Fear not your rising tax appraisal
The real estate market is redhot, and your property tax appraisal likely reflects that. The average selling price of a Texas home in 2021 was up 18 percent.
Tax rates across the state are now dropping, and tax bills, though rising, are increasing at their slowest rate in years — well below the growth rate of Texans’ personal income and inflation. Recent research at the Texas Taxpayers and Research Association found total savings in 2021 topped $6 billion, or 8 percent off the average tax bill.
All property owners are benefiting from 2019 legislation limiting property tax growth. Now, as property appraisals rise, most taxing units must cut their tax rates, as they are limited to an overall revenue increase of no more than 2.5 percent percent (schools) or 3.5 percent (counties, and most large cities and special districts) without voter approval.
Also, all homeowners are protected by a 10 percent appraisal cap (designed just for a situation like today’s real estate market). School taxes also are frozen for homeowners who are 65 or older or disabled.
On May 7, Texans voted to further limit property taxes by passing two constitutional amendments. The first, Proposition 1, will cut taxes for the elderly and disabled by reducing their frozen amount as school tax rates decline. Proposition 2 will raise the exemption for all homeowners from $25,000 to $40,000, saving the average homeowner about $175 annually.
Still, what about those appraisals? Property owners in Texas have two protections: property must be appraised at its market value (before exemptions ), and an appraisal must be comparable to that of similar properties.
If you think your appraisal is higher than your home’s market value, compare it to your Jan. 1 values on popular real estate websites — Realtor.com, Zillow or Redfin, for example. If your appraisal is substantially higher, challenge it with the appraisal district. If your appraisal seems right but similar properties in your neighborhood are appraised lower, you may be able to reduce your value by showing that to the appraisal district.
After all this, if you now think your appraisal is fair, congratulations! Your tax bill is zero. That’s because your appraisal doesn’t set your tax bill; it simply determines your share of the overall property taxes a jurisdiction wants to raise. Your tax bill will be set this summer when local governments adopt their tax rates. Hearings where rates get adopted are poorly attended, but that shouldn’t stop you.
If you want your voice to be heard, go to Texas.gov/ Property-taxes this summer to look up what rates your local jurisdictions propose to adopt and see how much that will cost you. If you can’t attend the public hearings where rates are set, the website will let you submit comments.
If you still aren’t happy with your tax bill, don’t despair. Texas has a surplus that legislators in 2023 can use to curb property taxes even further — assuming they hear from you.