Montgomery County is growing at a stunning rate. Still, demand continues to exceed the real estate supply, no matter how many new homes are built. This is driving home values in the county through the roof. According to realtor.com, as of February 2022, listed home prices have grown 10.4% year-over-year in Montgomery County.
For people who already own a home in Montgomery County, the rising home values are beneficial for resale and refinancing. However, they can also add stress to family budgets through fast-rising property tax bills. And because forecasts predict continued increases in home values, homeowners’ tax bills will only keep getting larger.
Fortunately, Montgomery County property owners have remedies to cap or even reduce their tax liabilities.
Your property taxes in Texas are based on a tax assessed value of your home combined with the tax rates charged by local tax units. For example, school districts apply one tax rate to your home’s assessed value, while your city or county will apply their own rate to pay for services like roads and police departments. If you have a home assessed at $300,000 and your local school district charges a (hypothetical) tax rate of 1%, you will pay $3,000 annually in property taxes for the schools.
Tax-assessed values are determined based on the market value of your home on January 1 by the Montgomery Central Appraisal District (MCAD). The MCAD uses mass-appraisal methods and public records to calculate your home’s market value. But because of the sheer number of taxable parcels in the county, MCAD does not spend the time to do a detailed, individualized appraisal of your home.
Therefore, the assessed value determined by MCAD may not correctly reflect your house’s actual market value.
If the appraisal value assessed by MCAD is incorrect, your tax bills may be too high. Following the example above, if MCAD determines an assessed value of $300,000, but your home’s market value is in reality only $250,000, you’ll overpay your school district taxes by $500 annually. And that is only your school district taxes, not the total of all the taxable units in your area that you have to pay.
Fast-rising market values mean that the models MCAD uses result in similarly growing tax-assessed home values. And paying 10% or more in property taxes each year will significantly affect your household budget.
Texas law caps the amount a home’s assessed value can rise over the previous year to prevent homeowners from going broke over escalating taxes. However, the cap is only for a homeowner’s principal residence and does not extend to second homes, vacation homes, or investment properties. You cannot claim or list any other house as a primary residence to qualify for a capped appraisal value.
A homestead exemption is an excellent way to lower your property taxes. For example, every Texas school district is mandated to offer a $25,000 homestead exemption. While this does not diminish your assessed value, it does reduce the amount applied to local tax rates. Keeping to the example of a $300,000 home, $25,000 is exempted before the school district’s 1% tax rate is applied, resulting in $250 annual savings.
So, having a homestead exemption will lower your tax bills and prevent your home’s assessed value from rising more than 10% in a single year.
Texas homeowners must apply to receive any homestead exemptions. So, if you have not yet secured all your qualified exemptions on your principal residence, that is a great way to lower your bills.
But more significant property tax savings can be achieved by protesting the MCAD’s tax-assessed value of your home. A property tax protest is a remedy guaranteed to all Texas property owners by law. During a protest, you can present evidence that the MCAD incorrectly valued your home, possibly through inaccurate data, faulty modeling, or incomplete information.
A successful Montgomery County tax protest can offer significant savings. Homeowners can receive a hearing in front of a group of local citizens known as the Appraisal Review Board (ARB) to dispute their home’s assessed value. The ARB has the power to instate a reduced assessed value, thereby lowering all your tax bills even before exemptions are applied.
The professionals at Watchtower Protest can represent you through every step of the Montgomery County tax protest process. Plus, our services are always risk-free for homeowners, so you don’t pay a cent unless we reduce your tax bill.
Take the first step towards property tax savings today by signing up online for our services.
Discover how Computer Assisted Mass Appraisal techniques could wrongly calculate your home's Texas property taxes