How much house can I afford in Texas with no state income tax but high property tax?
Texas gives you a bigger paycheck (no state income tax) and a bigger property tax bill. For most Texas buyers, the county tax rate — not the headline loan rate — is what decides how much house fits your budget.
The Texas trade-off
Texas is one of a handful of states with no personal income tax. That puts more money in your paycheck, and it can mean more documentable income when you qualify. The state makes up the revenue through property taxes that are among the highest in the country. For a homebuyer, that shifts where the pressure lands: less on income, more on the monthly tax escrow baked into your payment.
How property tax drives what you qualify for
Lenders qualify you on PITI — principal, interest, taxes, and insurance — against your debt-to-income ratio. In a high-tax state, the “T” is large enough to move the answer. Two buyers with identical income and the same loan amount can qualify for different prices simply because one is buying in a higher-tax county.
| County (metro) | Approx. effective property tax rate |
|---|---|
| Harris (Houston) | ~2.15% |
| Travis (Austin) | ~2.10% |
| Dallas (Dallas) | ~1.85% |
| Tarrant (Fort Worth) | ~1.80% |
| Bexar (San Antonio) | ~1.75% |
These are approximate, blended effective rates and they change yearly — your actual rate depends on the specific city, school district, and any MUD or PID. The point stands: on a $400,000 home, the difference between a 1.75% and a 2.15% effective rate is roughly $1,600 per year, or about $130 a month of qualifying capacity.
The homestead exemption changes the math
Your primary residence qualifies for the homestead exemption, which lowers the taxable value the rate is applied to — $140,000 off the school-district portion in 2026. We model your payment with the exemption in place so your affordability number is realistic, not the inflated figure a generic calculator shows. See what the 2026 exemption saves you.
Loan limits in Texas
The 2026 conforming loan limit is $832,750 across every Texas county — the state has no high-cost designations, unlike coastal California or parts of Colorado. Above that, you're into jumbo territory, which has its own qualifying standards. For most Texas buyers in the major metros, the conforming limit is plenty of room.
Common questions
Does Texas having no income tax mean I can afford more house?
It can help, because more take-home pay and documentable income support a stronger application. But Texas property taxes are high and are counted in your monthly payment, so the net effect depends on the county tax rate where you buy.
Why does my Texas county matter for affordability?
Lenders include property taxes in your monthly payment and debt-to-income calculation. Because effective rates vary from roughly 1.75% to 2.15% across the major metros, the same loan amount costs more per month in a higher-tax county, lowering the price you qualify for.
What is the conforming loan limit in Texas for 2026?
$832,750 in every Texas county. Texas has no high-cost counties, so the same baseline limit applies statewide. Loan amounts above it are jumbo loans with separate qualifying guidelines.
How do I get an accurate Texas affordability estimate?
Use your real target county's tax rate and your homestead exemption, not a generic national calculator. We build the estimate on your actual numbers so the payment you plan for matches the payment you'll have.
How Mike + Cornerstone help
Most online calculators understate a Texas payment because they use a low default tax rate. We run your numbers with the real county rate and your homestead exemption, so the price range we give you is the one you can actually close on.
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This article is general information for Texas homebuyers and homeowners, not financial or legal advice, and is not a commitment to lend. Program figures are current as of June 28, 2026 and can change; we confirm the numbers for your specific situation. Equal Housing Lender.