Property taxes in Texas, and why they decide more than the down payment
Texas has no state income tax and some of the highest property tax rates in the country. For a first-time buyer that trade-off decides affordability more than the down payment does.
Why are property taxes so high in Texas?
Texas has no state income tax, and the shortfall is made up largely through property tax levied by counties, cities and school districts. The rate a buyer pays is the sum of several separate taxing entities rather than one state figure, which is why two houses a few streets apart can carry noticeably different annual bills.
How do property taxes change what you can afford?
A mortgage payment in Texas is rarely just principal and interest. Taxes and insurance are escrowed alongside it, and in much of the state they are a larger share of the monthly payment than buyers expect. Two homes at the same price can produce different monthly costs purely on the tax rate of the district they sit in.
Does down payment assistance help with property taxes?
No. Assistance changes what a buyer needs on day one. It does not change what the house costs every month. This is the single most common misunderstanding about these programs, and it is worth being clear about before anyone builds a plan around them.
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