Property Taxes in Central Texas: What Every Home Seller Needs to Understand

Texas has no state income tax — but it has some of the highest property taxes in the United States, averaging around 1.6–2.0% of assessed value annually. For a $350,000 home in Williamson County, that's $5,600–$7,000 per year, or roughly $470–$580 per month. This reality shapes the finances of selling a home in ways that many sellers don't fully anticipate.

This guide covers what sellers in Austin, Round Rock, Georgetown, Killeen, and throughout Central Texas need to know about property taxes when planning a sale.

Property Taxes Are Prorated at Closing

In Texas, property taxes are paid in arrears — meaning you pay this year's taxes at the end of the year (typically by January 31st). At closing, taxes are prorated based on the number of days each party owned the home in the current tax year. The seller pays the portion owed for their time of ownership, and this amount is typically deducted from the seller's proceeds at closing.

This means that even if your taxes aren't currently due, you'll have a tax proration charge at closing. Make sure you factor this into your expected net proceeds.

What If You Have Delinquent Property Taxes?

Delinquent property taxes in Texas accrue significant penalties and interest — up to 12% penalty plus 1% per month in interest, plus an additional 20% penalty if the account goes to a collection attorney (which many counties do automatically). A $3,500 tax bill can quickly become $6,000–$7,000 with accumulated penalties.

The important news: delinquent taxes do not prevent you from selling your home. They are treated as a lien against the property and are paid off from your sale proceeds at closing, just like a mortgage. This is one reason why homeowners with delinquent taxes frequently sell to cash buyers — the speed of closing stops the penalty clock.

Homestead Exemption Considerations

Texas's homestead exemption reduces your property's taxable value for your primary residence. The state exemption is $100,000 off the appraised value (as of 2023 legislation), and many counties offer additional exemptions. When you sell your home, the homestead exemption is removed as of January 1st of the following year.

If you sell mid-year, be aware of timing relative to exemptions. Your tax professional can advise on the exact impact.

How High Property Taxes Affect Seller Motivation

High carrying costs are a significant factor in why many Central Texas homeowners choose to sell quickly rather than wait for the "perfect" offer. Holding a vacant or investment property costs real money every month — and in a state with no income tax but significant property taxes, those costs are front-loaded and unavoidable.

For homeowners in financial hardship, delinquent taxes are often a contributing factor in the decision to sell for cash. Home Key Cash Buyers is experienced in coordinating payoffs with county tax authorities at closing.

If property taxes are complicating your home sale — whether through delinquency, high carrying costs, or confusion about what you'll owe at closing — Home Key Cash Buyers can help clarify the picture. We work with the title company to coordinate all payoffs so you understand exactly what you'll net before you sign anything.