Holiday season is also property tax bill season! So while you’re considering how you’re going to spend on holiday gifts, you can also wrestle with a bigger tax bill!
If your taxes just came out, and the number surprised you, then this post is for you. I’d like to, first, diagnose why your tax bill is what it is. Second, to help you get ready for next year, so you can take steps to keep your property tax bill as low as possible.
In the spring of each year, preliminary tax numbers are released. This is the time both to protest your tax appraisal and also to declare tax exemptions. In the fall, final tax numbers are released and taxes are due. So, it’s too late to protest your 2017 tax bill, but it’s the perfect time to get a handle on 2018, and keep your taxes as low as possible going forward.
If you’re going cross-eyed just thinking about reading this, then call or email me. I’ll be happy to answer questions individually.
This year’s taxes-understanding the numbers
So let’s start with your recent bill. Why is it so high? Your taxes are calculated as follows:
- The county appraises your property, or makes an educated guess about what it’s worth.
- They apply any exemptions you have, the most common being HS for Homestead Exemption, if you live there as a primary residence. Other exemptions include SO for solar panels, DV for disabled veterans and so forth.
- They apply your tax rate, which depends on where your property is located.
- They produce a total tax number, and bill you.
To examine this for yourself, go to the Travis County Appraisal District Site, the Property Search section.
Enter your property address. This search can be a bit finicky, so try it a few ways.
First, check your exemptions. Under the first section, “Property”, you’ll find your current exemptions toward the bottom right. If you’ve lived in your home since at least January 1, 2017, then it should have at least “HS.” If not, don’t miss the next section.
Next, scroll down to “Taxing Jurisdiction.” This section will show you your total tax rate, how that tax rate is broken down between schools, the city, the county etc.
If you multiply your tax rate by your taxable value, you should get the number on the far right under “Estimated Tax.”
The numbers at the bottom show your total tax bill. “Taxes w/ current exemptions” should equal the bill you received. “Taxes w/o current exemptions” shows how much you would pay if you had no exemptions. Again, if you don’t have exemptions but think maybe you should, read on.
Getting ready for next year
This section will address what to do if, upon looking into your current property taxes you thought:
There’s no way my property is worth that!
I don’t have the exemptions I should.
There are only two things you can influence to lower your tax bill: Your appraised value and your exemptions. We’ll address both here.
Before we dive in, it bears mentioning that a tax appraisal and a bank appraisal, the one the bank gave you when you were purchasing, are two totally different opinions of value, produced by different entities for different purposes. In this email, I’ll be referring to tax appraisal only.
If you think your property is appraised too high, you’re not alone. Because Texas is a non-disclosure state, property sales prices are not disclosed to the county at closing. What this means is that the county appraiser is using incomplete data to determine an appraised value for your property, for the purposes of charging you property tax. As a result, the tax appraisal process is highly error prone. Frequently, owners do not agree with the appraised value. In many cases, the market doesn’t agree with the appraised value either!
If you think the county appraised you too low, just do a victory dance and keep your mouth shut.
If you think they appraised you too high, then herein lies your opportunity for 2018. If you disagree with your proposed value for 2018, which will be released in early 2018, you may protest. The first step is to file your request to protest before the end of May 2018. The county will then send you instructions on how to go through the protest process. Then, you need evidence to support your lower opinion of value. There are two types of evidence you might use.
The most sure-fire way to protest your property tax appraisal is to use your settlement statement or contract from when you bought it. This is only possible if you purchased recently, specifically within the previous calendar year. So if you purchased in 2017, then you can use your purchase price to protest 2018 tax appraisal. Sharing proof of your purchase price is the simplest method of protesting and your best shot at success.
The second method, which is a bit more involved, is to share comparables, or comps, with the county. Comps are recent sales of homes that are similar to yours. Remember, the county does not have full access to this data. But do you know who does? Real estate agents! Specifically, this real estate agent. So when your new value for 2018 comes out, if you’d like some help gathering evidence to protest, just email me and I’ll be happy to oblige. To make your life a bit easier, I’ll send out a reminder in early 2018.
Once you’ve gotten your value to a fair price, you’ll also want to ensure you’ve applied for any exemptions that you qualify for. The most common is the Homestead Exemption, which you may apply for if you reside in your property as a primary residence. This removes part of the value of your property from taxation, and also caps how much more the county can charge you each year. In other words, it not only lowers your taxes now, but also keeps them lower over the years you own and live in your home.
That can really add up over time, so I’m always shocked and a bit pained when I meet homeowners who, having lived in their homes for years, never filed Homestead!
To qualify for Homestead, you must reside in the property January 1st of that tax year. So if you buy in, say, February of 2018, then you won’t qualify for Homestead for 2018, but by 2019 you will if you still live there.
That’s a lot of data, and I hope you found it helpful! If you’d like to hop on a call with me to answer more specific questions, I’d be happy to do so. I’m also happy to respond to questions by email.
Find your current appraised value, tax rate, and exemptions: Travis CAD Property Search
Protest your next tax appraisal: https://www.traviscad.org/forms/forms-protest/
File for exemptions: https://www.traviscad.org/forms/forms-exemptions/
A handy guide and FAQ about Homestead Exemptions: http://www.austintitle.com/downloads/TexasHomesteadExemption.pdf
And a last note. If you bought recently and your taxes jumped significantly, check out this post on my website that explains common reasons why.
And again, if you want more specific questions answered, or are more confused than when you started, just call me! Always happy to help.