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Texas property taxes are increasing for homeowners, making property ownership — already challenging in a red hot seller’s market — even more expensive. Texas has been well-known for having high property tax rates, at 1.8%, compared to the national average of 1.1%. Having a high property tax rate makes sense: Texas doesn’t have a state income tax, and the funds for school districts, roads, and local municipal budgets must come from somewhere. But, despite provisions designed to keep property taxes in check, such as a provision that caps city and county tax revenue increases at 3.5% per year without a vote, many homeowners are surprised to see their annual property tax bill. If you’re facing a property tax bill that you think is inaccurate, there are a few steps you can take to look for Texas property tax relief. In this guide, we’ll look at:
- Why property taxes have increased
- Different strategies for getting Texas property tax relief
- How to protest your current tax bill and pursue an adjustment
Texas Property Taxes Have Increased
According to the Austin American-Statesman, property taxes are sizably increasing:
Comptroller data on school district, city, county, and special district property taxes indicate an estimated $73 billion in property taxes collected statewide in 2021. That’s at least a $20 billion increase and is in line with the analysis by the Texas Taxpayers and Research Association.
There are many different reasons for that increase, ranging from new developments and housing projects that simply raise the number of properties the government can tax to actual per-property increases in tax bills. If you’ve noticed a massive jump in your property taxes, there are two main reasons why this may be the case: percentage increases and assessed property value increases.
Percentages
The property tax rates in your county are subject to change; local authorities, not the state, levy them. Your local government may arrange a vote to approve spending on critical projects, increasing the property taxes that fund them. Because individual local taxing authorities can set their rates, you may see sharp rises if your county needs to build new schools, improve the roads, or fund expanding public services.
Harris County, for example, has a 2.09% average effective property tax rate and a $5,225 tax bill for a house assessed at a $250,000 value. Fort Bend, the county with the highest average effective property tax rate, comes in at 2.23%, or $5,575.
Assessed Property Value
Not only is that percentage likely to climb, but your home’s assessed property value can also skyrocket. The assessed property value is what the county assessor (or a county representative) determines your house to be worth. Different counties may evaluate your property through various methods, and some years may use estimates rather than individual assessments. If your home is in the DFW metroplex, Austin, Houston, or other popular regions, your home’s property value can jump dramatically because of the sales prices of homes around you.
Both of these factors may contribute to a property tax bill that’s an unpleasant surprise when bills start coming out in October.
Related: Understanding Your Texas Property Tax Bill
4 Ways You Can Get Texas Property Tax Relief
Proactively protecting yourself from property tax increases and responding to tax bills that you think are unfair or inaccurate are vital to getting appropriate tax relief. Consider these four strategies:
General Residential Homestead Exemption
If you have a residential property in Texas that is your primary residence — as opposed to a second home, a vacation property, or an investment property that you rent out to tenants — you can file a general homestead exemption for the property. There are two key ways this can reduce your property tax obligations:
- Property assessment cap: Your property’s assessed value can only increase by 10% per calendar year. For example, if your property was valued at $250,000 in 2021 and you have an adequately filed homestead exemption, the value can’t be higher than $275,000 in 2022. This insulates your expected costs against more dramatic hikes caused by sudden surges of demand in your area.
- Partial exemption from taxes: Recently, Texas changed the general homestead exemption from $25,000 to $40,000 for taxes levied to fund school districts. Your total tax bill comprises different tax “buckets,” or levies, such as your local school district, city, county, public services, etc. With this exemption, a $250,000 home will only have to pay taxes for the school district bucket as if the property is assessed at $210,000.
Exemption for Seniors, Homeowners With Disabilities, and Veterans
Similarly, Texas allows homeowners with disabilities, senior homeowners, and disabled veteran status to file additional exemptions on their properties. These provisions exempt from the home’s assessed value for certain levies, reducing the final tax bill.
Protesting Your Property Taxes
Filing for exemptions is a proactive move to reduce future tax obligations. If you can’t file these exemptions, don’t file them in time, or still aren’t satisfied with your property tax bill, you can protest your property taxes. Your county will provide a form, either on paper or online, where you can detail your reasons for opposing and your expectations.
In this approach, you generally cannot contest the tax percentage. Instead, you can protest the assessed property value. For example, suppose your home has suddenly been valued at $300,000 based on the rising importance of other homes in your neighborhood. However, you believe your home should be valued at $250,000 because it is smaller than those homes or doesn’t have the same improvements that other homes had when they went on the market. You can tell the county what you think your home is worth and provide supporting evidence. After you submit the protest form, your county may make a counter-offer, invite you to an informal meeting with the county assessor or hold a formal or informal hearing to decide on a final number.
Seek Advice From the Experts
Property taxes can be complicated, especially if you’re busy. Instead of pursuing property tax relief on your own, you can consult with professionals that have experience handling Texas property taxes. The right service can advise you on what exemptions to file, how to protest your property taxes, or even handle all the paperwork and processes on your behalf.
Related: Should You Protest Your Property Taxes Yourself? Or Hire a Pro?
How to Protest Your Property Taxes to Get Texas Property Tax Relief
One of the most effective ways to get property tax relief for a property tax bill you’ve already received is by protesting your taxes. Filing for exemptions, while very valuable, only affects future calculations. But by opposing the assessed value of your home, you can reduce the total tax bill across each of the levies your property is subject to. Also, while a general homestead exemption is only an option for a property that is your primary residence, you can file a protest for any property you own, including investment properties and second homes.
Follow these steps:
1. Determine What You Think Your Property’s Assessed Value Should Be
If you think the county misjudged your property, then you can respond with what the value should be. You might put last year’s property value, citing that you have made no improvements to the property. Alternatively, you can prepare a more robust argument by:
- Providing comps, which are documents that show the value of comparable homes in your neighborhood
- Providing estimates of the costs you would incur to bring your property up to the level the assessed value of your house implies (ex., siding repairs, roof repairs, foundation repairs, etc.)
- Taking photographs of areas of your home that need repairs
2. File Your Protest
You can find the property tax protest form on your County Appraisal District site or the state comptroller’s site. In addition, many counties provide an online option allowing you to complete and submit the form without mailing delays quickly.
3. Move Through the Informal and Formal Hearings Until You Receive Your Final Answer
Once the county reviews your submitted form, they may send you an adjusted tax bill with your property’s assessed value somewhere between the initial value they cited and your countering importance. At that point, you can choose to accept the revised bill or pursue the next step — a hearing — that the assessed value should change even further. Some counties may skip this step and move forward with an informal or formal hearing where you can present more thorough evidence.
During an informal hearing, you may present your evidence to the county assessor or representative to reach a compromise on your assessed property value. At a more formal hearing, you and the county assessor present your evidence to a panel of residents, who weigh the evidence and make a final decision regarding your property taxes.
Choose Home Tax Shield for Texas Property Tax Relief Without the Headache
Texas offers several measures where homeowners can get Texas property tax relief, but the processes aren’t always easy. At Home Tax Shield, we assist with protesting your property tax bill, managing the hearing process, and managing your property tax concerns. Contact us today to get started — we’re here to help make pursuing Texas property tax relief easier.