Austin’s housing market runs on rules that don’t always match what a first-time buyer expects from a “national” homebuying checklist. Texas has no state income tax, so property tax carries more weight here than in most states, and it works differently once you actually own a home instead of renting one. The city itself is really a set of smaller markets, from the inner-loop neighborhoods to fast-growing suburbs like Pflugerville, Manor, and Del Valle, each with its own price point and level of competition. None of that shows up on a national buyer’s guide.
I’m Robbie English, REALTOR, Broker at Uncommon Realty, and this covers the specific things I walk first-time buyers through before they write an offer in this market.
TL;DR
- Texas’ school-district homestead exemption jumped to $140,000 for 2026, and you have to file for it yourself once you own and occupy the home.
- Austin and Travis County both run down payment assistance programs for eligible first-time buyers, but income limits, price caps, and loan requirements apply.
- Closings in Texas go through a title company, not an attorney, and buyer closing costs typically run 2 to 5 percent of the purchase price.
- Entry-level price points in the outer suburbs tend to draw more competition among first-time buyers than higher-priced inner-loop neighborhoods.
- Texas contracts include an option period, a short window where you can back out for any reason and still get your earnest money back.
Property taxes and the homestead exemption
Texas leans on property tax more than most states, and Austin’s rates are on the higher end even within Texas. The single biggest thing a new homeowner can do to soften that bill is file for a homestead exemption, and it does not happen automatically. Once you own the home and it’s your primary residence, you file Form 50-114 with your county appraisal district, most commonly the Travis Central Appraisal District, though parts of the metro fall into Williamson, Hays, or Bastrop counties depending on where you buy.
For the 2026 tax year, the mandatory school-district homestead exemption increased from $100,000 to $140,000 after Texas voters approved Proposition 13 in November 2025. In practice, that amount gets subtracted from your home’s appraised value before school taxes are calculated, and school taxes are usually the largest line item on a Texas property tax bill. You get up to two years from the date you qualify to file, but there’s no reason to wait. Submit it as soon as you close. A homestead exemption also caps how much your home’s appraised value can increase each year for tax purposes, which matters in a market where values can move quickly.
None of this replaces a conversation with your appraisal district or a tax professional about your specific situation, but it’s the single most important paperwork step a lot of first-time buyers forget after closing. Coming from renting, or from a state without this kind of exemption system, it’s an easy detail to overlook, and it meaningfully lowers what you’ll owe on your school-tax line every year you own the home.
Down payment assistance worth checking on
Two programs are worth looking into if you qualify. The City of Austin runs a Down Payment Assistance Program for income-eligible first-time buyers, defined as anyone who hasn’t owned a home in the past three years, purchasing within city limits. It can provide a meaningful grant toward your down payment and closing costs, with the amount tied to your loan type, and it comes with an income limit, a sales price cap, and a required HUD-approved homebuyer education course before closing.
Separately, the Travis County Housing Finance Corporation offers the Hill Country Home program, a forgivable second mortgage usable anywhere in Travis County, including inside Austin. It’s not restricted to first-time buyers, but it does have its own credit score minimum, debt-to-income limit, and income cap tied to area median income.
Program terms, funding availability, and eligibility rules change, sometimes year to year, so treat any numbers you read here or elsewhere as a starting point, not a guarantee. Confirm current terms directly with the program administrator or a participating lender before you build a budget around one.
Closing costs, the option period, and how competitive different areas are
Texas contracts include something a lot of out-of-state buyers haven’t dealt with before: the option period. It’s a short window, usually five to ten days, negotiated into the contract, where you pay the seller a small option fee for the unrestricted right to walk away for any reason and still get your earnest money back. This is when your inspection happens. If the inspection turns up something serious, the option period is your leverage to renegotiate, ask for repairs, or terminate cleanly before you’re locked in. Once it expires, backing out gets a lot more expensive.
Closing itself also works differently than in some states. A title company handles it here, not an attorney, acting as the neutral third party that holds funds, coordinates signing, and transfers ownership once every condition of the sale is met. Title insurance premiums in Texas are set by the state rather than negotiated between companies, so that cost is the same no matter which title company you use. What does vary between companies is the escrow fee and a handful of smaller line items, so it’s worth asking about those upfront. Altogether, buyer closing costs in Texas typically run 2 to 5 percent of the purchase price, on top of your down payment, and that’s before any assistance program is applied. Budget for it separately.
Competition isn’t uniform across the metro either, and it’s tied more to price point than to any single neighborhood. Entry-level inventory in the outer suburbs, places like Pflugerville, Manor, Del Valle, and parts of Round Rock, tends to draw more first-time buyers chasing the same handful of listings, which can mean faster offers and less room to negotiate. Higher-priced inner-loop neighborhoods generally see less first-time-buyer competition simply because fewer buyers at that budget are shopping there, though inventory at any price point can move fast when it’s priced right. Where your budget lands on that spectrum shapes how quickly you’ll need to move and how tightly your offer needs to be structured, which is worth talking through before you start touring houses, not after you’ve found one you love.
How I help first-time buyers through this
Most of what trips up first-time buyers in Austin isn’t the house, it’s the paperwork and timing around it: knowing which assistance program you might actually qualify for, understanding what your closing costs will really look like before you’re staring at a settlement statement, and reading an inspection report without panicking over every item on it. I work with local lenders who know these programs and walk clients through their options before they’re under contract, not after. That’s the part of the job that matters most for someone buying their first home here.
If you’re weighing whether now’s the right time, or you just want a straight answer about what a specific neighborhood or price range actually looks like, get in touch and we’ll talk through it.
