Buying a home is one of the most important financial decisions you’ll ever make—and if you’re
looking in Frisco, Texas, understanding property taxes is critical. Local tax rates, exemptions,
how the taxable value is calculated—these factors impact your monthly payment, your long-
term investment, and how affordable a home really is. As a Frisco realtor, I’ll walk you through
the essentials of property taxes so you go into your home purchase well prepared.
1. What Are Property Taxes & How Are They Calculated?
Property taxes are local taxes charged on real estate based on the assessed value of the
property. Here are the key components:
- Assessed value: Local appraisal districts evaluate your home’s market value, then apply
the tax rate. - Taxing entities: In Frisco you’ll deal with multiple entities: the city (City of Frisco),
county (Collin or Denton depending on location), the school district (Frisco Independent
School District or Prosper ISD etc.), possibly a community college district, and other
special districts. - Tax rate: Taxing entities adopt a rate which is usually expressed in dollars per $100 of
valuation or a percentage. For example, the City of Frisco’s municipal rate is 0.425517
per $100 valuation for the 2025 fiscal year. - Effective rate: What the homeowner actually pays relative to home value (includes
exemptions, etc.). For instance, in Frisco (Denton County) the median effective rate is
about 1.44% of market value. ( Ownwell )
So when you’re shopping for homes, make sure to ask: “What is the current tax rate for this
property? Which entities apply? What exemptions are available?”
2. Property Tax Rates in Frisco, TX – What You Should Know
Since you operate in Frisco, here are some important facts:
- The City of Frisco’s municipal tax rate for FY2026 is 0.425517 (per $100 valuation) and
the rate was held steady at that level. (Frisco, TX) - The total combined tax rate (city + county + school + other districts) in Frisco can vary,
but some analyses show about 2.00% or slightly more of home value in certain zones.
(Frisco) - Important: While Frisco has a competitive city rate, Texas overall does not have “one of
the lowest property tax rates in the U.S.” The state average effective rate is about
1.63%, which is higher than the U.S. average. ( SmartAsset ) - However, you can position Frisco as having a relatively moderate municipal rate
compared to some other metro-areas, especially given the high property value growth
and amenities.
3. How Property Taxes Impact Homebuyers
When you’re buying a home, property taxes matter in several ways:
- Affordability: Higher taxes = higher monthly cost. When lenders calculate your debt-to-
income ratio they factor in tax estimates. - Budget planning: You must plan for taxes, along with insurance, HOA fees,
maintenance—especially in a market like Frisco where home values rise. - Equity growth vs. tax burden: While taxes may seem significant, in Frisco many
homeowners benefit from rapid appreciation which helps offset the tax expense. - Resale impact: When you sell a home, potential buyers in the area will also evaluate tax
burdens. A stable, predictable tax rate in Frisco is a selling point.
4. Exemptions & Tax Relief You Should Know About
Homebuyers in Frisco should be aware of key exemptions and reliefs that can lower your
property tax burden:
- Homestead exemption: Texas allows homeowners to claim a homestead exemption
which reduces the taxable value of your primary residence. Frisco approved a 20%
homestead exemption for the city portion. (Frisco, TX) - Over 65 / Disabled exemptions: Additional exemptions apply for homeowners age 65+
or disabled—valuable if you plan to keep your home long-term. - Appeals process: If you believe your home is over-appraised, you have the right to
protest your valuation with your county appraisal district. - New construction & value growth: If you buy new construction in Frisco, be aware that
assessments may jump as value catches up to market. Plan accordingly.
5. Key Questions Homebuyers Should Ask
When you’re showing homes or advising clients in Frisco, here are questions you should raise:
1. What is the current total property tax rate applicable to this neighborhood (city +
school + county + other)?
2. Does the home qualify for the homestead exemption and when do we apply?
3. Has the property been recently reappraised and is there risk of a value bump next year?
4. Are there special districts or MUDs (Municipal Utility Districts) that add tax burdens?
5. What is the anticipated increase in tax burden if the home value increases 5–10% over
the next few years?
6. How do taxes compare in neighbouring suburbs (so buyers understand Frisco’s
competitive landscape)?
6. Strategic Tips for Frisco Homebuyers & Investors
- Lock-in early: When you buy in Frisco, the appraised value is set as of Jan 1 of each
year—so if you purchase early in the year you may catch lower values. - Factor future value growth: With Frisco’s strong demand and appreciation, be realistic
about future tax increases—not just current rates. - Use tax savings to your advantage: Counsel clients on how the homestead exemption
and stable tax rate in Frisco can improve ROI for long-term homeowners and investors. - Leverage to sell later: When you eventually list, you can market the home with
messaging about predictable tax environment, strong schools, and city services—all of
which many buyers care about.
7. Conclusion
Understanding property taxes is essential for any homebuyer—and in a dynamic market like
Frisco, TX your tax burden is a key part of your total investment. While Texas overall has higher
property taxes than many states, Frisco offers a strong combination of value, growth potential,
and a city tax rate that is competitive for the region.
As a realtor in Frisco, I encourage you to look beyond the list price and dig into the tax scenario,
exemptions, and future tax projections. These factors can influence long-term affordability and
resale potential.
If you’re ready to explore homes in Frisco and want to run the numbers on tax implications,
let’s connect—together we’ll make sure you’re informed, confident, and ready to buy smart.
