Southlake's total appraised value slipped 0.7% to $15.4 billion for the fiscal year that began Oct. 1, 2026, which the city's own budget document calls the first decline in at least thirty years. At the same time, the city lowered its property tax rate to $0.29 per $100 of value. For homeowners, the two moves together shape what the next tax bill and the next sale look like.
What exactly changed in Southlake's budget this fall?
The city's FY 2027 budget overview, presented in a City Manager's letter dated Aug. 14, 2026, lays out the numbers. Total appraised value fell 0.7% to $15.4 billion, and taxable value fell 0.5% to $12.3 billion. New construction added about $110.4 million in value, which was not enough to offset the dip across existing property.
The proposed tax rate was $0.290 per $100 of valuation, down a half cent from $0.295. According to the budget document, that is more than a full cent below the no-new-revenue rate of $0.301616. Community Impact reported on Aug. 24, 2026, that Mayor Shawn McCaskill described it as the city's lowest property tax rate in almost 50 years. The council scheduled public hearings on Sept. 1 and Sept. 15, with adoption considered at the Sept. 15 meeting, and the city's finance page now links to an adopted FY 2027 budget.
Other headline figures from the proposal:
- Total proposed expenditures of $133.65 million, about $4 million lower than the prior budget.
- Projected revenue of more than $159 million, up 3%.
- A general fund surplus estimated at $3.72 million.
- A 3% cost-of-living adjustment for eligible employees and a reduction of 5.55 full-time positions.
- Sales tax projected at $48.9 million across all funds, about 31% of total revenue.
How much does the average Southlake homeowner pay the city now?
The budget puts the average appraised home at $1,085,031. Southlake continues to offer the maximum 20% homestead exemption, which reduces taxable value on that average home by $217,006. At the $0.290 rate, the city's tax options table shows a city tax bill of $2,483 on the average home. With the exemption factored in, Community Impact calculated an effective rate of about $0.231 per $100.
Seniors over 65 and disabled residents also keep the existing $75,000 exemptions and the over-65 tax freeze. Together, the city estimates all these exemptions reduce FY 2027 revenue by about $6.9 million.
Is the city bill the whole picture?
No. The city is one line on a Southlake tax statement. School district, county, college district and hospital district levies are separate, and the school district serving your address sets its own rate. When our agents at The Agency Dallas walk a buyer through a Southlake carrying cost, we look at the full statement for the specific address, not just the city rate.
Does a dip in appraised value mean Southlake home prices are falling?
Not necessarily, and it is worth being careful here. Appraisal district values are set as of January 1 and reflect a mass appraisal model, not a closed sale. A 0.7% decline across a $15.4 billion base is modest, and it includes commercial property, which Southlake has in quantity around Town Square and the State Highway 114 corridor.
What the number does tell us is that the run of large annual value jumps has paused. For owners who protested aggressively in past years, that is useful context. For buyers, it suggests a market where pricing is being set street by street rather than lifted uniformly.
What should a seller take from this?
Sellers in Southlake should expect buyers and their agents to arrive with the same data. A listing price built on the assumption of automatic annual appreciation is harder to defend in a year when the city itself reports a slight decline in value. Our agents at The Agency Dallas who work Southlake price from recent comparable sales in the same subdivision and school zone, then adjust for condition, lot and updates.
Why is Southlake able to cut its rate while values slip?
The budget answers that directly: sales tax. Southlake projects $48.9 million in sales tax revenue across all funds, up 8.3% from the prior adopted budget, and notes that up to 70% of it may come from non-residents. That shopping and dining base takes pressure off residential property owners.
The city also plans to pay off existing debt within 10 years, according to Community Impact's Sept. 4 reporting, and continues to fund capital work largely in cash. The FY 2027 cash funding plan totals $21.05 million, including:
- $8 million for water and sewer infrastructure through the Utility Fund.
- $6 million for park system design and development through the Southlake Parks Development Corporation.
- $3 million through the Community Enhancement and Development Corporation for Champions Club debt service, operations and eligible infrastructure.
- $2.5 million from the General Fund for streets, pathways, ADA access and facilities.
- Smaller amounts for storm water, park dedication, public art and hotel occupancy tax projects.
What is the city spending on that residents will notice?
The budget highlights a new Municipal Service Center and a Public Safety Training Tower coming online, an updated Parks, Recreation and Open Space Master Plan, and work toward a concept plan for a new park on the former Old Dragon Stadium property. The Crime Control and Prevention District budget rises to just over $3 million, funding police equipment including a planned body camera upgrade and the School Resource Officer program in Carroll ISD.
For a buyer comparing Southlake with neighboring towns, the combination of a low city rate, a large homestead exemption and steady park investment is a meaningful part of the value equation. Our overview of the area at Southlake and Westlake covers how those pieces fit with neighborhoods and schools.
What should homeowners do with this information?
A few practical steps make sense for owners this fall:
- Confirm your homestead exemption is on file with your county appraisal district.
- Compare your appraised value with recent sales on your street before the next protest window.
- If you are thinking about selling in 2027, get a current estimate grounded in local sales rather than last year's appraisal. Our home valuation page is one starting point.
Southlake's numbers this year describe a town that is financially steady while its property values take a breath. That is a different story than the one told over the past several years, and it is worth reading closely before making a move in either direction.
Frequently asked questions
What is Southlake's property tax rate for FY 2027?
The FY 2027 budget set the city rate at $0.290 per $100 of valuation, down from $0.295 the prior year. The rate sits below the no-new-revenue rate of $0.301616, and city leaders described it as the lowest Southlake rate in almost 50 years. School, county and other taxing units charge their own separate rates on top of the city portion.
Did Southlake home values go down in 2026?
Citywide appraised value fell 0.7% to $15.4 billion, and taxable value fell 0.5% to $12.3 billion, according to the FY 2027 budget. That figure blends residential and commercial property and reflects appraisal district values, not sale prices. Individual neighborhoods can move differently, so recent comparable sales are the better guide for any single home.
How big is Southlake's homestead exemption?
Southlake offers the maximum 20% residential homestead exemption. On the city's average appraised home of about $1.085 million, that reduces taxable value by $217,006. Residents over 65 and disabled residents also receive a $75,000 exemption, and the city maintains a tax freeze for homeowners over 65. Exemptions must be filed with the appraisal district.
Why does Southlake rely so much on sales tax?
Sales tax makes up about 31% of the city's total revenue, with $48.9 million projected across all funds for FY 2027. The budget estimates up to 70% of that comes from non-residents shopping and dining in Southlake. That outside spending helps the city keep residential property tax rates low while still funding parks, streets and public safety.
Does the lower city rate mean my total tax bill will drop?
Not automatically. The city rate is only one portion of a Southlake tax statement, and your bill also depends on your appraised value and on rates set by your school district, Tarrant or Denton County and other units. A lower city rate helps, but owners should review the full statement for their address to understand the change.
Sources
- City of Southlake, FY 2027 Budget Overview
- City of Southlake, City Budget and Finances
- Community Impact, Southlake officials propose $133.65M budget, tax rate reduction (Aug. 24, 2026)
- Community Impact, Southlake council looks at higher revenues, lower expenses in proposed FY 2026-27 budget (Sept. 4, 2026)
