Issue #13 | October 1, 2026

You buy the house.

You make the mortgage payment every month for 30 years.

Then one day, you make the final payment. The lender releases its lien.

The house is finally yours.

Or is it?

If you want to find out who really owns your house just stop paying the property taxes.

Pay off the mortgage completely, then stop paying your property taxes and you'll discover something else: Texas law automatically attaches a tax lien to taxable property each year. That lien can ultimately be foreclosed and the property sold to satisfy delinquent taxes.

That raises an uncomfortable question:

What does it really mean to own your home “free and clear” if you can never stop paying for the right to keep it?

That's the strange reality hiding inside the Texas property-tax system.

The property sits inside nine separate taxing jurisdictions. Add their published rates together and they total approximately 3.35% before exemptions.

After applying the current $140,000 school-district homestead exemption, the estimated property-tax bill is approximately:

$21,500 a year.

That's almost $1,800 every month—before the mortgage, insurance, utilities, maintenance or HOA dues.

Texas has recently increased the school homestead exemption substantially, and qualifying homesteads also receive an appraisal limitation that generally prevents appraised value from increasing more than 10% per year.

That's meaningful relief.

But here's the problem.

Houses don't stay at today's value for 30 years.

Suppose this home's appraised value increased by just 5% per year—only half the maximum annual increase generally permitted under Texas's homestead appraisal limitation.

For illustration, leave today's tax rates and today's school homestead exemption unchanged.

Over a 30-year mortgage, the homeowner would pay approximately:

$1.48 MILLION in property taxes alone.

That's more than twice the original $686,230 price of the house.

By year 30, the annual property-tax bill under those assumptions would be approximately $93,000—or about $7,750 per month.

The mortgage eventually disappears.

The tax bill doesn't.

Important: This is an illustration of compounding, not a prediction. Tax rates, exemptions, laws and property values will change over 30 years.

Homeowners aren't the only people caught in this system.

Renters may never receive a property-tax statement, but the building they live in is still taxed. Property taxes are one of the expenses landlords must recover through the economics of owning and renting property.

The same principle reaches commercial real estate. The shopping center. The office building. The warehouse. The apartment complex. The restaurant's leased space. Property taxes become part of the cost of occupying that real estate.

Eventually increased costs find their way to the consumer. 

There's another reason changing this system isn't as simple as cutting a tax rate.

$256.4 BILLION in property tax-supported debt at the end of fiscal 2025.

Think about what that means. Today's property taxes aren't merely paying for today's government.

They're also paying for yesterday's promises.

Schools have been built. Roads constructed. Bonds issued. Interest promised.

Tax rates can be cut. Exemptions can increase. But the debt doesn't disappear.

That's usually where the conversation ends. Texas doesn't levy an individual state income tax, so the money has to come from somewhere. 

So maybe high property taxes are simply the price Texans pay for having no state income tax.

Except there's a problem with that explanation.

Nevada doesn't have an individual state income tax either.

Yet Nevada has built a very different system for homeowners.

Its primary-residence property-tax abatement generally limits how rapidly the tax bill itself can increase, rather than merely limiting growth in appraised value.

And Nevada made another fascinating decision decades ago.

When lawmakers considered how to increase funding for public schools, they explicitly concluded that the additional money should not be supplied by increasing property taxes.

Their alternative?

Tax retail sales.

Nevada's Local School Support Tax was specifically designed to provide another revenue stream for public education. The legislative finding remains written into Nevada law today.

That's the turn.

Texas and Nevada both operate without an individual state income tax.

But they made different choices about where government gets its money and how much of the tax burden falls on the property owner.

There is no magic tax system. Move the burden away from property and the money either has to come from somewhere else—or the government has to spend less… and we all know that will never happen!

But Nevada proves something important:

High residential property taxes aren't an unavoidable consequence of having no state income tax.

They're partly the result of how a state chooses to finance the government.

We are probably not going to redesign the Texas property-tax system.

But you can control how much you pay!

Before purchasing a home, don't simply look at the seller's current property-tax bill.

Find every taxing jurisdiction attached to the property and calculate the combined tax rate.

Two similarly priced houses only a few miles apart can carry substantially different tax burdens because they fall inside different cities, school districts, MUDs and special-purpose districts.

And don't assume the seller's current bill will become yours!

Their exemptions, appraisal history and other circumstances can make yesterday's tax bill a poor guide to what a new owner will eventually pay.

Finally, consider something almost nobody tells buyers:

Buy less house than you can afford.

A smaller, less expensive home will generally begin with a lower taxable value than an otherwise comparable larger, more expensive home. That gives future property-tax increases a smaller base from which to compound.

Before asking, “Can I afford this house?” ask, “Can I afford the property tax burden that comes with it?”

Because someday the mortgage will be paid off.

The property-tax bill never will be.