Texas property tax paperwork is full of terminology that can be confusing. Your appraisal notice, tax bill, and protest forms all use terms that have specific legal meanings under the Texas Property Tax Code.
This glossary defines 20 key terms in plain English so you know exactly what you are looking at - and what you can do about it.
A
Ad Valorem Tax
A tax based on the assessed value of a property. The term comes from Latin meaning "according to value." All Texas property taxes are ad valorem taxes. Your tax bill is calculated by multiplying your property's taxable value by the combined tax rate of every jurisdiction that covers your address. The higher your property's value, the more you pay.
For a full explanation of how this works in Texas, see our guide on what ad valorem tax means for Texas homeowners.
Appraised Value
The dollar amount your county appraisal district determines your property is worth as of January 1 each year. The appraisal district estimates this based on recent sales of comparable properties, property characteristics, and market conditions. Your appraised value appears on your annual appraisal notice and is the starting point for calculating your tax bill. If you believe the appraised value is too high, you have the right to protest.
For more on how appraised value differs from market value, see Appraised Value vs. Fair Market Value.
Appraisal District (CAD)
The county agency responsible for determining the value of all property within its boundaries for tax purposes. Texas has one appraisal district per county, typically called the Central Appraisal District (CAD). The appraisal district does not set tax rates or collect taxes - it only determines values. Examples include HCAD (Harris County Appraisal District), DCAD (Dallas Central Appraisal District), and TAD (Tarrant Appraisal District).
Appraisal Notice (Notice of Appraised Value)
The annual notice mailed by your appraisal district, typically in April or May, showing your property's new appraised value for the current tax year. The notice includes your previous year's value, the new proposed value, exemptions on file, and instructions for filing a protest. You generally have 30 days from the date the notice is mailed (or until May 15, whichever is later) to file a protest.
Appraisal Review Board (ARB)
A panel of citizens appointed to hear and resolve disputes between property owners and the appraisal district. If you file a protest and cannot reach a settlement during the informal review, your case goes to an ARB hearing. The ARB reviews evidence from both sides and issues a binding determination of your property's value. You can appeal an ARB decision to district court or through binding arbitration.
For a detailed walkthrough, see our ARB Hearing Guide.
Assessed Value
The value used to calculate your actual tax bill. For most properties, the assessed value equals the appraised value. However, if you have a homestead exemption with the 10% cap in place, your assessed value may be lower than your appraised value because the cap limits annual increases. Assessed value minus exemptions equals your taxable value.
See Understanding Capped Appraisal Value for more detail.
C
Comparable Sales (Comps)
Recent sales of properties similar to yours in location, size, age, and condition. Comps are the primary evidence used in property tax protests to argue that your appraised value is too high. If similar homes in your area sold for less than your appraised value, that supports a reduction. The appraisal district also uses comps to set your value in the first place.
Learn more about using comps in our guide on how comparable properties help lower your taxes.
E
Effective Tax Rate
The total combined tax rate applied to your property when you add up all taxing entities (county, school district, city, and special districts). For example, if your county rate is 0.38%, your school district rate is 1.05%, and your city rate is 0.60%, your effective tax rate is 2.03%. Effective rates vary by address because different properties fall under different combinations of taxing entities.
See how rates compare across counties in our Texas Property Tax Rates by County guide.
Exemptions
Reductions in your property's taxable value that lower your tax bill. Texas offers several types of exemptions:
- Homestead exemption - $100,000 off school district taxes for your primary residence, plus additional amounts from many counties and cities
- Over-65 exemption - Additional $10,000 off school taxes, plus a school tax freeze
- Disabled person exemption - Additional $10,000 off school taxes
- Disabled veteran exemption - Varies based on disability rating, up to 100% exemption
- Agricultural (ag) exemption - Special valuation for qualifying agricultural land
For the full list, see Texas Property Tax Exemptions.
H
Homestead Cap (10% Cap)
A constitutional limit on how much your assessed value can increase each year for your primary residence. Once a homestead exemption has been in place for one full tax year, your assessed value cannot rise by more than 10% annually (plus the value of any new improvements), regardless of how much the appraised value increases. This means that even if the appraisal district raises your appraised value by 30%, your assessed value - the number used to calculate your taxes - can only go up by 10%.
See Understanding Capped Appraisal Value for worked examples.
Homestead Exemption
A tax benefit available to Texas homeowners who use their property as a primary residence. The most significant homestead benefit is a $100,000 reduction in taxable value for school district taxes. Many counties, cities, and special districts offer additional homestead exemptions. The homestead exemption also triggers the 10% cap on assessed value increases and provides protection from forced sale by most creditors.
See how the homestead exemption saves Texas homeowners money.
I
Informal Review (Informal Hearing)
The first step in the protest process after you file. During the informal review, you meet (in person, by phone, or online) with an appraiser from the appraisal district to discuss your property's value. Many protests are settled at this stage without going to a formal ARB hearing. You can present comparable sales, photos of property condition issues, or other evidence supporting a lower value.
M
Market Value
The price your property would sell for on the open market between a willing buyer and willing seller, with neither being under pressure to complete the transaction. The appraisal district is required by law to appraise your property at its market value as of January 1 each year. Market value is determined by analyzing recent comparable sales in your area. If your appraised value exceeds market value, that is grounds for a protest.
Millage Rate (Mill Rate)
A way of expressing property tax rates where one mill equals one-tenth of one cent, or $1 per $1,000 of taxable value. While millage rates are common in other states, Texas typically expresses tax rates as a dollar amount per $100 of taxable value. For example, a rate of $0.50 per $100 is equivalent to 5 mills. You may see millage rates referenced in national property tax comparisons.
N
No-New-Revenue Rate (NNR Rate)
The tax rate that would generate the same total revenue for a taxing entity as the prior year, accounting for new construction and other adjustments. This rate replaced the former "effective rate" terminology starting in 2020. If a taxing entity adopts a rate higher than the NNR rate, it must publish notice explaining the increase. The NNR rate serves as a baseline for evaluating whether your local government is raising taxes.
P
Protest (Property Tax Protest)
The formal process of challenging your property's appraised value with the appraisal district. Every Texas property owner has the right to protest each year. The deadline is generally May 15 or 30 days after your appraisal notice is mailed, whichever is later. A protest typically involves an informal review with an appraiser, and if no agreement is reached, a formal hearing before the ARB. Grounds for protest include the value being higher than market value, unequal appraisal compared to similar properties, or errors in the property description.
For a step-by-step walkthrough, see our Texas Property Tax Protest Guide.
T
Tax Rate
The rate set annually by each taxing entity (county, school district, city, special district) and applied to your taxable value to determine your tax bill. In Texas, rates are expressed as dollars per $100 of taxable value. For example, a rate of $1.20 per $100 means you pay $1.20 for every $100 of taxable value. Your total tax bill is the sum of amounts owed to each entity.
Taxable Value
Your property's assessed value minus all applicable exemptions. This is the final number used to calculate your tax bill. For example, if your assessed value is $400,000 and you have a $100,000 homestead exemption from the school district, your taxable value for school taxes is $300,000.
U
Unequal Appraisal
A protest ground arguing that your property is appraised higher than comparable properties in your area. Rather than proving your home is worth less than the appraised value, you show that similar homes are appraised for less. This is a powerful protest strategy because it does not require proving what your home would sell for - only that the appraisal district is not valuing properties uniformly.
Learn more in our guide on Fort Bend County unequal appraisal.
V
Voter-Approval Rate
The maximum tax rate a taxing entity can adopt without triggering a voter election. For most entities, this is the no-new-revenue rate plus 3.5%. For school districts, different rules apply. If voters petition and the rate exceeds this threshold, an automatic election is held to approve or reject the increase. This mechanism gives taxpayers a check on local government spending.
Lower Your Tax Bill
Understanding these terms puts you in a stronger position to evaluate your appraisal notice and decide whether to protest. If your appraised value looks too high, you have the right to challenge it every year.
At Ballard Property Tax Protest, we handle the entire process - from filing your protest to representing you at the hearing. You only pay if we save you money.
The protest deadline is May 15, 2026. Start your protest today.
