Texas real estate owners today are caught in a costly paradox: as property values decline, the county tax assessor’s office paints a far rosier picture. Home sales are flat, yet property taxes continue to rise. Visit the local county tax assessor’s office and most likely you will see large blowups of articles raving about the robust Texas economy and housing market useful information if your task happens to be convincing homeowners to accept, and pay, the yearly tax increase!
The reality is the state’s need for continued, increasing revenue. Since Texas does not collect income taxes from its citizens, the state’s greatest source for income is property taxes. This revenue funds fundamental programs like schools, and city governance and maintenance. In most counties the tax rate is about 3% of the retail price of your home, which would probably make sense if that percentage corresponded to the rise and fall of the actual market. In fact, most states collect the appropriate property taxes at a moderate rate of increase each year.
Not so in Texas. Texans have some of the highest property taxes of any state in the union. And they increase every year, as you know, in spite of the fact that your neighbor’s for sale” sign has faded and become part of the scenery in front of his desperately low priced home.
Homeowners who live in their Texas homes and who claim a homestead exemption will plausibly see continued increases in their property taxes, no matter what the actual market is doing. Increases of up to 10% per year are not uncommon. And if that doesn’t get your attention, a few consecutive years of such an increase probably will. It happens every year, even when the economy is soft. Homeowners can easily be swept along in this rising tide of ever increasing taxes of they do not protest their tax assessments. As each year passes, the tax increases compound.
A recent CNNMoney.com article by Les Christie, sites this particular problem and discusses the surge in homeowner requests for lower tax assessments — especially in states which have enjoyed significant real property value increases over the past decade. Now that the economy is universally in decline, more tax payers are contesting their property assessments, and rightly so. Yet, city and county budgets are equally strained. Therefore, learning how to fight your property taxes now will improve the likelihood of actually obtaining a lower rate when the next opportunity comes.
An Achievable Battle
Less than 7% of all homeowners argue their property taxes. Most believe that they probably won’t win, or that their home’s value is about the same as everyone else’s. Many homeowners simply don’t know how to go about it or where to start. Some folks assume the hassle will prove overwhelming compared to the tax relief they may get.
In truth, fighting your property taxes with the county tax assessor takes very little time, and your dispute could save you tens of thousands of dollars when spread out over the time you own your home. The smart homeowner can gain ground on this escalating problem by tackling it as soon as possible, for tax decreases you might obtain could take awhile to have an effect, since they are simply canceling out the years your artificially inflated taxes went uncontested. In any case, the money that you can put back in your pocket with the next tax cycle will certainly justify your investment of time and effort. It just makes sense to start this year.
Research Your Options
The property owners who have been successful in lowering their taxes will tell you to make use of the internet. Start with a Google search for Texas property taxes, or Texas property tax help. Study up on the information available and then prepare to collect some vital statistics.
Organize and Document
Check your current tax records. Ensure that the square footage of your property is correct. Recently a Texas resident provided blueprints of his house to correct past years’ miscalculations, to the tune of over $700 for each year! That one correction alone ensured significantly lower taxes for that homeowner, proving it’s wise to look over your existing tax documents.
Compare your taxes with your neighbors’ property taxes. Understand the local tax climate. For all you know, you could be paying much more than them; this information will work to your benefit.
Make sure you have all the paperwork you need for your hearing. Keep organized files of your ground work.
Be sure to file for a protest! You have several weeks to do so following receipt of your property tax assessment, but you must file before May 31st. If you do not have the form, contact your county office and ask for it, or check our website www.PropertyTax-Help.com. After mailing your request you must then go to the county tax assessor to file your informal request.
Keep it Up!
The bad news: Expect your taxes to start creeping back up if you miss even one year disputing them. Texas real estate owners really do themselves a disservice by NOT staying on top of their rising property tax situation, so you’ll need to gear up for an annual trip to the county tax assessor.
The good news: Experts agree that most people can cut half of their increased value just by showing up at their hearings! But you have to keep doing the yearly legwork or your taxes will continue to increase. If you devote more time in really understanding the issue, and commit to doing just a little more work, you’re savings could be substantial.