Houston Property Taxes in 2026: Rates, MUD Taxes and What You'll Actually Pay

Property taxes come up in almost every conversation I have with buyers, especially people moving here from out of state. Texas has no state income tax, so local governments lean on property taxes instead. The rate you pay depends on exactly which taxing units your home sits in, and two houses a mile apart can have very different bills.

Here's how it works, what the 2026 rates look like and how I help clients compare homes before they make an offer.

How Houston property taxes are calculated

Your bill is your home's taxable value times the combined rate of every taxing unit that covers your address. Rates are quoted per $100 of value, so a rate of $2.14 means about 2.14% of taxable value.

The appraisal district (HCAD in Harris County, FBCAD in Fort Bend, MCAD in Montgomery) sets your value as of January 1. Your exemptions reduce that value for some or all taxing units. Then each unit, from the county to the school district to your MUD, applies its own rate.

2026 rates for a home inside Houston city limits

For a home inside the City of Houston and Houston ISD, these are the main pieces of the bill for the 2026 tax year:

Harris County's combined rate went up from $0.6241 to $0.6715 this year. The city held its rate flat, and Houston ISD's rate dropped from $0.8783 as a temporary post-Beryl increase expired.

Example: a $400,000 homestead inside the city

Using the rates above, the state's $140,000 school homestead exemption and the 20% local homestead exemptions that Harris County, the City of Houston and Houston ISD offer:

The same house without a homestead exemption (a second home, for example) would owe about $8,550. That $2,800 difference is why I remind every buyer to file for the homestead exemption right after closing.

What is a MUD tax?

A municipal utility district (MUD) is a local district that pays for water, sewer and drainage in areas outside city services, which describes most of suburban Houston. A developer builds the infrastructure, the MUD sells bonds to pay for it, and homeowners repay those bonds through a MUD tax on their property tax bill.

MUDs aren't a bad thing. They're how most of Katy, Cypress, Spring, Richmond and Fulshear got built. But they matter to your monthly payment:

• Five Harris County MUDs I checked had 2025 rates between $0.545 and $0.79 per $100. Rates across the region range from about $0.20 to more than $1.00.
• On a $400,000 home, a $0.70 MUD rate adds roughly $2,800 a year (a little less if the MUD offers a homestead exemption).
• Rates often drop as a district fills in and pays down its debt, but a newer MUD in a growing community may still have bonds left to sell.

Some newer master-planned communities also have a PID (public improvement district) assessment, and areas outside city limits may have an ESD tax for fire and EMS. Both show up as separate lines on the bill.

The MUD notice you should get before you sign

Texas law requires a seller to give the buyer a written MUD notice that shows the district's tax rate and debt when you sign the contract and again at closing (Texas Water Code §49.452). If you don't get it, you may have the right to terminate. I ask for it on day one so the numbers are in front of my clients before they're attached to a house.

Total rates in the suburbs

Suburban school districts usually carry higher rates than Houston ISD. Fort Bend ISD adopted $0.9969 for 2026-27, and Katy ISD proposed keeping its rate at $1.1171. Add the county, a MUD and sometimes a city or ESD, and the totals look like this:

Ranges before exemptions, as published by HAR. Your exact rate depends on the address.

A quick rule I use with buyers: every 10 cents of tax rate costs about $400 a year on a $400,000 home, or roughly $33 a month. So when two homes are priced the same but one carries a rate 50 cents higher, that's about $2,000 a year, or the payment on roughly $25,000 more house at today's rates.

When Houston property taxes are due

• January 1: the appraisal district values your home and determines your exemptions.
• April to May: appraisal notices arrive. The protest deadline is usually May 15 or 30 days after your notice, whichever is later.
• August to September: each taxing unit adopts its rate.
• October: bills go out.
• January 31: payment is due. Penalties and interest start on February 1.

Texas taxes are paid in arrears. When you buy, the seller credits you at closing for their share of the year from January 1 to the closing date, and you pay the full bill when it arrives. If you have a mortgage, your lender usually collects taxes monthly through escrow.

New in 2025: bigger homestead exemptions

In November 2025, Texas voters raised the school district homestead exemption from $100,000 to $140,000, and the extra exemption for homeowners 65 and older or disabled from $10,000 to $60,000, for a total of $200,000. The increase applied to 2025 bills.

Once your home has a homestead exemption, its taxable value can't rise more than 10% a year, even if the market value jumps more. Homeowners 65 and older also get a ceiling on school taxes.

How I help buyers compare homes

1. Pull the full rate for each address. I look up every taxing unit on the appraisal district site, not just the school district.
2. Ask for the MUD notice early and check the district's debt and rate history.
3. Estimate the bill with your exemptions, not the seller's. A seller who is 65 or older may have a frozen school tax that disappears when you buy.
4. Put it in the payment. We compare homes on total monthly cost, including taxes, insurance and HOA dues, not just price.

One more tip from experience: if you're comparing a house you love in a high-rate MUD with a similar house in a lower-rate area, run the numbers before you decide. Sometimes the cheaper house is the more expensive one.

Sources

• ABC13: Harris County adopts $0.6715 combined rate (Sept. 18, 2026)
• Hoodline: Houston keeps its rate at $0.519190 (Oct. 2026)
• Community Impact: Houston ISD 2026-27 rate of $0.8421
• Hoodline: Fort Bend ISD adopts $0.9969
• HAR: Houston property taxes and typical total rates
• Harris County Tax Office: tax rates by jurisdiction
• Texas Comptroller: property tax exemptions
• KWTX: Voters approve larger homestead exemptions (Nov. 2025)

Estimates use published 2026 rates and are for illustration. Your bill depends on your appraised value, exemptions and the taxing units at your address. This isn't tax advice.