Texas Property Taxes: Often Unseen, But Always Felt

Owning a home is part of most people’s long-term plans. The pride of home ownership is hard to quantify, but the cost of home ownership is all about the dollars. In Texas, home ownership comes with significant property taxes, an oft-overlooked aspect of the overall cost of a home. Texas has no state income tax and, therefore, property taxes fund local budgets.

In Texas, each county carries the responsibility of appraising your home’s value. This appraisal, based on the home’s location and size, as well as recent sales of similar properties in the neighborhood, is the basis of your property tax. Local entities such as school districts, hospitals, and community colleges set the tax rate. Your payment is the tax on your appraised value.

Some homeowners qualify for exemptions, which lower your appraisal value. A lower appraisal value means you pay less in tax. Filing for exemptions is free, but do your research so you do not waste your time filing for exemptions for which you do not qualify.

If you disagree with your appraisal value, you can see if your district provides an informal review. Protests that are more formal typically go through a review board, which listens to your case and determines any appraisal reduction. There is also usually a deadline for filing a protest; be sure to not miss the dates if you want to file.

Texas is a great state in which to live and own a home. However, it is essential that homeowners understand how property taxes work and how they add to the overall cost of a house. Failure to pay attention to potentially costly taxes often results in financial stress. Do the research up front, understand both the appraisal process and the local tax rates, and you will then be able to understand how property taxes affect your current and future home ownership decisions.

Source: Texas Real Estate