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Property Tax Statements Have Arrived

Property tax statements have arrived!

Notices of appraised property value have been pouring into local mail boxes from County Appraisal Districts across the State of Texas. Folks have taken to social media to vent their outrage at large year-over-year increases in property values assumed by local officials! People are upset at the prospect of their property taxes soaring to unreachable heights! Is this just fear and misunderstanding or is it truly a well-rooted concern and outcry? Let’s dig in.

First, let’s talk a little legal lingo. Tax Code Section 23.01 requires taxable property to be appraised at market value as of January 1st and Tax Code Section 23.23 limits increases of the total assessed value to 10% from year to year if the property is under homestead exemption (note there are a couple of exceptions to this rule). This creates a little havoc when people who are not tax or real estate professionals start trying to decipher their notice. The homestead rules set up instances where there are two different values for the same property on the same tax notice! Appraised Value – Full market value of the property, or in other words the amount the county appraisal district assumes the property will sell for on the open market. Assessed Value – the value at which taxes will be assed. Your homestead exemptions also let you reduce the Assessed Value amount by $25,000 ($40,000 next year) when calculating the school district’s portion of the total tax rate. The difference between the appraised value and the assessed value is referred to as the Homestead Cap Loss. To make things even worse some appraisal districts, such as our local authority here in Hunt County, use Assessed Value on their CAD website, yet they use “Homestead Cap Value excluding Non-Homesite Value (i.e. Ag, Commercial)” on the Notice of Appraised Value.

With the fact that homestead values are capped at a 10% increase per year and many homeowners are seeing an increase in appraised values in excess of 50% (avg 20% in Hunt County), this sets up a unique scenario where a property could actually lose value in years to come yet the county could still increase their property tax revenue because the homestead cap value has lagged so far behind appraised values. For me, that is a pretty hard realization to swallow. I personally do not believe that property values will decrease anytime soon, but I do not have a crystal ball. It just makes me wonder if this was even considered a possibility when legislators took up the homestead cap to a vote?

So here is where we are. Property Tax isn’t going away, or down, anytime in the near future. Property Tax Notices are hard to navigate for most people. Our office has taken countless calls and messages through various platforms with questions about them since the first notices hit mailboxes in Northeast Texas. We have talked mainly about owner-occupied homes and homestead exemptions, but there are many other considerations. From Ag/Timber exemptions, Personal Property and Minerals, to Commercial Real Estate as well as exemptions like Over 65 and Veteran exemptions. The list is extensive and will not get any easier as legislators continue to shape and mold tax law. Don’t be ashamed to ask for help. Understanding your appraised value and how it influences your tax responsibility will also help you make informed decisions when matters that affect property tax rates are on the ballot.

There are many factors to consider when deciding whether or not you are going to protest your property taxes, just one being the inside condition of your home or office. Did you just realize that the county appraiser has never been in your home yet still gave you a market value that matches the neighbor’s fully remodeled and modernized home sales price? Yep. That’s what they do. We can help you understand your appraisal notice, help you decide if you should protest your appraised value, help you prepare to protest, and even protest on your behalf.

Is this just fear and misunderstanding or is it truly a well-rooted concern and outcry? Maybe it is both. I will let you decide!

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