Property Tax: Lakeway vs. Lago Vista vs. Burnet County

Texas Has No Income Tax — Property Tax Carries More Weight

Texas has no state income tax, and in exchange, local governments rely on property taxes to fund schools, cities, and county services more heavily than in most states. Every rate discussed on this page is a combined rate — county, school district, city, and where applicable a Municipal Utility District all stack together into the single number that actually shows up on a Lake Travis owner's annual bill. Two properties of similar value on the same lake can pay meaningfully different amounts depending on which specific taxing entities apply.

Lakeway: The Highest Combined Rate on the Lake

Lakeway, the lake's most established and amenity-dense community, carries the highest effective tax burden of Lake Travis's major sub-markets — a combined rate of roughly 2.3% to 2.5% of assessed value once Lake Travis Independent School District, the City of Lakeway, Travis County, and any applicable Municipal Utility District are all stacked together. Lake Travis ISD is a well-regarded, well-funded district, and that funding is reflected directly in the tax rate. On a $750,000 Lakeway property, that combined rate translates to roughly $17,250 to $18,750 per year in property tax alone — before insurance, HOA dues, or any other carrying cost.

Lago Vista: Same County, a Meaningfully Lower Effective Rate

Lago Vista sits in the same county as Lakeway — both are in Travis County — but carries a notably lower effective property tax rate, around 1.16%, against a median home value near $469,898 and a median annual bill around $5,393. That is a genuine surprise for buyers who assume "Travis County" means one uniform tax burden: two communities on the same lake, in the same county, can differ by more than a full percentage point in effective rate. The gap reflects differences in local city tax rates, assessed-value patterns, and which specific taxing entities apply — not a data error, and not something a buyer should assume without checking the specific city and school district for a given parcel.

Burnet County: The Lowest Rate on the Lake

Burnet County, which holds Spicewood and the upper-lake stretches toward Marble Falls, carries the lowest effective property tax rate of the three — roughly 1.04%, against a countywide median home value around $346,908 and a median annual bill near $2,885. For a buyer whose top priority is minimizing carrying cost while remaining on Lake Travis, the Spicewood side of the lake deserves direct comparison against Lakeway or Lago Vista before assuming price alone tells the full cost story — the tax gap alone can offset a meaningful share of any price premium on the Travis County side.

What Is a MUD, and Why Does It Matter Here?

A Municipal Utility District is a Texas-specific special taxing entity that funds water, sewer, drainage, and sometimes road infrastructure for a defined area, typically in newer or previously unincorporated developments where a city hasn't yet extended its own utility service. A MUD carries its own separate tax rate, stacked on top of the county, school district, and city rate, and it can add a meaningful amount to a total bill — often an additional 0.3% to 0.8% of assessed value, though rates vary considerably by district and by how much debt the MUD is still repaying for its original infrastructure buildout. Some newer developments near Lake Travis fall inside a MUD; older, more established subdivisions in Lakeway generally do not. Ask directly whether a specific property sits inside a MUD, and if so, request the district's current tax rate and outstanding bond debt — a MUD carrying heavy infrastructure debt can mean a meaningfully higher combined rate than a comparable property just outside its boundary.

Homestead Exemptions and Appeals

Texas offers a general residence homestead exemption that reduces a primary residence's taxable value, along with additional exemptions for owners 65 and older or with a qualifying disability — available regardless of which Lake Travis community you choose, but only for a primary residence, not a second home or investment property. Because Central Texas home values have risen sharply in recent years, annual appraisal appeals are common practice among Lake Travis owners; both Travis Central Appraisal District and Burnet County Appraisal District publish a formal protest process, and many owners file every year rather than accepting the initial assessed value automatically.

What This Means for Your Search

Do not assume "Lake Travis property tax" is a single number. Confirm the specific city, school district, county, and any MUD that applies to an individual parcel before comparing listings on price alone — the difference between a Lakeway property and a Lago Vista or Spicewood property at the same price point can run several thousand dollars a year, and that gap compounds every year you own the home. A local agent and a title company that both work this lake regularly can pull the exact combined rate for any specific address before you write an offer.