Buying a home in Dallas and wondering how property taxes and escrow will affect your payment and your closing costs? You are not alone. The way Texas handles appraisal dates, tax bills, and lender escrow accounts can feel confusing, especially if you are relocating or buying your first home. In this guide, you will learn the Dallas tax calendar, how escrow works at closing, which exemptions may lower your bill, and the key questions to ask before you sign. Let’s dive in.
Dallas property tax calendar
Texas values property as of January 1 each year. That snapshot matters for ownership and occupancy, which affect exemptions for the entire tax year. The Dallas Central Appraisal District, or DCAD, issues appraisal notices in the spring, and your protest deadline is listed on your notice and on DCAD’s site.
Appraisal rolls are certified in the summer. After certification, each taxing unit sets its tax rate in late summer or early fall. Tax bills are usually mailed in the fall and become payable in the next calendar year.
To avoid penalties and interest, taxes are typically due by the end of January of the following year. For current year dates, penalty rules, and payment options, confirm directly with the Dallas County Tax Office and DCAD.
Multiple taxing units and rates
A Dallas County bill combines rates from several taxing units. Many properties include the City of Dallas, Dallas County, the hospital district, the local independent school district, and sometimes a special district. Because school district and special district rates are a large share, two nearby homes can have different combined rates.
When you compare neighborhoods in Dallas, Plano, or Irving, check the specific address with DCAD or the Dallas County Tax Office to see the current appraised value and taxing units for that property.
How escrow works with taxes
Most lenders require an escrow account that collects money each month to cover property taxes and homeowners insurance. Your servicer then pays those bills when they come due. This account is separate from your loan principal and interest.
At closing, the lender estimates your annual taxes and insurance, sets a monthly escrow amount, and collects an initial deposit so there is enough to pay the first tax bill. Federal rules limit the cushion a lender can keep in escrow, generally up to two months of escrow payments.
Timing matters. If you close shortly before a big tax payment is due, expect a larger initial escrow deposit so the servicer can pay the upcoming bill. If you waive escrow on a loan that allows it, you will be responsible for calendaring and paying tax bills on time.
What you pay at closing
You will likely see two separate tax-related line items at closing:
- Proration between buyer and seller. The title company allocates the current year’s taxes based on the closing date. If the seller has already paid the year’s bill, you typically reimburse their share. If not, the settlement statement will credit or charge each side based on a reasonable estimate or the most recent bill.
- Initial escrow deposit. Your lender collects funds to seed your escrow account so there is enough to pay taxes and insurance when due.
For example, if you close in June, you will usually reimburse the seller for your portion of that year’s taxes and you will also fund your escrow so the servicer can pay the full bill when it is due in January.
Homestead and other exemptions
Texas offers a general homestead exemption for your principal residence. To qualify for a given tax year, you generally must both own and live in the home on January 1 of that year, then file an application with DCAD.
If you close and move in after January 1, you will typically qualify beginning with the next tax year. File as soon as you become eligible. Additional exemptions may be available for homeowners age 65 and older, individuals with disabilities, and disabled veterans. These require separate applications and documentation with DCAD.
Exemptions can reduce your taxable value, which often lowers the school district portion of the bill. For forms, documentation requirements, and filing deadlines, contact DCAD.
Budget smart for Dallas taxes
Property taxes are a meaningful ongoing cost in Dallas County. When you budget for a home, include mortgage principal and interest, escrow for taxes and insurance, HOA dues if applicable, maintenance, and utilities. If your loan allows an escrow waiver and you choose it, set reminders for appraisal notices in the spring and the January payment deadline.
Your monthly mortgage payment may change over time. Lenders run annual escrow analyses and adjust payments if taxes or insurance change. If the initial estimate was low, you may see a shortage that has to be made up.
Protest your value if needed
If your appraisal notice seems high, you can protest with DCAD. Deadlines are short and printed on your notice. Many owners start with an informal review, and if needed proceed to a formal hearing before the Appraisal Review Board. Always follow the dates listed by DCAD for your specific property.
What to ask before closing
Use this quick checklist to avoid surprises:
- Ask your lender or servicer:
- Will escrow be required for this loan or can it be waived?
- How much will you collect at closing for initial escrow and how was it calculated?
- Will you collect a cushion, and what is the maximum allowed by federal rules?
- Ask the title company or settlement agent:
- How are taxes being prorated and which tax year or bill is used for the estimate?
- If the proration uses an estimate, how will any difference be reconciled later?
- County and appraisal items:
- When and how do I file the homestead exemption with DCAD once I occupy the home?
- What is the filing deadline for exemptions this year?
- Documentation to keep: your Closing Disclosure or settlement statement, deed, proof of occupancy date, and any VA or disability documents if you will claim related exemptions.
Work with a local guide
A clear plan can lower stress and protect your budget. If you are buying in Park Cities, Preston Hollow, or North Dallas, you deserve a steady advisor who knows how Dallas tax timing, proration, and escrow play out at the closing table. For practical guidance and a smooth experience from offer to funding, connect with Debbie Ingram for a private consultation.
FAQs
When are Dallas property taxes due to avoid penalties?
- In Dallas County, taxes for a given year are typically due by the end of January of the following year. Penalties and interest start accruing after that date.
What taxes will I pay at a Dallas home closing?
- You will usually pay a proration for your share of the current year’s taxes and an initial escrow deposit so your lender can pay the upcoming bill when due.
How does the lender decide my initial escrow deposit?
- The servicer estimates annual taxes and insurance based on timing, collects enough to pay the next bill, and may include a cushion up to two months of escrow payments.
If I move in after January 1, can I get the homestead exemption right away?
- Generally no. You typically qualify beginning the next tax year, but you should file with DCAD as soon as you become eligible to ensure it applies going forward.
Do Dallas tax rates vary by neighborhood and school district?
- Yes. Your bill combines rates from the city or town, county, hospital district, local school district, and any special districts. Combined rates vary by address.
What happens if my property taxes rise after I buy?
- Your lender will adjust your escrow during the annual analysis. If there is a shortage, you may receive a bill for the difference or see your monthly payment increase.
Can I transfer the seller’s homestead exemption when I buy?
- No. Exemptions are tied to the owner and occupancy status. As the new owner, you must apply with DCAD and meet eligibility rules for your own exemptions.
