We introduce a notion of topological Property (T) for etale groupoids. This simultaneously generalizes Kazhdan's Property (T) for groups and geometric Property (T) for coarse spaces. One main goal is to use this Property (T) to prove the existence of so-called Kazhdan projections in both maximal and reduced groupoid C *-algebras, and explore applications of this to exactness, K-exactness, and the Baum-Connes conjecture. We also study various examples, and discuss the relationship with other notions of Property (T) for groupoids and with a-T-menability.