In Texas, you pay property taxes based on your county tax assessor’s appraised value of your home or property. The assessed value of your real estate is determined by the property's market value. Therefore, each time your home’s value is assessed, it may change based on market conditions.
Local appraisal districts in Texas are required to provide notice of any change in the assessed value of your property. Property owners receive a formal Notice of Assessment regarding updated property values.
Texas law requires each county to assess real estate every year at its market value as of January 1. When assessing the value of your property, the appraisal district should consider the conditions of the real estate in its current situation and what development the property can support. For example, an empty lot may have a higher value if commercial development is ongoing in the surrounding area.
Tax assessments are used to calculate the property taxes owed on all real estate in Texas. Once the county appraisal district determines a property’s value, the tax assessed value of the land and its buildings is reduced by any exemptions the property owner has received.
One standard exemption is the $25,000 homestead credit for living in an owner-occupied residence. If you qualify for a homestead exemption, you can use it to lower your local school district property taxes. Many other taxing units also offer a homestead exemption.
If you receive the homestead exemption, you can deduct the $25,000 credit from the assessed value. Say you have a property assessed at $300,000. Then, your actual tax bill is calculated off a $275,000 property.
Once exemptions have been deducted or removed, the remaining value is taxed at the local tax rate. For example, if your school district taxes at a rate of 1% of the assessed value, your bill on the $275,000 value after exemptions will be $2,750.
Each county appraisal district is required to send the property owner a Notice of Assessment or Notice of Appraised Value if they intend to raise a property’s taxable value. Increasing the assessed value will result in higher property tax bills.
The law requires an increase in assessed value to be communicated by May 1 or as soon as possible if that deadline is not feasible. For residential homesteads, the deadline for sending the Notice of Assessment is April 1 each year.
A detailed notice of increased value must include certain pieces of information, including:
● A description of the property.
● A note that the assessor does not decide on tax rates, only assessed value.
● The previously assessed value of the property.
● The new assessed value of the property.
● An explanation of any exemptions that may be available for the property owner.
If you receive a Notice of Appraised Value on your real estate, you may be livid about having to pay even more money to your local government. Fortunately, Texas law allows you to dispute the increase.
Texas law allows all property owners the right to challenge the assessed value of the property. The Notice of Appraised Value should include a form on how to submit a protest, and most counties also allow challenges to be filed online.
Once you have formally filed a protest to your property tax assessment, you will receive a hearing before your local appraisal review board (ARB). Every Texas county has its own ARB, made up of local citizens tasked with resolving issues between property owners and the appraisal district.
You can have a representative at an ARB hearing to help present evidence that the assessed value of your property is too high. The appraisal district will also present its own evidence, then the ARB will set a final assessed value of your real estate.
If you successfully challenge your property tax assessment, you will have a lower market value of your land. This lower value will result in lower property tax bills and more money in your pocket.
There is no guarantee you will succeed in a property tax challenge. But the experienced professionals at Watchtower can help you reduce the assessed value of your property. Our team has successfully assisted clients in ARB hearings, so we know what needs to be done to lower your property tax bills. And Watchtower’s services come with no risk to you. You won’t spend a dollar unless we can get your property tax assessment down!
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