On a $370,000 median-priced home in Houston, buyers typically pay 2% to 5% in closing costs (roughly $7,400 to $18,500), while sellers cover agent commissions (5% to 6% or $18,500 to $22,200) plus title and transfer fees. Texas property taxes stack county, city, school district, and special district rates, but the homestead exemption removes $140,000 from assessed value for school taxes and caps annual appraisal increases at 10%.
What Are Closing Costs for Buyers in Houston?
Buyers in Houston can expect to pay closing costs between 2% and 5% of the purchase price. On a $370,000 home, that means $7,400 to $18,500 out of pocket at closing. These costs include the loan origination fee, appraisal, title search, title insurance, escrow fees, and prepaid items like property taxes and homeowners insurance. Houston buyers also pay for a survey and a home inspection, which typically run a few hundred dollars each. The exact amount depends on your loan type, lender, and whether you negotiate seller concessions.
What Are Closing Costs for Sellers in Houston?
Sellers in Houston bear the largest closing cost: the real estate agent commission, which is typically 5% to 6% of the sale price. On a $370,000 sale, that is $18,500 to $22,200 split between the listing and buyer's agents. Sellers also pay for the owner's title policy (about $1,500 to $2,000), transfer taxes (a flat $10 per $500 of value in Harris County), and any negotiated repairs or credits. If you sell before paying off your mortgage, you will also cover the loan payoff and any prepayment penalties.
How Do Texas Property Taxes Stack in Houston?
Texas property taxes in Harris County generally land between 1.8% and 2.8% of a home's assessed value annually. The bill stacks multiple taxing entities: Harris County, the City of Houston, Houston ISD (rated B by the state), and potentially a municipal utility district (MUD) or public improvement district (PID) if the home is in a newer subdivision. A community college district and special districts (like flood control or hospital) also levy rates. On a $370,000 home, the annual tax bill could range from $6,660 to $10,360 before exemptions. The Houston ISD portion alone often accounts for roughly half of the total rate.
What Is the Texas Homestead Exemption and How Much Does It Save?
The Texas homestead exemption removes $140,000 from a primary residence's appraised value for school district taxes, since the 2025 tax year. For a home valued at $370,000, that means you only pay school taxes on $230,000 of value. In Houston ISD, the yearly savings equal the district's tax rate times $140,000. The exemption also caps annual appraisal increases at 10% per year as long as you maintain homestead status. Additional exemptions are available for owners who are over 65 or disabled. To claim the exemption, file with the Harris County Appraisal District by April 30 of the year following your purchase.
How Do You File for the Homestead Exemption in Harris County?
You file the homestead exemption with the Harris County Appraisal District (HCAD). The deadline is April 30 of the year after you buy and move into the home. You can file online through HCAD's website or by mailing a paper form. You will need a copy of your closing disclosure, a valid Texas driver's license or ID showing the property address, and your vehicle registration if it is not already updated. Once approved, the exemption applies automatically each year as long as you live there. If you buy a home in 2025, you have until April 30, 2026 to file.
What Other Tax Protections Exist for Houston Homeowners?
The 10% annual appraisal cap is the other major protection. It limits how much your home's taxable value can increase each year, even if market values soar. This cap applies only to primary residences with a homestead exemption. Additionally, homeowners over 65 or with disabilities can transfer their exemption to a new home if they move within Texas. For new construction, the taxable value may start at the purchase price, but the cap kicks in the following year. These protections, combined with the $140,000 school tax exemption, help moderate the impact of rising property taxes in Houston.
Homexa® provides general information, not legal, tax, or financial advice. Property tax rates, exemptions, insurance requirements, and school boundaries vary by parcel and can change; verify specifics with the county appraisal district, a licensed insurance agent, the ISD, and a licensed real estate or tax professional before you rely on them.