Texas

Overview

Texas has no land value tax, no split-rate property tax and no official study of either. Its Georgist record is a single episode, the Houston Plan of Taxation, which was struck down in 1915 under the state constitution. Two features of current Texas law shape any reform argument today: a constitutional rule that real property be taxed in proportion to its value, and a statutory limit on how fast a city's operating property-tax revenue can grow without a vote of the people. Both are state rules, so this page treats the state as the unit and uses Austin as a worked case.

The Constitutional Barrier

Article VIII, section 1 of the Texas Constitution opens with "Taxation shall be equal and uniform" (subsection (a)). Subsection (b) provides that real property and tangible personal property, unless exempt, "shall be taxed in proportion to its value, which shall be ascertained as may be provided by law."[1]

The Tax Code implements this on a single basis. Property is appraised at market value as of January 1 (§23.01), and "all property shall be assessed on the basis of 100 percent of its appraised value" (§26.02).[2][3] Nothing in those provisions lets a taxing unit set a different fraction or rate for land than for buildings.

The 1915 ruling in Baker v. City of Houston, which struck down the Houston Plan under the proportionality language, is told on that page; the language remains in the current constitution.

As a statement about the text, a land-only or split-rate tax levied by Texas local governments would assess land and improvements on different bases from each other, which §26.02 and Article VIII, section 1(b) do not on their face permit. No court or state body has tested whether a modern design, such as the building exemption discussed for Washington State, could be fitted within the clause.

The 3.5 Percent Revenue Cap and Tax-Rate Elections

Under Tax Code §26.04, a city's voter-approval tax rate is its no-new-revenue maintenance-and-operations rate multiplied by 1.035, plus its current debt rate and any unused increment rate.[4] The practical effect is a 3.5 percent annual ceiling on operating revenue from property already on the rolls; new construction is outside it, and debt service is added on top.

Under §26.07, a municipality of 30,000 or more that adopts a rate above the voter-approval rate must submit it to voters at a November election. If the proposition fails, the rate for that year is the voter-approval rate.[5]

These provisions come from Senate Bill 2, the Texas Property Tax Reform and Transparency Act of 2019, which the governor signed on 12 June 2019 and which took effect in the relevant sections on 1 January 2020.[6][7] Press coverage describes the previous ceiling for cities as 8 percent.[8]

A Worked Austin Example

The budget. The City of Austin's approved FY2026-27 budget sets the General Fund at $1,543,720,835. Property tax supplies $743.9 million of it, 48.2 percent of General Fund revenue, within total property-tax revenue of $1,282.5 million; the remainder goes to Project Connect transit, debt service and tax-increment zones. The approved overall rate is $0.579948 per $100 of value, against $0.524017 the year before, and equals the city's voter-approval rate.[9]

Proposition Q. In November 2025 Austin put to voters, under Ordinance 20250813-010, a rate of $0.574017 per $100, which was $0.05 above the voter-approval rate.[10] The proposition failed on 4 November 2025 with more than 63 percent voting against, according to election-night counts reported by Community Impact; those totals were unofficial pending canvass.[11] KUT's reporting described the margin as roughly two to one.[12] Austin's FY2026-27 rate was then set at the maximum allowed without voter approval, and a council policy bars seeking a larger increase until at least 2029.[13] Appraisal-district projections reported in April 2026 had Travis County taxable value in Austin falling 3.1 percent to $210.6 billion in 2026, after a 2.7 percent fall in 2025, with new construction adding $2.8 billion against a peak of nearly $5.5 billion two years earlier.[8]

Two parcels. The Travis Central Appraisal District's 2026 certified values allow a concrete comparison.[14]

Land value per acre is nearly equal (a ratio of 1.07), while tax per acre differs by about 6.2 to 1, because the tower's improvements are taxed along with its land. The parking lot's improvement record is a paved area.

The comparison originates with Ryan Puzycki, who writes the City of Yes newsletter on Austin urbanism; the appraisal records carry the figures.[15] He also illustrates a pure land value tax on the pair at roughly $650,000 and $610,000 per acre. Those figures equal-weight the two parcels per acre. Weighted by actual acreage, a revenue-neutral land-only tax on the pair would come to about $814,000 and $764,000 per acre; the qualitative point, near-equal bills for near-equal land, holds either way.

TCAD already carries separate land and improvement values for each parcel, which bears on the objection that land cannot be assessed; those land values are mass-appraisal estimates, not individual site valuations. The pair also illustrates speculative vacancy in its under-use form, though two parcels are an illustration, not a sample.

Evidence from Texas

Plummer (2010) simulated a revenue-neutral land value tax on Tarrant County (Fort Worth) parcel data for 1997 to 2006. Average single-family tax liability fell by roughly 30 percent, with the burden moving to commercial, utility and especially vacant land; the effect on progressivity within residential property was slight. It is a simulation on one county's assessment roll, not an implemented policy.

Nuances and Limits

• No Texas jurisdiction has adopted or officially studied a land value tax or split-rate tax since 1915.
• The Austin comparison is one pair of parcels, not a citywide estimate; effects on homeowners would need parcel-level modeling of the whole city.
• The parking lot is identified by matching the published per-acre figures to the appraisal district's records, since the original post does not name the parcel. It is a lot in the same downtown district; its position relative to the tower has not been confirmed.
• The Prop Q margin is from election-night counts and not from the certified canvass.
• The Tax Code text cited is a third-party mirror current to May 2025, not the official code; later amendments have not been checked.
• The per-acre tax uses the no-new-revenue rate and counts only the city's levy; at the adopted rate the parcels would pay about $1.17M and $190k per acre, with the ratio unchanged.

See Also

• The Houston Plan of Taxation (1912-1915) — the 1915 ruling under the same constitutional language
• Houston, Texas — the city's land-use regime (no zoning)
• Plummer: Distributional Effects of a Land Value Tax — the Tarrant County simulation
• Center for Land Economics — the parcel-modeling nonprofit behind land-tax simulations in other US cities
• Split-Rate Taxation — the design a Texas reform would have to adapt
• Washington State — another state where a constitutional clause shapes the reform path

Sources

1. Texas Constitution, Article VIII (Taxation and Revenue), §1, Texas Legislative Council official text. statutes.capitol.texas.gov — used for "Taxation shall be equal and uniform" and the "taxed in proportion to its value" clause (A-claim, primary).
2. Texas Tax Code §23.01, via the Texas.Public.Law mirror (current to 26 May 2025; not the official code). texas.public.law — used for market-value appraisal as of January 1 (A-claim, primary text via secondary mirror).
3. Texas Tax Code §26.02, via the Texas.Public.Law mirror (current to 26 May 2025). texas.public.law — used for assessment at 100 percent of appraised value (A-claim, mirror).
4. Texas Tax Code §26.04, via the Texas.Public.Law mirror (current to 26 May 2025). texas.public.law — used for the voter-approval rate formula, the 1.035 multiplier, debt and unused-increment rates (A-claim, mirror; later amendments not checked).
5. Texas Tax Code §26.07, via the Texas.Public.Law mirror (current to 26 May 2025). texas.public.law — used for the automatic election for municipalities of 30,000 or more and the fallback to the voter-approval rate (A-claim, mirror).
6. Texas Legislature, S.B. 2, 86th Legislature, enrolled text (Texas Property Tax Reform and Transparency Act of 2019). capitol.texas.gov — used for the act's title and its Tax Code amendments (A-claim, primary).
7. Texas Legislature, S.B. 2 (86th Leg.) bill history. capitol.texas.gov — used for signature by the governor on 12 June 2019; the 1 January 2020 effective date is from the §26.04 and §26.07 amendment histories (A-claim, primary).
8. Community Impact Newspaper, report on Austin's tax rolls, 15 April 2026. communityimpact.com — used for the 3.5 percent cap "down from a previous 8%" and, in the Austin section, the 3.1 percent taxable-value projection and new-construction figures from TCAD preliminary reports (B-claim, secondary).
9. City of Austin, FY 2026-27 Approved Budget, Volume I, General Fund summary, "Taxes" narrative and property tax rate tables. austintexas.gov/budget — used for the General Fund total, property-tax shares and total, the adopted rate and prior-year rate, and the no-new-revenue rate $0.535466 (A-claim, primary).
10. City of Austin, Ordinance No. 20250813-010 (13 August 2025), ordering the 4 November 2025 special election on a rate of $0.574017. Austin City Clerk records. — used for the ballot rate and its $0.05 excess over the voter-approval rate (A-claim, primary).
11. Community Impact Newspaper, Austin Proposition Q election-night report, published 4 November 2025 (updated 5 November). communityimpact.com — used for "more than 63%" against; counts unofficial pending canvass, and the certified canvass was not located (A/B-claim, secondary).
12. Texas Newsroom/KUT, "Local funding and spending initiatives meet varying fates from voters across Texas," 5 November 2025. kut.org — used for the roughly two-to-one description of Prop Q's defeat (B-claim, secondary).
13. Community Impact Newspaper, Austin budget adoption report, 12 August 2026 (updated 13 August). communityimpact.com — used for the FY2026-27 rate being the maximum without voter approval and the council policy against a larger increase until at least 2029 (B-claim, secondary).
14. Travis Central Appraisal District, 2026 Certified Appraisal Export (Supplement 0, July 2026; unchanged in the October 2026 supplement), property records 860621 (98 Red River) and 191605 (604 Driskill). traviscad.org/publicinformation — used for acreage, land, improvement and total values of the two parcels (A-claim, primary). The per-acre tax and the acreage-weighted land-only figures are arithmetic on those records and the budget's rates.
15. Ryan Puzycki, "The Anti-Property Property Tax," City of Yes, 16 October 2026. ryanpuzycki.com — used as the origin of the Waterline and parking-lot comparison and the $650,000/$610,000 illustration (D-claim; Tier 2 blogger source, origin only). The post's legal conclusion on the route to reform is not relied on.