Appraisal of Property Taxes in Texas
Texas is among seven states in the US where it does not collect personal income taxes. Nor will it. Instead, the state relies on sales taxes and the taxation of both business personal property and real property. Even though property taxes in Texas remain one of the highest in the nation, the overall tax burden of the state remains one of the lowest in the nation. Property taxes in Texas are assessed and collected at the local level and used to fund the city, counties, and School Districts, and special districts. This helps pays for essential community needs such as public schools, city and county roads, police and fire protection and many other programs.
In November of 2019, about three-fourths of Texas voters, voted in favor of Proposition 4. This resulted in a constitutional amendment banning the imposition of an individual income tax. So, its fair to say that property taxes will remain one of the States primary source of revenue.
The Property Tax Players
The Appraisal District
The primary responsibility of the appraisal district is to appraise all properties in its jurisdiction at fair market value where market value as defined by the Texas Property Tax Code as: The price at which the property would transfer for cash or its equivalent under prevailing market conditions and there is a willing seller and buyer with all the knowledge of its uses and limitations and no one is in the position to take advantage of the exigencies of the other. They also administer exemptions and must create the appraisal rolls for taxing units.
Taxing Units/Jurisdictions
This includes counties, cities, school districts and special taxing districts. These taxing jurisdictions are responsible for establishing a tax rate in which applied to your property’s valuation to formulate your tax bill.
The Tax Assessor-Collector
Once the appraisal district finalizes the tax roll, they send a certified tax roll to the tax assessor-collector who then applies the local tax rate to the property’s’ value to generate a tax bill. The same office is also responsible for collecting the levied property taxes. In simplest terms, the tax bill that homeowners receive in October is calculated using the following formula:
Assessed Property Value X Tax Rate = Taxes Owned
How are local tax rates determined?
Each jurisdiction in a county is responsible for establishing its own tax rate. These jurisdictions include the school district, county, city, local community college, and emergency services. This is how these local governmental/special entities raise money to help pay for public schools, city streets, county roads, police departments, fire protection and many other vital programs.
A taxing jurisdiction will have to first set and approve a budget for the coming year. They then determine all known revenue and subtract that revenue to determine if there is a deficit. This deficit is then divided by the total property value within a county and this establishes a tax rate for that jurisdiction.
Deficit – 1,500,000 / Total Property Value – 230,800,000 = Tax Rate .650 %
New for 2020, under SB-2, Texas cities and counties can now only collect 3.5% (a change from 8%) more in revenue from the previous year without voter approval. If these jurisdictions exceed this cap, the public can petition for a rollback election.
How can I lower my property tax bill?
Homeowners have two ways they can reduce the amount of taxes they have to pay. One is, they can contest the property’s appraised value put forth by the appraisal district’s appraiser. And the other, and most common, is to take advantage of the property tax exemptions available to Texas residents.
Most Common Property Tax Exemptions
Exemptions for Homestead Owners
Under this exemption, homeowners can qualify for a reduction of $25,000 in the total appraised value of their home, if the homestead is also the principal place of residence as of January 1 of the tax year. Moreover, there’s a provision for a separate property tax exemption in school districts as well. It allows up to a 20% reduction in the appraised value that cannot be less than $5,000.
Exemptions for Seniors and Disabled Citizens
Citizens who are aged 65 or older, or those who are disabled, qualify for an additional exemption of $10,000 in school districts. Also, an exemption in other local property taxes can be sought for a value that cannot be less than $3,000. Furthermore, once paid, the tax is effectively frozen. In consecutive tax years, a school district cannot charge an amount more than what was paid in the first year after qualifying for this exemption. Widows and widowers whose deceased spouse qualified for the age exemption can continue to receive this property tax exemption, given that they are aged 55 or older.
Exemptions for Disabled Veterans
There are provisions for up to 100% exemption in the appraised property tax value of a primary residence for disabled veterans of U.S. armed forces. For more information, or to determine your exemption amount based on your current rating, click here.
| Exemption | Taxing Unit | Total or Partial | Mandatory or Local Option | Amount |
| General Residence Homestead | School Districts | Partial | Mandatory | $25,000 |
| General Residence Homestead | Cities, Counties, School Districts or Special Districts | Partial | Local Option | An amount up to 20% of the property’s value, but not less than $5,000 |
| Age 65 or Older or Disabled | School Districts | Partial | Mandatory | $10,000 |
| Age 65 or Older or Disabled | Cities, Counties, School Districts or Special Districts | Partial | Local Option | $3,000 |
| Disabled Veterans | Cities, Counties, School Districts or Special Districts | Partial | Mandatory | An amount determined by the percentage of the service-connected disability. |
| 100 Percent Disabled Veterans | Cities, Counties, School Districts or Special Districts | Total | Mandatory | 100 Percent of the property’s value. |
| Surviving Spouse of U.S Armed Services Member killed in Action | Cities, Counties, School Districts or Special Districts | Total | Mandatory | 100 Percent of the property’s value. |
Is your property tax bill too high?
Citizens of Texas can file property tax appeals through a form provided by the appraisal district, or you can download it directly from our website by clicking here. Homeowners also have the option to protest their property tax online using the online services portal on the appraisal districts website. Most large and mid-scale counties have this feature. You can download our free e-book “The Ultimate Guide to Protesting your taxes like the Pros”.
Please Note: Deadlines for filing a property tax protest is May 15, or within 30 days after the tax bill is mailed to you, whichever is later. If you miss this deadline, there may still be a late appeal option if you meet certain criteria. You can call our office and talk to a licensed property tax consultant and can assist you if you missed the appeal deadline. Our office number is (210) 776-1833 or email info@proptaxprotest.com
Need more help with your property tax protest? You can always ask for an expert opinion here.
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