Why Are My Property Taxes Higher Than Neighbors?
Property taxes are high in Texas, but it is even worse when you pay more than your neighbors. Texas’ constitution requires that all property taxes be uniformly assessed. This means your property tax bill should not be higher than that of a neighbor with a substantially similar house.
Luckily, through a Texas property tax protest, you can contest your taxes, especially if you’re paying more than others in your neighborhood.
Each individual parcel of Texas land is given an assessed value for property tax purposes. Your individual home’s property taxes are based on this assessment. The assessment is completed by a local appraisal district.
Each county in Texas has its own appraisal district, and each appraisal district has numerous local taxing units within its jurisdiction. For example, you may be subject to property taxes for local schools, your county government, your city government, and additional specialized taxing units. Your property taxes pay for teachers and police officers, roads and libraries, and other governmental services.
Your local taxes equal your home’s assessed value multiplied by each local taxing unit’s property tax rate. For a simplified example, if your house has a $300,000 valuation and your local school district’s tax rate is 1%, you’ll pay $3,000 annually for school taxes.
Because you and your neighbors will be subject to the same tax rates, if your property taxes are higher, it’s because your home has been assessed at a higher value.
According to the Texas Tax Code, your local appraisal district is required to assess your home at its market value as of January 1 of each year.
The fair market value of any piece of real estate is the price it would sell for on the open market. Some factors that can affect your home’s market value include square footage, lot size, number of bedrooms and bathrooms, the age of the home, and location, which accounts for the neighborhood, school district, and access to local services.
These factors can typically be standardized when evaluating market value. For example, all homes in the same neighborhood with 2,000 square feet and 3 bedrooms offer a certain base-level market value. However, your home may have unique features affecting its value that are not considered by these standard metrics.
Individual characteristics of your house may affect your home's market value, sometimes leading to higher valuations. For example, if you put an addition on the back of your home, adding 750 square feet and an additional bathroom, your home may differ from your neighbor's. The addition will likely increase your home's value, leading to higher tax bills.
The converse can also be true. Your home may have a leaky roof or cracked foundation that negatively affects its value. These factors may not be considered in your home's assessment, leading to inflated property taxes.
Still, your property’s tax-assessed value should equal its market value. If your home is substantially similar to your neighbor’s but your taxes are higher, the difference may be attributable to the inherent inaccuracies of mass appraisal methods.
Because there are too many homes and properties in a county for an appraisal district to individually assess, districts apply mass appraisal methods, such as using mathematical modeling and algorithms. The algorithm uses public data such as square footage and the home's age, but cannot account for unique characteristics.
Filing a property tax protest can help you reduce your property tax bills.
During a protest, you can present evidence that your home is not valued uniformly compared to your neighbors. You also can contest an assessment because it failed to account for individual characteristics of your property. Though collecting and presenting this evidence may seem daunting, you can have an ally on your side.
The professional property tax team at Watchtower Protest can represent you throughout the process. Our staff will compile data showing your home’s assessment is incorrect. If you win your protest, your property tax bills will be lowered.
Best yet, Watchtower’s services cost nothing out of pocket. So, sign-up for our tax protest program through our website today.
Learn about the various property tax exemptions for disabled persons and veterans in Texas, plus other ways to lower your tax bills.