Why Property Taxes in Austin Have Gone Up

A lot of Austin homeowners are asking the same question right now:

“If home prices are coming down, why did my property taxes go up?”

It’s a fair question—and the answer isn’t obvious unless you understand how Texas property taxes actually work. Let’s break it down in a way that actually makes sense.

A Quick Look Back at Austin Home Values

From about 2012 to 2019, Austin home values increased at a healthy, steady pace. Then from 2020 through mid-2022, values didn’t just rise—they skyrocketed.

In just a few years, many homes gained an amount of value that would normally take a decade or more.

The Homestead Cap Changed the Timing — Not the Increase

If your home is your primary residence and you have a homestead exemption, Texas law limits how much your assessed (taxable) value can increase each year.

That increase is capped at 10% annually, even if your home’s market value jumps much higher.

For homeowners who owned their property before 2020, this meant taxable values were held back and lagged far behind true market value during the boom years.

Why Property Taxes Are Still Rising

Over the past couple of years, Austin home prices have softened. However, many homeowners are still seeing higher property tax bills.

The reason is simple: assessed values are still catching up.

Because taxable values were capped for so long, counties have continued increasing them at the maximum allowed rate. In many cases, assessed values remain below market value—even as prices cool.

This lag effect explains why property taxes have risen for so many homeowners despite changing market conditions.

Why This Year Might Finally Be Different

In a video we’ll be sharing in the coming weeks, we’ll explain why this year may mark a shift—and why protesting your property taxes may be worth the effort again.

For the first time in years, market values, assessed values, and buyer demand may be aligning in a way that benefits homeowners.

Have Questions About Your Home’s Value?

For more real estate insights like this, follow our page.
And if you have questions about your home’s value or your property tax assessment, send us a message—we’re always happy to help you make sense of the numbers.