Prosper Home Values Dipped This Year. Tax Bills Still Rose, and the Seller's Bill Won't Be Yours.

The average Prosper homestead lost market value this budget year, and the Town's tax rate didn't change, yet its Town tax bill went up. That matters most to anyone who is about to estimate a monthly payment from the tax figure on a resale listing.

The Town's own numbers explain it. They also show that the tax figure a Prosper seller pays today depends on how long that seller has owned the home. A buyer does not inherit that history.

Prosper's FY 2026-27 numbers, side by side

On Sept. 8, Prosper Town Council kept the property tax rate at $0.505 per $100 of valuation, the same rate as FY 2025-26, according to Community Impact. Here is what Finance Director Chris Landrum's budget presentation showed for the average homestead:

Market value fell and taxable value rose, and the two lines moved toward each other. Landrum told Community Impact why: the homestead cap "can only increase up to 10% each year," and taxable values "may still increase as it catches up to property values that increased in previous years." Community Impact described the result as a lag that lets tax bills rise "even as property values decrease and the property tax rate remains steady."

For a homeowner who is staying put, that lag means a slow rise in the bill. For a buyer, the gap in the table is the part to watch, because the gap belongs to the current owner.

The cap is tied to the owner, not the house

Texas law limits how fast a homestead's appraised value can rise. Under Tax Code Section 23.23, the yearly increase can't exceed the prior year's appraised value plus 10%, plus the value of any new improvements. The same section sets out when the limit starts and when it ends:

The limitation expires on January 1 of the first tax year that neither the owner of the property when the limitation took effect nor the owner's spouse or surviving spouse qualifies for an exemption under Section 11.13.

The Texas Comptroller puts it plainly. The limitation applies only to property granted a residence homestead exemption. It takes effect Jan. 1 of the tax year after the owner qualifies, and it expires Jan. 1 of the tax year after the owner no longer qualifies.

Applied to Prosper's averages, this means a long-time owner whose taxable value sits $172,878 below market holds that gap personally. When that owner sells and stops qualifying, the limit stops too. The new owner's cap starts on the new owner's own timeline, and it starts from the appraisal district's market value.

How the first few years usually unfold for a buyer

Under the statute and the appraisal district guidance, a resale purchase in Prosper typically moves through three stages:

1. The year of purchase. Collin Central Appraisal District says the general homestead exemption generally requires the owner to own and live in the home as of Jan. 1. A buyer who closes after Jan. 1 can qualify for part of that year's exemption only if the prior owner did not receive the same exemption for that year. In most resales the seller did receive it, so that year's figures still reflect the seller's exemption and cap.
2. The first full year. The seller's limitation expires on Jan. 1. The buyer applies for the homestead exemption, and Collin CAD says applicants generally file between Jan. 1 and April 30. The cap does not apply yet, so the home's taxable value starts from market value, minus the buyer's exemptions.
3. The year after that. The buyer's own 10% limit takes effect on Jan. 1 of the tax year after the buyer first qualifies. From then on, the buyer builds a cap history of their own.

At the Town's $0.505 rate, the average homestead's $172,878 gap is about $873 a year on the Town portion of the bill alone. Prosper ISD and the county also tax each home under their own rates and exemptions, so the full difference on a given property depends on its appraisal and on the taxing units listed on its statement.

The homes that never had a gap

This is where new construction changes the comparison. Landrum credited the Town's rise in total taxable property, from $10.8 billion to $11.5 billion, largely to growth and new building: "New construction really is the driver," he said, according to the same Community Impact report. Upcoming commercial projects named in the budget include Westfork Crossing, Eagle Crossing Phase 2 and Gates of Prosper Phase 3B.

A newly built home has no prior owner's cap to expire. Its tax estimate starts from market value from the beginning. A long-held resale nearby may show a much lower tax line on paper, partly because of the seller's cap history. Compare the two homes on the same basis, by estimating both at market value. Otherwise the comparison credits the resale with savings the buyer won't keep.

The same logic applies to Prosper sellers. Recent sales counts are only published for Prosper and Celina together. Community Impact reported 192 sales in August 2026, down from 210 in August 2025, and 173 in September 2026, compared with 175 the September before. Most September sales fell between $400,001 and $700,000, and 22 closed above $1 million. When a buyer weighs a resale against a builder's home in that range, the buyer's lender will base the tax estimate on what the buyer will owe. The seller's current bill doesn't set that number. A listing priced with the buyer's real carrying cost in mind avoids a surprise when the buyer's lender runs those figures.

The rest of the carrying-cost stack for FY 2026-27

The Town rate is one line on a Prosper tax statement. These are the other adopted rates for the current fiscal year. Prosper spans two counties, so a given address pays one county rate or the other.

Sources for each line are the Prosper ISD rate report from Community Impact, Collin County's FY 2027 adopted budget and Denton County's announcement.

Lower rates at the school district and in Denton County do not undo the cap effect. A rate cut applies to taxable value, and for a new owner, taxable value starts from market value.

School districts now must grant a $140,000 general homestead exemption. Homeowners who are 65 or older or who have a disability get an additional $60,000, under amendments voters approved on Nov. 4, 2025, according to the Comptroller. Every qualifying owner gets these exemptions, so they lower the bill for a buyer and a seller alike. They do not close the cap gap.

One more cost lands outside the tax statement. Council also approved water and wastewater increases on Sept. 8. The average resident's combined bill goes from $177.70 to $205, which helps fund the $269 million Doe Branch Water Reclamation Plant expansion.

FAQ

When can a Prosper owner protest an appraisal?

For the 2026 cycle, Collin CAD mailed appraisal notices on April 15 and set May 15, 2026 as the protest deadline for real property. Denton CAD's protest page gives the deadline as May 15 or 30 days after the notice was mailed, whichever is later. Next year's notices are a buyer's first chance to review the market value their bill will start from.

Does a remodel affect the cap?

The 10% limit does not cover new improvements. Their market value is added on top. Under the Comptroller's guidance, repairs and ordinary maintenance do not count as new improvements.

Where do I file the homestead exemption in Prosper?

Collin CAD or Denton CAD handles it, depending on which county the home is in. Collin CAD's homestead FAQ covers the Jan. 1 ownership rule, the filing window and partial-year eligibility. It also notes that you need a new application whenever your homestead changes.

This post is general information, not legal, tax or financial advice. Confirm how these rules apply to your property with your appraisal district, a tax professional or your lender.

If you're comparing a long-held Prosper resale with a new build, or pricing your own home against a builder down the road, Rene Burchell and the team can help you estimate the carrying cost the next owner will actually pay before an offer is written. Let's Connect.