What Makes My Property Taxes Skyrocket?
/The timeless question that us Texans have always been asking. Let’s face it, in a general sense, property taxes in Texas have been increasing, and are going to most likely continue increasing, every single year. We get it. Most of you literally haven’t made any changes to your home, either internally or externally, over this past year, heck, the past 10 years! Here are some of the top reasons why your property tax bill continues to skyrocket.
Neighborhood Changes:
Hey there, neighbor! Whether you just moved into your new home or other folks are moving in throughout the neighborhood, the real estate market is a strong driving factor when it comes to your property’s taxable value. As homes continue to get sold at higher prices and the real estate market is seeing a constant BOOM here in Texas, this also drives up property taxes.
Yes, we get it. You have been in the same family home that was built back in 1985 and you can’t understand why the CAD is still raising your taxable value. Here are some other factors that seem to play a large role in your property’s appraisal:
Neighborhood Location. If you’re in a highly sought out area around town, with popular shops, restaurants, parks, etc., this could affect how the CAD appraises your perceived property value. This also relates to the real estate market. The higher demand there is for houses in your area, the higher the prices become, thus reflecting in higher property taxes.
Neighborhood Age. Again, this is extremely related to the real estate market. Older homes in older neighborhoods tend to be out-dated in terms of their aesthetic, appliances, landscaping, and overall home condition. Also, these homes were also purchased back in the day at way lower prices, thus reflecting in the property taxes. Vice versa with new homes in new neighborhoods.
The Mass Appraisal Model. This is what the CAD appraisers use to value our properties on a large scale, and it’s how they are able to appraise everyone at different values every single year. The CAD appraisers group similar properties into “Neighborhoods” based on similar quality properties with similar ages, similar market appeal, and also similar political, government, economic and social factors.
Numbers 1-12 represent the different Mass Appraisal “Neighborhoods” that the CAD defines. As you can see, many of the same actual neighborhoods overlap into these separate CAD “Neighborhoods”. This could also drive frustration as property taxable values rise more in “Neighborhood 5” than they did in “Neighborhood 1”, despite both technically being in the same actual neighborhood.
Home Improvements:
Adding onto your home’s exterior is always an alert for a reassessment on your property’s taxable value. This might be one of the biggest factors for an increase on your tax bill! Here are some projects that would most certainly boost your property’s value:
New Roof
New Storage Shed
New Patio or Deck
New Pool
Landscaping: Trees, Sprinkler System, Garden/Flower Bed
As a matter of fact, even home improvement projects done to your home’s interior can trigger a reassessment. “Anytime you modernize existing space or change its physical configuration and use, that square footage can also be reassessed,” according to Realtor, Lexi Newman from her interview in Architectural Digest. That being said, especially with the current COVID climate and CAD appraisers using the Mass Appraisal Model, they won’t necessarily know about your interior upgrades, which could potentially be used to your benefit.
Local Government Budgeting:
This one is pretty straightforward. The local government sets their tax rates so they can budget and fund certain projects and initiatives. Major ones that you see reflected on your property tax bill are typically the public school system, local roadway or construction improvements, and healthcare and emergency services.
Texas not having an income tax can be a double-edged sword because yes, we do not have to pay taxes on our income, but also yes, we see a higher property tax rate to make up for that. All of these tax rates set by the government vary depending on your county and can change every year.
So...What Can I Do About It?
A low-hanging fruit that you could grab that would actually give you a significant advantage would be to file for exemptions you qualify for. The Homestead Exemption is the most common. This exemption protects the value of residents' homes from property taxes, creditors, and circumstances that arise from the death of the homeowner's spouse. Homestead exemption ensures that a surviving spouse has shelter.
How do you apply for this exemption? You need to submit an application with your County Appraisal District. Filing an application is free and it only needs to be filed one time. The application can be found on your appraisal district website or using Texas Comptroller Form 50-114.
Other exemptions that you could potentially qualify for include: Over 65, Disability, Agriculture, Freeport, or even in rare cases, a Total Exemption.
Use a protesting service. Services like Texas Tax Protest help property owners protest on their behalf, doing the heavy lifting. That way property owners don’t have to coordinate with their CAD and try to come up with all the reasons why their property taxes should be lowered.
Texas Tax Protest utilizes a proprietary software platform that applies big-data algorithms to analyze millions of data records to gather the facts we need to prepare tax protest cases. TTP uses both Sales Comparable Analysis and Unequal Appraisal methods of analysis.
On top of that, Texas Tax Protest is 100% performance-based. Their fee is based on the savings they achieve for you. If there are no savings, there is no fee. That way you will always have the peace of mind that they are working to reduce your assessed value to the best of their ability.
Head over to texastaxprotest.com to learn more about the services they offer. They will walk you through the entire process and set you up to where you don’t have to lift a finger when it comes to protesting your property tax bill every year. Make sure you fill out the contact form so they can contact you for the 2022 protest season!