Austin Property Taxes for Landlords (2026): Rates, the Expiring 20% Cap, and Deductions

Quick answer: an Austin rental (Travis County, Austin ISD) pays a combined property tax rate of roughly $2.07 per $100 of assessed value for tax year 2025 — about $9,300 a year on a $450,000 house — with no homestead exemption to soften it. City Council adopted another 3.5% city tax increase on August 12, 2026 for the coming year. The one break investors do get, the automatic 20% appraisal-growth cap on non-homestead property, is authorized only through the 2026 tax year. Details, entity by entity, below.

The Rate, Entity by Entity

Five taxing entities stack on a typical Austin rental (tax year 2025 adopted rates, per $100 of value): Austin ISD $0.9252, City of Austin $0.5240, Travis County $0.3758, Austin Community College $0.1279, and Central Health $0.1180 — a combined ~$2.07. Suburbs differ: Williamson and Hays County properties swap in different county, school, and MUD rates, which is why two “Austin” rentals ten minutes apart can differ by thousands per year. Your appraisal notice lists your exact entity stack.

What Changed in August 2026

On August 12, 2026, Austin City Council adopted a $6.6 billion budget with a 3.5% property tax increase — about $114 more per year on the average-value Austin home ($471,603), before utility and fee increases stacked on top. School, county, and community-college rates for tax year 2026 finalize through early fall. For landlords the direction of travel is the point: plan on the levy rising faster than rents, which have been flat to down — see our Austin rent price analysis.

Rentals Get No Homestead Exemption

Every headline about Texas homestead relief — including the $100,000 school-district exemption — applies to owner-occupied homes only. Your rental is assessed at full market value. This is the single most common surprise for new Austin landlords converting a former residence: the year the homestead exemption drops off, the tax bill can jump dramatically even with no rate change.

The 20% Investor Cap — and Its 2026 Expiration

The one structural break aimed at investors: the circuit-breaker limitation caps annual appraised-value growth at 20% for non-homestead property valued at $5.16 million or less. It applies automatically — no application — once you have owned the property for a full calendar year, and it resets to market value when a property sells. The catch: the Legislature authorized it only for tax years 2024, 2025, and 2026. Unless it is renewed, 2026 is its final year — underwrite 2027 and beyond without it.

Protesting Your Assessment

The Travis Central Appraisal District protest deadline is May 15 (or 30 days after your notice). The 2026 window has closed, which makes now the time to build the 2027 file: your closing statement if you bought recently, rent roll and vacancy history, repair estimates, and comparable sales. Rentals have protest angles owner-occupants lack — an income-based argument on top of the sales-comparison one. Our four-market protest guide covers the mechanics step by step.

What Landlords Deduct

Property taxes on a rental are fully deductible against rental income on Schedule E — a business expense, not an itemized deduction, so the SALT cap that limits your personal residence does not apply. They sit alongside insurance, management fees, repairs, mortgage interest, and depreciation in the standard Austin landlord deduction stack; our complete landlord deduction guide goes line by line. (We manage properties; we do not give tax advice — confirm your situation with a CPA.)

What This Does to Cash Flow — and What to Do About It

At ~$2.07 per $100, taxes on a $450,000 Austin rental run about $775 a month — frequently the largest single expense after the mortgage, and on many Austin properties more than a flat management fee and insurance combined. The levers you control: protest the assessment every spring, price rent against current data rather than last year’s (our rent-or-sell analysis runs the full math), and strip fixed costs where structure allows — which is exactly the argument for flat-fee management in a compressed-margin market like Austin. See how every major Austin manager prices in our best Austin property management companies comparison, or get an instant quote for your property.