. But it does point to yet another avenue for market information to disappear precisely where appraisal districts already report having the least of it.
And when that information is missing when values are set, Crigler says, it may not surface until later—during protests, settlement negotiations, or litigation.
That brings the two disparities in Texas’ property-tax system together.
Higher-income Texans already pay a smaller share of their income in property taxes. And when high-value homes are assessed at a smaller share of their true market value than cheaper homes, their owners can benefit a second time: They are being taxed on less of the value they actually own.
And as Texas debates another round of property tax relief, that may matter more than ever.
Abbott himself has called for an overhaul of the appraisal system. “Spiking appraisals and local government tax hikes are wiping out the savings of hardworking Texans,” he said while outlining his property-tax agenda.
But the appraisal problem can run in both directions. An appraisal that rises too quickly can burden a homeowner. An appraisal that remains too low can shift part of that homeowner’s share of the tax base onto everyone else.
Butkus explains: “When you’re cutting those types of property taxes, you are just typically cutting it for a very specific type of person, which is a homeowner,” she says, “and everybody else picks up the bill in other ways.”
Texas can make property-tax bills smaller. But unless it also addresses who is carrying too much of the bill already, the state risks preserving a system that can favor wealthier Texans twice.