Texas Gov. Greg Abbott Floats Eliminating School Property Taxes for Homeowners in Reelection Bid

Texas Gov. Greg Abbott has proposed allowing voters to decide whether they want to abolish school property taxes for homeowners as he launches his reelection bid. 

Speaking on Sunday at an event in Houston, marking the start of his campaign for a historic fourth consecutive gubernatorial term, Abbott, a Republican, laid out a five-point property tax reform plan

"Those local property taxes are being hiked by your local governments incessantly," Abbott told a crowd of supporters, as reported by KXAN. "It’s time that we drive a stake through the heart of the ability of local property tax hikes in the future."

Abbott’s multiprong initiative calls for empowering voters to roll back taxes, requiring two-thirds voter approval of future tax hikes, limiting appraisals to once every five years and capping them at 3% (down from the current 10%), as well as reining in what the governor called "out-of-control" spending by local governments. 

When talking about appraisals, it's important to note that Texas is among the five states that do not require the disclosure of real estate sale prices, making it more difficult for assessors to accurately determine home values.

Advancing the reform package at the center of Abbott's reelection bid calls for a constitutional amendment. The Legislature would need to put it on a statewide ballot, with 100 votes required in the state House and 21 in the Senate.

Abbott’s weekend announcement came less than a week after state voters greenlit two constitutional amendments to reduce property taxes for homeowners.  

At a campaign event in Tyler, TX, on Wednesday, the governor continued promoting his signature property tax relief plan, reported KLTV.

"You pay too much in your property taxes," Abbott told his audience gathered at a local brewery. "The budget surplus we’ve had each of the past four years exceeds the amount it would cost to eliminate any school district property tax in the state of Texas."

Governor's tax reform plan questioned

But the feasibility of Abbott's reform package has come under scrutiny, with experts questioning how the Lone Star State would be able to continue funding its public school system—the second-largest in the U.S. with some 5 million enrolled students—if it were to do away with the school property tax.

Texas is one of nine states that do not have state income tax on wages, meaning that its major streams of tax revenue are property and sales taxes.

According to the latest available data from the U.S. Census Bureau, the median property tax burden in Texas was $4,100 in 2024.

Realtor.com® research previously found that from 2023 to 2024, the median tax burden in Texas went up 7.8%, the second-highest increase in the U.S.

At a hearing held by the Texas Senate Finance Committee in September 2024, it emerged that property taxes accounted for about $81 billion of annual revenue that went to schools and local taxing authorities. 

"This is not something that you can find $81 billion on a per-year basis and not have a major impact in the remaining sales tax rates, because that is a huge amount of money," state Sen. Paul Bettencourt, a Republican from Houston, said during the hearing.

"Eliminating a major portion of property taxes shifts the burden to sales tax, which is less stable and less predictable," says Realtor.com senior economic research analyst Hannah Jones. "If school districts and local governments lose their ability to raise tax revenue and the state does not fully backfill missed revenue, schools, services, and infrastructure could suffer."

Abbott's proposal, though appealing to many households—particularly those on the lower end of the economic spectrum—would require major structural revenue shifts and could leave public services underfunded.

What does it mean for the housing market?

For the Texas housing market, eliminating school property taxes could bring mixed results.

"If fully implemented, property owners in Texas would see a lower tax burden, which would improve affordability in the state," says Jones. "However, lower property taxes could also increase demand for homes, resulting in more competition and higher home prices."

Without significant supply growth, higher demand fueled by the decreased cost of homeownership could put pressure on existing inventory levels.

"Affordability may remain tight, and first‐time buyers could still struggle amid rising prices and demand," warns Jones.

The gubernatorial election in Texas will take place on Nov. 3, 2026. If Abbott wins, he will become the longest-serving governor in the state's history, surpassing former Gov. Rick Perry's three-term record.

Abbott has already secured a full-throated endorsement from President Donald Trump, who touted his staunch Texas ally as an "exceptional Governor and man" in a Truth Social post.