Texas Property Tax Protest
It's that time of year when we get a nice little letter from the county appraisal district to let us know how much we will pay in property taxes for the year.
If you're like me, you kind of wince when you see the letter and then get wide-eyed when you open it and read the updated market value. This year my property went up an additional 6 percent after going up 52% last year.
In this post, I'm going to explain the differences between market value and assessed value, what exemptions to put on your property if you don't already have them, what comps to use if you want to file a protest, the timelines to do all of this, and some general things to keep in mind. Lots of information here but all important to know if you're a homeowner in Texas because there have been changes to some of the laws from the last session.
By the way, if we haven't met yet, I'm Jennifer Shannon. I'm a Realtor and real estate broker at Keller Williams. I've been a licensed Realtor for 17 years and I love helping people with all things real estate, such as property taxes.
So, let's start with some definitions.
On your appraisal notice, you're going to see something called your market value and another number for your assessed value.
The market value is the value the county appraisal district places on your property for the previous year. So, for the letter you're getting now, it means your market value has been determined by sales all the way from January 1, 2022 to December 31, 2022. You know, that would be the year we had our highest highs and some really low lows when the market stalled in Q4 from high interest rates. The other definition to know is your assessed value. Your assessed value is the amount that you're actually getting taxed on. Some people have the same market value and assessed value. Others don't. You pay your taxes based on the assessed value.
If you have a homestead exemption on your property, then your market value and assessed value are likely different.
So let's talk homestead exemptions. You can now file for your homestead exemption at any time. It used to be you could only file at the beginning of the following year after you moved in. The homestead exemption in Texas has two portions.
The first is the exemption portion.
This is a portion of the value that comes off your assessed value before they apply the tax rate to it. School districts are mandated to give a $40,000 exemption from the assessed value. In addition, different counties in Texas may offer more exemptions. You can also apply for a 65 or older exemption, a disability exemption, and a military veteran exemption.
The second portion of the homestead exemption is the homestead exemption cap. This is a limitation on the assessed value of 10% over the prior year. So if last year you were assessed on a value of $300,000, then this year you can only be assessed on a value of up to $330,000.
This cap doesn't apply unless you've been in the property for a full calendar year.
If you move during the year, you can prorate your exemption onto the property. This is a new rule from the last session that benefits those who have bought a home in the previous year.
If you have not filed your homestead exemption yet and would like to, The completed application and required documentation are due no later than April 30 of the tax year for which you are applying. A late residence homestead exemption application, however, may be filed up to two years after the delinquency date, which is usually Feb. 1.
So, now how do you protest your market value?
Remember, we have market values at one level and assessed values at another level. When you're deciding to protest, you have to determine if the market value - the only value you can protest - should be less than the assessed value that you're being taxed on.
If there are no comps or evidence to prove the market value should be less than the assessed value, it will not change your taxed amount.
If you would like to get comps to see if there are any sales from 2022 that would support a lower market value, I am happy to provide those for you. Just visit TexasHomeTaxes.com and enter the needed information about your property so I can send those to you.
One question I get asked a lot is how there can be such a wild swing among neighbors and just in values in general. Well, Texas is a nondisclosure state, meaning what you paid for your house is not a matter of public record. So the appraisal district doesn't have all of the sales data.
They actually do this thing when you move in where they'll send you a letter asking for what you paid for your house. I'd wait to do this until the next year if what you paid is less than your new market value.
How quickly do you need to do this?
You have until May 15 to protest your market value. Or, if your notice hasn't been mailed by April 15, you have 30 days after the date it was mailed to protest.
If you are thinking of selling your home this year, you can still lower this amount and it won't affect your list price. Your appraisal district market value has no bearing over your list price or the value an independent appraiser will put on your home. So you can still go to TexasHomeTaxes.com to get those comps on your home.
So that is your quick Property Tax Protest Lesson for the day. If you have any questions on this or want more information for comps on your home, visit TexasHomeTaxes.com.
And one last thing... I do need to add the disclaimer that I can’t guarantee any results from the information I'm providing you. I am not a property tax professional nor am I a licensed appraiser. I am a Realtor who is happy to provide you with sales comps, though!