Property Taxes On New Construction: Essential Info For Texas Homeowners

Key Takeaways:

• Assessment Timing: New construction is taxed based on its status as of January 1, which impacts how and when your home is fully assessed.
• Protest Opportunity: Texas homeowners can protest assessed values annually, and doing so can significantly reduce your property tax burden.
• Icon’s Advantage: Icon manages the entire protest process with no upfront cost, ensuring your home is taxed fairly — and you only pay when you save.

At Icon, we’ve saved Texas homeowners millions by challenging unfair property tax assessments — and we do it with a no-savings, no-fee pledge that puts their interests first. With a proven track record of fighting overvaluations and navigating county appraisal systems statewide, we know what it takes to protect homeowners from paying more than they should.

Buying or building a new home should be exciting — not financially unpredictable. But in Texas, the way new construction is taxed often catches homeowners off guard. Between shifting values, confusing timelines, and inconsistent assessments from appraisal districts, many new-build owners face unexpected tax bills and limited time to respond. Understanding how these taxes work is key to avoiding surprises and planning ahead with clarity.

In this piece, we’ll be discussing how property taxes work for new construction in Texas, when they kick in, how they’re calculated, and what homeowners can do to reduce their tax burden.

Understanding Property Tax For New Construction In Texas

If you’re building or buying a new home in Texas, understanding how property taxes work is essential. Texas doesn’t have a state income tax, so local governments rely heavily on property taxes to fund public services like schools, roads, and emergency services. For newly constructed homes, this tax process works a bit differently than it does for existing properties.

New construction is typically assessed based on the land value until the home is completed. Once the home is finished, the local appraisal district will determine its value, and that valuation becomes the basis for your property tax bill. The timing of the appraisal and how much is assessed can significantly affect what you owe — especially in your first year of ownership.

This process can be confusing and even catch homeowners off guard, especially if the increase is unexpected. At Icon, we help homeowners stay ahead of these surprises and make sure you’re not overpaying. If you’re unsure how your new home’s value will affect your taxes, you can get started with us here.

When Do Property Taxes Start On A New Build?

Property taxes on new construction in Texas don’t begin the moment the foundation is poured — but they don’t wait until your move-in day either.

Taxes are assessed based on the status of your property as of January 1st each year. If your lot is just dirt on January 1, your tax bill will reflect only the land’s value. But if your home is partially or fully built by that date, the appraisal district can include the value of the improvements (the structure) in your assessment.

This timing can make a big difference. Many homeowners are surprised to receive a much higher bill the following year, once the home is officially complete and fully assessed.

If you closed mid-year, there’s a good chance you’ll receive a supplemental tax bill later, especially if the appraisal district updates your property’s value after the standard January 1 snapshot.

Understanding the timeline is key to avoiding unexpected costs — and to planning for your tax responsibility ahead of time. At Icon, we help homeowners prepare for this transition and guide them through every step. Start protecting your investment now.

How New Construction Is Assessed

Understanding how your new home is assessed is essential to managing your property tax bill. In Texas, appraisal districts use a specific process to determine the taxable value of both your land and the structure you’ve built. Knowing how it works gives you the opportunity to act if the numbers don’t add up.

Land Value Vs. Improvement Value

Your total assessed value includes both the land and the home on it. While land value tends to be straightforward, improvement value can vary depending on size, finish, and overall quality.

How The Appraisal District Gathers Information

Appraisal districts rarely inspect new homes in person. Instead, they rely on building permits, construction data, and public records to estimate your property’s value.

Why Overvaluation Happens

Overvaluation often occurs when the district uses incomplete or outdated data. This can lead to a higher assessed value than what your home would actually sell for on the open market.

The Icon Approach

We step in to review your assessment and file a protest if we find discrepancies. With our No-savings, No-fee Pledge, there’s no cost unless we lower your tax burden.

What Happens If You Build Mid-Year?

Building mid-year in Texas can create confusion around your property tax bill. Since property values are assessed as of January 1, any construction that begins after that date typically isn’t included in that year’s initial tax bill — but that doesn’t mean you’re in the clear.

If your home is completed later in the year, the appraisal district may issue a supplemental tax bill or update your assessment the following January. This means your first full-year tax bill could be much higher than expected, depending on the timing of the build and how quickly the county updates their records.

Some homeowners don’t budget for this increase, especially if they closed just before the end of the year. That’s why it’s important to plan ahead and consider how your construction timeline may affect your taxes. At Icon, we help homeowners anticipate these shifts — and we only get paid if we save you money.

Common Mistakes Texas Homeowners Make

New construction brings a lot of moving parts — and property taxes are often an afterthought. But overlooking key details can lead to higher bills and missed opportunities to reduce what you owe. Here are some of the most common missteps we see.

Assuming The First-Year Tax Bill Is Final

The initial tax bill for a new build often only reflects the land value or partial construction. Once the home is complete, a higher assessed value — and a higher bill — may follow.

Ignoring The Appraisal Notice

Each spring, appraisal districts mail out valuation notices. Failing to open or review this notice means you could miss your chance to protest an overvalued assessment.

Waiting Too Long To File A Protest

Texas law sets a short deadline — usually May 15 — to file a protest. If you miss it, your assessed value stands, no matter how inaccurate it may be.

Protesting Without The Right Strategy

Filing a protest without strong data or a clear argument often leads to minimal or no reduction. Appraisal districts expect evidence, and knowing how to present it matters.

Not Seeking Expert Help

Many homeowners leave money on the table by going it alone. At Icon, we manage the entire process — and you only pay if we save you money.

How To Reduce Your Property Tax Burden

New construction often comes with a higher-than-expected tax bill, but that doesn’t mean you’re stuck with it. With the right steps, you can challenge your assessment and lower what you owe. Here’s how homeowners in Texas can take action.

Review Your Appraisal Notice Carefully

The appraisal notice shows how your property was valued. Compare it to similar homes in your area to identify possible overvaluations or inaccuracies in size, condition, or features.

File A Timely Protest

The deadline to protest is usually May 15, and missing it means you lose your chance to lower your tax bill. Submitting a protest on time keeps the door open for savings.

Gather Comparable Sales And Evidence

To support your protest, collect recent sales data from similar properties. This gives you a strong basis to challenge your assessed value and request a reduction.

Don’t Overlook Exemptions

Exemptions, like the Homestead Exemption, can reduce the taxable portion of your home’s value. Always check what you qualify for and submit the proper paperwork to apply.

Partner With Professionals

A property tax expert can handle the protest process more efficiently and increase your chances of success. Icon manages everything on your behalf — and you only pay if we save you money.

Why Icon Makes the Process Easier For Homeowners

Managing property taxes on a newly built home can be overwhelming, especially when you’re still settling in. Icon makes it easier by handling the entire process, so you don’t have to worry about forms, deadlines, or disputes.

We Understand Texas Appraisal Districts

Each county in Texas follows its own approach to valuations and protests. Our team knows the local systems inside and out, which helps us build a stronger case on your behalf.

We Handle The Entire Protest For You

From the first analysis to final negotiations, we manage everything. You don’t need to research comps or attend any hearings — we take care of it all.

You Pay Nothing Unless You Save

There’s no upfront cost to work with us. If we don’t save you money, you owe nothing, plain and simple.

We Focus On Accuracy And Fairness

Our goal is to make sure your home is assessed correctly. By using accurate data and proven strategies, we help keep your tax burden fair.

We Help You Plan Ahead

New construction timelines can create surprises in your tax bill. We guide you through what to expect, so you can avoid last-minute stress and plan confidently.

Final Thoughts

Property taxes on new construction in Texas can be complicated — but they don’t have to be overwhelming. Whether you’re building from the ground up or just moved into a newly finished home, knowing how and when your property is assessed puts you in a stronger position to protect your investment.

Icon is here to simplify the process and advocate for a fair, accurate tax bill. If you’re unsure what your next step should be, start here — there’s no risk and no fee unless we lower your taxes.

Read Also:

• How To Appeal Your Property Taxes In Texas And Actually Win
• Can You Claim Property Taxes On Your Income Tax Return?
• What Determines Your Property Taxes? Breaking Down the Factors That Matter

Frequently Asked Questions About Property Taxes On Construction

What happens to property taxes if I buy a newly built home before it’s fully complete?

If you purchase a home before it’s finished, your tax bill may initially reflect only the land or partially completed structure. Once the home is complete, the county can reassess the value and issue an updated tax bill.

Do property taxes on new construction increase annually in Texas?

Yes, they can. Property values are reassessed each year, and increases are common in growing areas — especially if new developments raise neighborhood property values.

Is there a grace period for paying property taxes on a new construction home?

There’s no grace period after the due date. Texas property taxes are typically due by January 31 of the following year, and penalties apply immediately after.

Can I apply for a homestead exemption on a new construction home?

Yes, as long as it’s your primary residence and you own the home as of January 1. You’ll need to apply with your local appraisal district once you’ve moved in.

How do school district taxes affect property taxes on new construction?

School districts often make up the largest portion of your property tax bill. New construction in high-demand districts can be taxed at higher rates due to elevated property values.

Do builder upgrades increase my property tax bill?

Yes, upgrades like granite countertops, larger floorplans, or custom features can raise your home’s assessed value. The more improvements, the higher the potential tax liability.

Will adding landscaping after move-in affect my taxes?

It can, though usually not dramatically. If the appraisal district updates the home’s data and includes new landscaping, it may slightly raise your home’s value.

What role do building permits play in property tax assessments?

Permits signal construction activity to the appraisal district. These records help them estimate what was built and assign a corresponding value — even without a physical inspection.

How do I check if my property is overvalued?

You can compare your assessed value with similar homes in your neighborhood. If your home’s value seems disproportionately high, it may be worth filing a protest.

Can I appeal a supplemental property tax bill after construction?

Yes, you can protest a supplemental bill just like a regular one. It’s best to act quickly, as deadlines may differ slightly from the standard protest window.