What is the property tax rate in McKinney, TX?

The combined McKinney property tax rate for FY2025-26 is 1.747147 per $100 of assessed value, which rounds to approximately 1.75% (City of McKinney adopted budget FY2025-26; McKinney ISD FY2025-26; Collin County; Collin Central Appraisal District). On a $500,000 home with no homestead exemption applied, that is $8,735.74 per year or roughly $728 per month in your escrow account, before homeowners insurance.

That is the answer most buyers are looking for. The more useful answer involves three layers that most online tax calculators skip entirely: which entities receive which portion of that rate, how the homestead exemption applies differently to each of those entities, and what the actual monthly escrow number looks like after the exemption reduces your taxable value. The difference between the no-exemption number and the exemption number on a $500K McKinney home is $1,546.61 per year, or about $129 per month. That is real money, and it only materializes if you apply for the exemption correctly and on time.

The rate applies to your home’s assessed value as determined by the Collin Central Appraisal District (Collin CAD), not the price you paid or what Zillow says your home is worth. Texas appraisals are supposed to reflect 100% of market value, but the appraisal and the actual market price frequently diverge, and the protest process exists precisely because the system is imperfect. More on that in the Collin CAD section below.

For buyers evaluating whether McKinney fits their budget, the right number to use in your pre-approval worksheet is the rate applied to the purchase price, not what the prior owner paid in taxes. The prior owner may have had a multi-year homestead exemption, a senior freeze, or a protest victory that kept their assessed value well below current market. Your taxes reset to current market value in the year following your purchase. Plan for that.

How McKinney’s combined rate breaks down by entity

The 1.747147% rate is not one bill from one entity. It is the sum of four separate taxing bodies, each of which sets its own rate independently. Understanding the breakdown matters because the homestead exemption does not apply equally across all four (Texas Tax Code §11.13). The school district portion is where the exemption delivers the biggest savings, which is also the largest single component of your rate.

Sources: City of McKinney adopted budget FY2025-26; McKinney ISD FY2025-26 tax rate; Collin County adopted rate; Collin Central Appraisal District rate compilation. Rates are set annually and may change in subsequent fiscal years.

McKinney ISD is the dominant line item at 63% of the total rate. This is typical for North Texas communities, where school district funding relies heavily on local property taxes under the Texas school finance system. The City of McKinney comes in second at roughly 24% of the total, followed by Collin County at about 9%, and Collin College District at approximately 5%. For a homeowner, the practical implication is that anything that reduces the McKinney ISD portion of your tax bill, primarily the homestead exemption, produces the largest dollar savings of any available mechanism.

It is worth noting that these rates are set annually by each governing body as part of their respective budget processes. The figures above reflect FY2025-26 adopted rates. If you are reading this well into 2026 or beyond, check directly with Collin CAD for any updates to the current year’s rates before using these numbers in a purchase or refinance decision. Call 214.429.4907 and we can walk through what the current effective rate looks like for a specific property.

What does the homestead exemption save you?

The Texas homestead exemption is one of the most valuable financial tools available to Texas homeowners, and it is also one of the most misunderstood. The short version: qualifying homeowners receive a $140,000 mandatory exemption on the school district portion of their taxable value only. The City, County, and College District rates still apply to the full appraised value of the home (Texas Tax Code §11.13, as amended by SB 2 / HB 3 legislation effective 2025). This distinction matters a great deal for the math.

How the exemption is calculated on a $500,000 home

On a $500,000 McKinney home, the homestead exemption reduces the taxable value for McKinney ISD purposes by $140,000, from $500,000 to $360,000. The City, County, and College District rates continue to apply to the full $500,000 appraised value. The calculation looks like this:

The $1,546.61 in annual savings translates to approximately $129 per month in reduced escrow payments. Over a five-year period, that is more than $7,700 in cumulative savings that never materializes if you miss the exemption filing deadline or do not realize you qualify.

Who qualifies and how to apply

To qualify for the standard homestead exemption in Texas, you must own the home and use it as your principal residence as of January 1 of the tax year. You do not need to have owned the home on January 1 of prior years; the exemption applies to the tax year in which you establish the home as your principal residence. Applications are filed with Collin CAD and must generally be received by April 30 of the applicable tax year. If you purchase a home in the spring or summer and miss the April 30 deadline, you may still file a late application by December 31 of the year following the year you first qualified (Collin Central Appraisal District, 2026 homestead exemption procedures).

There are additional exemptions available for seniors (65 or older), homeowners with disabilities, and certain surviving spouses of first responders, each of which can reduce taxable value further or cap annual increases. If you or a household member qualifies, these are worth exploring directly with Collin CAD, as the savings can be significant beyond the standard $140,000 school district reduction.

“Buying a house is a lot like eating an elephant. You do it one step at a time.”

The homestead exemption is one of those early steps that is easy to miss in the rush of closing. We walk every buyer through the filing process before they ever unpack a box. Call 214.429.4907 or reach out at kaitlinlovern.com/contact/ if you have questions about your specific situation.

What Is the Real Monthly Cost of Taxes and Insurance in McKinney?

Most buyers think about their mortgage payment in terms of principal and interest. The actual payment that clears their bank account each month, the PITI payment (principal, interest, taxes, and insurance), is often 25% to 40% higher than the P&I number alone. In McKinney, where the combined tax rate sits at 1.747147%, the tax component of that escrow is significant. Understanding it before you make an offer protects you from a monthly payment that surprises you six months after closing.

Price-band tax reference table

Calculations based on McKinney combined rate of 1.747147% FY2025-26 (City of McKinney; McKinney ISD; Collin County; Collin Central Appraisal District). Homestead exemption reduces taxable value by $140,000 for ISD portion only per Texas Tax Code §11.13. Monthly figures rounded to nearest dollar. Actual assessed value may differ from purchase price.

The table above uses the purchase price as a proxy for assessed value, which is the right assumption for a new buyer. In subsequent years, Collin CAD reassesses annually, and your taxable value can increase, though Texas law caps annual increases at 10% for homesteaded properties (Texas Tax Code §23.23). That cap is one of the most powerful features of the Texas homestead exemption in a rising market and one that buyers moving from California often do not realize exists when comparing Texas property taxes to their home state.

Adding homeowners insurance to the picture

Homeowners insurance in North Texas adds another layer to the escrow calculation. Premiums vary significantly based on home age, construction type, proximity to hail-prone corridors, and claims history, but a reasonable planning estimate for a $500K home in McKinney runs approximately $2,400 to $3,600 per year ($200 to $300 per month). Combined with the tax escrow of $599 per month at the $500K tier with homestead exemption applied, the total monthly reserve for taxes and insurance on a $500K McKinney home typically lands in the $800 to $900 range on top of principal and interest.

For a buyer using a conventional loan at current 30-year fixed rates (Freddie Mac Primary Mortgage Market Survey, mid-2026 range of approximately 6.4% to 6.6%), a $500K home with 20% down produces a principal and interest payment of roughly $2,500 per month at 6.5%. Add $599 in taxes and $250 in insurance, and the PITI comes to approximately $3,349 per month. That is the number that belongs in the budget conversation, not the $2,500 principal-and-interest number alone. If you want a specific estimate for a home you are evaluating, call 214.429.4907 and we can run the full numbers together.

How Do McKinney Property Taxes Compare to Where You Moved From?

The most common reaction I hear from buyers relocating to McKinney from California, Canada, and the East Coast is some version of the same sentence: “The property taxes in Texas are higher than I expected.” That reaction is understandable and also, once the full picture comes into view, significantly less alarming than it first appears. The key is understanding what you are not paying in Texas that you were paying in your prior state.

The Texas no-income-tax advantage

Texas has no state income tax (Texas Comptroller of Public Accounts). For a household earning $200,000 per year, this is not a minor footnote. California’s top marginal state income tax rate reaches 13.3%, with the 9.3% bracket beginning at $66,295 for single filers. A California household earning $200,000 in 2025 would owe approximately $16,000 to $20,000 in California state income taxes depending on filing status and deductions (Texas Comptroller; U.S. Census Bureau ACS 2024 domestic migration analysis). In Texas, that bill is zero.

Against that backdrop, the property tax picture on a $500K McKinney home looks different. The annual McKinney tax with homestead exemption at $500K is $7,189.13 per year. The annual California state income tax savings at $200K household income is roughly $16,000 to $20,000. The net position for a California relocator at that income level is a positive $9,000 to $13,000 per year even after fully accounting for the McKinney property tax bill. And that calculation does not include the typically lower home prices in McKinney relative to the California communities from which these buyers are moving (U.S. Census Bureau, ACS 2024).

What Canadian buyers need to know

Buyers relocating from Canada face a different set of comparisons. Canadian property taxes vary widely by province and municipality, with cities like Toronto and Vancouver running effective rates that are lower than McKinney’s on a percentage basis but applied to home values that are often three to four times higher. The total dollar tax bill for a Toronto or Vancouver homeowner selling a $1.5M to $2.5M Canadian property and purchasing a $500K to $700K McKinney home is frequently lower in absolute dollars, even though the rate in McKinney appears higher at first glance. The combination of a lower purchase price, no state income tax, and a stable 10% annual cap on homestead-exempted property means the long-term tax trajectory in McKinney is significantly more predictable than in most major Canadian urban markets (Texas Comptroller).

The East Coast comparison

For buyers from New York, New Jersey, Connecticut, and Massachusetts, the Texas property tax rate can feel like a wash or even an improvement. New Jersey’s average effective property tax rate runs above 2.0% on assessed value, and combined with state income taxes that can reach 10.75% on the highest brackets, the comparison to Texas generally favors McKinney for buyers at most income levels. New York City buyers in particular, accustomed to both state and city income taxes alongside New York State’s elevated property levies, often find the McKinney tax picture more favorable than their California counterparts do (Texas Comptroller; U.S. Census Bureau ACS 2024).

“North of 635 is a different world.”

That phrase is shorthand for the quality-of-life, tax structure, and community character that makes this part of Texas a genuinely different proposition from most of the markets that are sending buyers our way. If you are moving from a high-tax state and want to run a real comparison for your specific income and home-price scenario, call 214.429.4907 or visit kaitlinlovern.com/buy/. We do this calculation routinely for relocating families.

How Do Collin CAD Appraisals Work and How Do I Protest Mine?

Your McKinney property tax bill is the product of two numbers: the rate (set by the taxing entities) and the assessed value (set by Collin Central Appraisal District). Most homeowners spend all of their energy worrying about the rate and none of it on the assessed value, which is actually the variable they have more control over. The protest process exists for exactly this reason, and it is used successfully by a significant percentage of Collin County homeowners every year.

How Collin CAD arrives at your assessed value

Collin CAD is required under Texas law to appraise property at 100% of market value as of January 1 of each tax year. The district uses mass appraisal methods, meaning a relatively small team of appraisers values a very large number of properties using statistical models and comparable sales data rather than individual property inspections in most years. This approach is efficient but not precise, and the result is that individual properties are routinely assessed at values that do not accurately reflect their specific condition, features, or the actual comparable sales in their immediate neighborhood (Collin Central Appraisal District, 2026 appraisal procedures).

Appraisal notices are typically mailed in April. The notice will show your proposed assessed value for the current tax year, your prior year’s value, and the deadline to protest. That deadline is May 15 of the applicable year, or 30 days after the notice is mailed, whichever is later (Collin Central Appraisal District, 2026 protest procedures). Miss that deadline and you give up your right to contest the value for that year.

How to protest your Collin CAD appraisal

The protest process at Collin CAD has three stages. First, you file a Notice of Protest online at the Collin CAD portal or by mail before the deadline. Second, many protests are resolved at an informal hearing with a CAD staff appraiser who has the authority to adjust your value if your evidence is persuasive. If the informal hearing does not produce a satisfactory result, the third stage is a formal Appraisal Review Board (ARB) hearing where a panel of independent reviewers evaluates both sides. For homeowners who have done the work of assembling comparable sales evidence, the ARB hearing is often productive.

The most effective evidence in a Collin CAD protest is recent comparable sales: closed transactions within the last six months, within a half-mile of your property when possible, with similar age, size, lot size, and condition. A good buyer’s or seller’s agent who is active in McKinney will have direct access to MLS data that can support or defeat a given assessed value claim. If you are heading into the protest process and want help pulling comparable sales, call 214.429.4907. It is a conversation worth having before the deadline.

Homeowners who successfully reduce their assessed value through the protest process achieve a reduction that compounds over time, because the 10% annual increase cap in subsequent years applies to the reduced base value, not the pre-protest value. A successful protest in year one can therefore save money not just for that tax year but for every year that follows until the market catches up to the corrected value again.

What McKinney property taxes mean when you are buying or selling

Property taxes in Texas are paid in arrears, which creates a specific accounting dynamic at closing that buyers and sellers both need to understand before they sit down at the table. The seller owes taxes for every day they owned the home during the current calendar year, and that obligation is settled through a proration credit to the buyer at closing rather than through a separate payment to the taxing entities.

How property tax proration works at closing

If a McKinney home sells in July, the seller has owned the home for approximately seven months of the current tax year. The current year’s taxes have not yet been billed, because Texas property tax bills are not issued until late in the fourth quarter and are due by January 31 of the following year. At closing, the title company calculates the seller’s prorated share of the estimated annual taxes and credits that amount to the buyer. The buyer then pays the full annual tax bill when it arrives, keeping both the credit they received and paying the remaining months.

On a $500K McKinney home closing in July, the prorated tax credit at closing would be approximately $4,194 if the seller’s existing homestead exemption applies to the current tax bill (seven months of the $7,189.13 annual figure), or approximately $5,096 if the proration is instead calculated off the full unexempted annual bill of $8,735.74, which is the more conservative figure a buyer’s lender may use for escrow purposes since a new buyer’s own exemption will not take effect until the following tax year. This is a seller cost that reduces net proceeds and a buyer benefit that offsets the first full-year tax payment. It should be included in both the seller’s net proceeds estimate and the buyer’s closing cost worksheet from the beginning, not discovered as a surprise line item on the settlement statement.

Tax implications for sellers

For sellers, the property tax proration is one of several cost items that affect net proceeds from a McKinney sale. A complete net proceeds picture should also include the cost-to-sell components beyond taxes: agent commission, title insurance under the Texas promulgated rate schedule, any negotiated repairs or credits, and transaction fees. For a detailed breakdown of what it costs to sell in McKinney, see kaitlinlovern.com/cost-to-sell-a-house-in-mckinney-tx/. We provide a written net proceeds estimate for every seller we work with before the listing agreement is signed, so the number you receive at closing matches what you planned for.

Tax implications for buyers

For buyers, the property tax picture affects two things: the monthly budget through escrow, and the purchase price ceiling they can afford at a given income level. A lender will include the estimated annual taxes in the debt-to-income calculation, using the full rate applied to the purchase price (because the homestead exemption may not yet be in place at the time of underwriting). On a $600K purchase in McKinney, the lender will likely underwrite with an estimated annual tax of approximately $10,483 ($600,000 x 1.747147%), adding roughly $874 per month to the qualifying payment. After the homestead exemption is applied, the actual tax obligation will be lower, but the underwritten number is the conservative figure.

If you are evaluating homes at the upper edge of your pre-approval limit, understanding the difference between the underwritten tax number and the actual post-exemption tax number matters. Call 214.429.4907 or visit kaitlinlovern.com/buy/ to walk through what this looks like on a specific home. We work with buyers regularly who discover they can afford more home than their initial pre-approval suggested, once the full tax picture is correctly understood.

Frequently asked questions