Ed Neuhaus 
The Number That Makes People Do a Double Take
Two cents. That’s the Bee Cave property tax rate. Specifically, $0.02 per $100 of assessed value. When I tell buyers this number for the first time, the reaction is almost always the same: a pause, a slight squint, and then “per hundred dollars?” Yes. Per hundred dollars. The average Bee Cave homeowner pays about $154 per year in city property taxes. Not per month. Per year. And no, there hasn’t been a clerical error.
I live in Bee Cave and I’ve watched this tax rate become one of the single most powerful selling points for the entire city. Because when you stack it up against the neighboring municipalities, the math isn’t even close. And in a market where property tax bills in Texas can legitimately surprise people who move here from states with income taxes, finding a city where the city portion of your tax bill is essentially a rounding error is worth understanding in detail.
How Bee Cave’s Tax Rate Compares
Lets put some numbers next to each other. These are the city property tax rates for the municipalities most often compared to Bee Cave.
Bee Cave: $0.02 per $100 of assessed value
Lakeway: $0.17 per $100
West Lake Hills: $0.03 per $100
Rollingwood: $0.20 per $100
Austin: $0.44+ per $100
Now lets translate that into actual dollars. On a $750,000 home (which is roughly the median price point in Bee Cave), here’s what you’d pay in annual city property taxes:
Bee Cave: $150
Lakeway: $1,275
West Lake Hills: $225
Rollingwood: $1,500
Austin: $3,300+
The difference between Bee Cave and Austin on a $750,000 home is over $3,150 per year in city taxes alone. Over a 10-year hold, that’s $31,500 in savings. On a million-dollar home, the gap widens to roughly $4,200 per year, or $42,000 over a decade. These are real dollars that stay in your pocket or go toward your mortgage, your kids’ education, or your retirement account instead of the city treasury.
But Wait. What About the Total Tax Bill?
Here’s where it gets a little more nuanced, because the city rate is only one component of your total property tax bill in Texas. Your full tax bill includes:
Travis County: approximately $0.30 per $100 (everyone in Bee Cave pays this)
Lake Travis ISD: approximately $1.05 per $100 (the school district portion, which is the largest line item for everyone)
Travis County Healthcare District: approximately $0.10 per $100
MUD (Municipal Utility District): varies by subdivision, typically $0.50 to $1.00+ per $100 if applicable
City of Bee Cave: $0.02 per $100
When you add all of these up, the total effective tax rate in Bee Cave typically lands somewhere between $1.50 and $2.50 per $100, depending on whether your neighborhood is in a MUD. That’s competitive with or lower than comparable areas in Central Texas, and the city portion being essentially zero is the primary reason.
One important note: not all Bee Cave neighborhoods are in a MUD. Established communities like Spanish Oaks, Falconhead, Lake Pointe, and The Homestead generally don’t have MUD taxes. Newer developments like Provence may have MUD assessments because the developer used a MUD to finance the infrastructure build-out. This is standard practice in Texas and not inherently a red flag, but it does affect your total tax picture and should be factored into your budget.
How Does Bee Cave Keep Its Rate So Low?
This is the question everyone asks, and the answer is straightforward. Bee Cave generates substantial revenue from sales tax and commercial property within its boundaries. The Hill Country Galleria alone generates significant sales tax revenue for the city. The commercial development along Highway 71 and RR 620 adds more. When a city has a strong commercial tax base, it doesn’t need to lean as heavily on residential property taxes to fund services.
Bee Cave also operates with a relatively lean municipal government. The city provides essential services (police, roads, parks, permitting) but hasn’t expanded into the kind of large-scale municipal programs that drive up tax rates in bigger cities. Water and wastewater services are handled by utility districts rather than the city, which further reduces the city’s operational footprint.
The result is a city that funds its operations primarily through commercial revenue and manages to keep its residential property tax rate at a level that is, for all practical purposes, symbolic. Could the rate go up in the future? Anything is possible, but the city has maintained this rate for years and there’s no current pressure to increase it significantly. The commercial base continues to grow, which should support ongoing low rates.
The Homestead Exemption
Texas offers a homestead exemption that reduces your taxable value on your primary residence. For the school district portion (the biggest chunk), you get a $100,000 exemption. For the county and other jurisdictions, the exemption may be $5,000 to $25,000. Bee Cave’s city exemption is less impactful simply because the rate is already so low, but every little bit helps.
If you’re over 65 or disabled, additional exemptions are available that can freeze your school district taxes entirely. These exemptions stack on top of each other, and for retirees in particular, the combination of Bee Cave’s low city rate plus generous homestead exemptions can result in a total tax bill that’s surprisingly manageable, even on a high-value home. For more on how Texas property taxes work in the context of homeownership, see our piece on the property tax elimination debate and home values.
What This Means for Buyers
When I run comparable analyses for clients looking at Bee Cave versus Austin, Lakeway, or even Dripping Springs, the tax advantage is often the tiebreaker. On paper, two homes might look similar in price, features, and school quality. But when you factor in the annual tax savings and project that forward over a 10-year or 20-year hold, the total cost of ownership in Bee Cave is meaningfully lower.
Lets use a real example. A $900,000 home in Bee Cave versus a $900,000 home in Austin. Assuming comparable county and school district rates, the city tax difference is approximately $3,780 per year. Over 15 years (a common ownership period), that’s $56,700. Invested at even a modest return, that number grows further. The Bee Cave homeowner essentially has a built-in cost advantage that compounds over time.
For the full cost-of-living breakdown comparing Bee Cave to its neighbors, read our detailed comparison of Bee Cave, Lakeway, and Dripping Springs. And for a broader look at what makes Bee Cave one of the most financially attractive cities in the Austin metro, start with our ultimate guide to living in Bee Cave.
If you’re ready to explore homes in Bee Cave, browse current listings or contact me directly. I’ll walk you through the tax picture for any specific neighborhood or address.
