Can Texas Eliminate Property Taxes? What Homeowners Need to Know in 2026

How Texas Could Eliminate Property Taxes: Is It Realistic or Just Political Talk?

 

For many Texans, property taxes feel like paying rent to the government forever. You buy the home, pay the mortgage off, and still owe thousands each year just to keep it.

That frustration has sparked a growing conversation across the state:

Could Texas actually eliminate property taxes?

The short answer: Yes, it’s possible.
The longer answer: It would require a major overhaul of how Texas funds schools, roads, police, fire departments, and local governments.

Let’s break it down.

Why Texans Are So Frustrated With Property Taxes

Texas has no state income tax, which is one reason many people move here. But that revenue has to come from somewhere.

Instead, Texas relies heavily on:

• Property taxes
  • Sales taxes
  • Business taxes
  • Fees and permits

Because home values have surged over the last decade, many homeowners have seen tax bills climb dramatically even if their income did not. That has made property taxes one of the hottest political issues in Texas. (Texas Comptroller)

Could Texas Eliminate Property Taxes Entirely?

Technically, yes.

But property taxes currently fund a massive portion of:

• Public schools
  • Counties
  • Cities
  • Emergency services
  • Roads and infrastructure
  • Libraries
  • Community colleges
  • Water districts

Replacing that revenue would require tens of billions of dollars annually. Multiple policy groups and lawmakers have floated different ways to do it. (The Texas Tribune)

5 Ways Texas Could Eliminate Property Taxes

1. Increase Sales Taxes

This is the most common proposal.

Texas could reduce or eliminate property taxes by raising sales taxes and broadening what gets taxed.

That means more taxes on:

• Services
  • Entertainment
  • Online purchases
  • Luxury spending

Supporters say it would shift taxes from ownership to consumption.

Critics say it would hit middle and lower income families hardest because they spend more of their income day to day.

Some economists estimate replacing all property tax revenue could require a much higher sales tax rate. (Houston Chronicle)

2. Use State Budget Surpluses

Texas has had large budget surpluses in recent years.

Lawmakers have already used surplus funds to:

• Raise homestead exemptions
  • Compress school tax rates
  • Provide tax relief packages

Some want to continue using future surpluses to buy down school property taxes over time. (Texas.gov)

The issue?

Surpluses are not guaranteed every year.

3. Cut Government Spending

Another path would be reducing spending at state and local levels.

That could mean:

• Smaller government budgets
  • Fewer services
  • Consolidation of departments
  • Slower infrastructure expansion

This is politically popular in theory but difficult in practice because Texans still expect roads, schools, and emergency response.

 

4. Replace School Taxes First

Many proposals focus first on eliminating the school portion of property taxes, not all property taxes.

That matters because school taxes are often the largest part of the bill.

Governor Abbott and others have supported versions of this idea. (https://www.kbtx.com)

This would still leave city, county, and special district taxes in place.

5. Cap Local Growth and Require Voter Approval

Instead of full elimination, Texas could limit tax growth by:

• Tight appraisal caps
  • Spending caps
  • Requiring voters to approve increases
  • More rollback elections

This may be the most realistic near term option.

What Would Happen If Property Taxes Disappeared?

Homeowners Could Benefit

Monthly affordability would improve.

For example, if a homeowner currently pays $8,000 yearly in taxes, eliminating that could significantly lower housing costs.

Home Prices Could Rise

If ownership becomes cheaper, more people may want to buy, which could increase demand and prices.

Renters Might Not Benefit Much

Landlords may save money, but rent reductions are never guaranteed.

Sales Taxes and Fees Could Rise

The money has to come from somewhere.

What Is Most Likely to Happen in Texas?

The most realistic path is not full elimination overnight.

Instead, Texas will likely continue doing:

• Bigger homestead exemptions
  • Lower school tax rates
  • State-funded tax relief
  • Appraisal caps
  • Gradual compression of property tax bills

That is already happening now. (Texas Comptroller)

My Honest Take as a Texas Realtor

Property taxes absolutely impact affordability, especially for families relocating to Texas who assume “no income tax” means cheap ownership.

Often, buyers are shocked when they see the yearly tax bill.

If Texas can responsibly reduce the burden while protecting schools and services, that would be huge for homeowners.

But eliminating property taxes entirely is far more complex than a campaign slogan.

Final Thoughts

Yes, Texas can eliminate property taxes.

But the real question is:

What are Texans willing to replace them with?

Higher sales taxes?
Reduced services?
State controlled funding?
Or a hybrid system?

The debate is only getting started.

Need Help Understanding Texas Property Taxes Before Buying?

If you're relocating to Texas or buying in San Antonio, understanding tax rates by area can save you thousands each year.

Some neighborhoods look cheaper upfront but carry much higher tax bills.

Reach out anytime if you want help comparing areas the smart way.