Texas Property Tax Rates - A Tale of Two Cities

[Cary O.]

Everything is bigger in Texas, including the high property tax rates. While those of you considering real estate investing in Texas are aware of this fact, some of you may be less aware of the wide variance in property tax rates from city to city, let alone across the state. Texas property tax rates are generally comprised of the following: 1) County tax, 2) City Tax, 3) School District tax (ISD), 4) County hospital, if applicable,  5) community college, if applicable, 6) Special districts/MUD, if applicable. The School district (ISD) tax typically contributes to 50% or more of the overall property tax rate. Generally, the larger the city (Dallas, Fort Worth, Houston, Austin, etc), the higher the overall effective property tax rate.  Here is a comparison of the property taxes on a $200k property for 2 cities in the Dallas - Fort Worth area below.  Can you purchase cash flowing investment properties in both cities?

City A		City B
$4,080		$5,700
2.04%		2.85%