Taxes in Katy
Katy's property tax picture is a genuine tri-county tangle: Katy Independent School District's own rate and the City of Katy's own municipal rate are fixed and precisely sourced, but the total bill on any given parcel depends on which of Harris, Fort Bend, or Waller County it sits in and whether it's inside a Municipal Utility District (MUD). Beyond property tax, residents get Texas's standard no-income-tax structure and a modest local sales tax add-on.
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Learn moreKaty ISD: a fixed, precisely sourced rate
Katy Independent School District held its total tax rate flat at $1.1171 per $100 of assessed value for the second consecutive year for fiscal year 2025-2026 -- split between a Maintenance & Operations rate of $0.7271 and an Interest & Sinking (debt service) rate of $0.39, per Katy ISD's own board reporting. This is the largest single layer on most Katy-area tax bills and applies district-wide, regardless of which of the three counties a specific address sits in.
The City of Katy's own municipal rate -- but only inside city limits
The City of Katy's own tax rate is $0.4250 per $100 of assessed value, held flat for two consecutive fiscal years through 2025-26. This rate applies only to property inside the small incorporated city limits (roughly 15 square miles) -- the large majority of the broader "Katy area" sits in unincorporated county territory and does not pay this municipal rate at all, instead paying county-level rates plus, often, a MUD rate.
County and MUD layers vary meaningfully by which of the three counties applies
Effective combined property tax rates across Katy-area neighborhoods are cited by HAR.com in a range of roughly 2.5% to 3.6% of home value, depending on the specific county, city-limits status, and MUD. Fort Bend County homeowners average a combined effective rate around 1.65% by one estimate; Harris County tends to run higher once MUD and special-district levies are included; Waller County often carries a lower base rate, though newer communities there can carry higher MUD rates while infrastructure bonds are still being retired. No single number represents "the" Katy property tax rate -- check the specific parcel's county appraisal district for an actual combined rate.
No Texas state income tax, and an 8.25% combined sales tax
Texas is one of a small number of states levying no personal income tax -- often the single largest tax-line difference for people relocating from a state with one. The combined sales tax rate in the City of Katy is 8.25% for 2026: the state's 6.25% rate, plus a 1% city rate and a 1% special-district rate. There is also no state estate or inheritance tax, though federal estate tax rules still apply regardless of state of residence.
The 2026 homestead exemption and 10% appraisal cap
For a primary residence, Texas's mandatory school-district homestead exemption is $140,000 of appraised value for the 2026 tax year (raised from $100,000 by a November 2025 constitutional amendment), with an additional $60,000 school-district exemption for owners 65 or older or disabled. Once homesteaded, annual increases in a property's appraised value for tax purposes are capped at 10%, regardless of how fast market value rises -- this protects long-term owners from rapid reassessment but does not reduce a new buyer's first-year bill, which is set off the purchase-driven appraised value.
Key takeaways
- Katy ISD's total tax rate is $1.1171 per $100 of assessed value for FY2025-26 (M&O $0.7271 + I&S $0.39), held flat for a second consecutive year -- this district-wide rate applies regardless of which county a given address sits in.
- The City of Katy's own municipal rate is $0.4250/$100, held flat for two years -- but it applies only inside the small incorporated city limits; most of the broader Katy area is unincorporated and pays county/MUD rates instead.
- Combined effective property tax rates across Katy-area neighborhoods run roughly 2.5%-3.6% of home value (HAR.com), varying by county (Harris, Fort Bend, or Waller) and MUD status -- Fort Bend's combined effective rate averages around 1.65% by one estimate, with Harris typically running higher once MUD levies are added.
- No Texas state income tax; combined sales tax in the City of Katy is 8.25% (6.25% state + 1% city + 1% special district).
- The 2026 school-district homestead exemption is $140,000 (up from $100,000 via a November 2025 constitutional amendment), plus $60,000 more for owners 65+ or disabled, with a 10% annual appraisal-value cap once homesteaded -- doesn't reduce a first-year buyer's bill.
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