Protesting property taxes on a Texas rental

Why it matters more for rentals

Texas has no state income tax, so local governments lean heavily on property tax. On a typical rental it is often the largest expense after the mortgage. Rentals also do not get the homestead exemption or the 10% homestead cap on appraisal increases, so their values can rise faster than an owner-occupied home next door.

The 20% cap and why 2027 could be different

For tax years 2024 through 2026, Texas limited annual increases in the appraised value of most non-homestead real property, including many rentals, to 20%. The limit applied to property valued at about $5 million or less, a threshold adjusted each year. As written, that limit expires after the 2026 tax year.

If the Legislature does not extend it, a rental whose market value grew faster than its capped value could see a larger jump on its 2027 notice. The Legislature meets again in January 2027, and any change may need voter approval, so check the current status before you budget. Either way, the protest process is the same.

How the protest works

1. Read your notice of appraised value, which most appraisal districts mail in the spring. Check the property details, such as square footage, as well as the value.
2. File by the deadline: May 15 or 30 days after the notice is delivered, whichever is later. Most DFW appraisal districts accept protests online.
3. Submit evidence and ask for an informal review with an appraiser. Many protests settle here.
4. If you do not settle, you present your case at a hearing before the Appraisal Review Board. Further appeals, such as binding arbitration or district court, are available in some cases.

Evidence that tends to work

• Comparable sales. Three to six recent sales of similar homes nearby, adjusted for differences. Texas does not require sale prices to be publicly disclosed, so a real estate agent's sales data is often the best source.
• Condition. Photos and written repair bids for foundation, roof, plumbing, or other problems the appraisal district would not see from the street.
• Unequal appraisal. Texas law also lets you argue that your property is valued higher than comparable properties are appraised, not only higher than market value. This can work when neighbors' appraisals lag the market.
• Errors. Wrong square footage, a pool you do not have, or the wrong condition rating.

DFW appraisal districts

Doing it yourself or hiring help

Many owners protest on their own and do fine, especially with good comparable sales. Others use a protest service that charges a share of any savings. Apollo Advising refers clients to Ownwell through a partner referral page, and a referral fee may be paid to an affiliate of Denver McClure if you use it. You are never obligated to.

Ownwell partner page. See our disclosures.

Where we fit

When you are buying, we estimate the property tax on the price you will pay, not the seller's bill, because the appraisal district usually catches up. When you own, a higher tax bill can change whether keeping the rental still makes sense. See our Dallas-Fort Worth page for more local factors.

This page is general education, not legal, tax, investment, insurance, or lending advice. See our disclosures.