If you don’t already know, if you look at property taxes across the United States, Texas sure does have some of the highest. Did you know that the state uses the funds generated from property taxes to pay for things like schools, water systems, and even the local law enforcement.
Ever want to know how property tax appraisal works in your home city or state. How much your home is valued will have a direct impact on the amount of property tax you pay on a yearly basis. The lower the amount the less you pay. Unlike when you sell a home ,(the highest price you can receive is the best) you are looking for the lowest amount possible. According to the Texas comptroller’s website,
Tax Code Section 23.01 requires taxable property to be appraised at market value as of Jan. 1.
They deem the market value to the the amount that the property would transfer ownership given “prevailing conditions”. The reason that property taxes are so high in Texas are simply because there is no state income tax. The state must recoup their money somehow.
How Property Tax Rates in Texas are Calculated
Although high, you should know that the taxes on specific dwellings don’t change much on a year to year basis. But they are recalculated each year and the owners are contacted via the US mail.
Homeowners total tax is calculated by multiplying the appraised value of the home times the tax percentage. For example if your home is worth $500,000 and the rate is 1.5%, then the total amount due is a staggering $7,500 per year. This is due on January 31st of each calendar year. If you are late in your payments, then you will be assessed a penalty by the state. Many homeowners have the amount set in their monthly payments. For others, they are responsible for them on their own.
We have comprised a table for the more notable county’s tax rates. These will include the median home value, median annual property tax payment, and the effective rate. The latter, is amount of total tax compared to their home’s value as a percentage.
This includes Houston and the suburbs that surround it. You will find that Harris County has some of the highest property taxes in the entire state of Texas.
You will also find that the biggest charge comes from the Houston Independent School District. So residents in Harris County have to pay the large school tax, plus the additional city and county rates as well. Don’t forget about the large apartments for rent in Houston, TX. They must pay their fair share as well.
Bexar includes San Antonio and is one of the largest counties in the state. The population is approaching 2 million. San Antonio has some of the most affordable living rates for such a large city.
Although Dallas county is not as high as Harris County, you will find that it is still above the national average rate. The majority of the funds go to local schools.
Home to the capital of Texas (Austin), and including some other cities and suburbs nearby, it isn’t as high as Harris or Dallas Counties. Some of the nearby towns like Pflugerville have even higher rates
El Paso County
Many people don’t know that El Paso is pretty big. Yes it has more people than notable cities like Washington DC, Boston, and Detroit. It actually is a border town on the westernmost point of Texas and also borders New Mexico. Although tax rates are significantly higher than the rest of the nation, housing prices are not.
How Your Property Taxes are Finalized
The county is responsible for determining your appraisal on your home. The counties will have a website where you can login and few your property information. If you disagree with their assessments, you will have the opportunity to dispute their findings.
Appraisals are determined in the beginning of each year and are then followed up by letters sent around the first of October. And as listed above, bills are due by Jan 31st.
Now there are opportunities to reduce your overall tax bill. These are accomplished by something called exemptions.
The Homestead Exemption will reduce your property value by $25,000. But this is only required to be offered by School Districts. People older than 65 get an additional 10k exemption.
Penalties for Non-Payment of Property Tax
Texas has pretty stiff penalties for late payments of property tax. The interest and other costs adds up pretty quickly. This can lead to foreclosure of your home. But you will be notified before the sale actually occurs. This notification can be accomplished by the US Mail or in person.
If the sale does go through, all is not lost. You still have time to buy back your home. You will have to pay the high bidder who successfully purchase your home. For the exact penalty percentages you will want to contact the Texas Comptrollers office.
How to Dispute Property Taxes
Luckily, you don’t want to simply accept the property valuation assessed to your poperty. You have the right to protest the value and any actions conducted by the appraisal review board. You must file form 50-132 with the ARB. Usually you have until May 15th or about 30 days from when the notice is delivered. Many leasees can also protest the property tax, if they are required to pay that as part of their lease.