Property taxes

[talltex]

The term exemption throws a lot of people off because it sounds like they don't have to pay ANY taxes. They do pay tax on it but at a greatly reduced rate. The exemption reduces the taxable "assessed" value of the land from the appraisal office valuation to 6.5% of the "appraised value". For example a 500 acre ranch "appraised" at $1,000,000.00 would be taxed at the same price as a $65,000.00 house.

I don't know that that is 100% correct. The land I own with my family is assessed at ~$300K and the "agricultural value" is ~$1K. We pay taxes on the $1K agricultural value. We still pay taxes on the value of the homes on the property, so it isn't like the county/school district aren't getting any money from us.

Depends on the County you live in. Every County in Texas has it's own Appraisal District Office which sets the appraisal values. The actual tax rates themselves are set by the various taxing entities in each County. The County Judge and the County Commissioners set the County property tax rates, the individual towns tax rates are set by the City Council, the School Tax Rates are set by the School Board of Directors in each individual School District within the County, and there may be other taxing entities that also apply, such as a Hospital Authority District which sets those tax rates. You can go to your County's Appraisal District website and pull up several residential, commercial and agriculture properties and see what the differences in each of those rates is in your County. You will probably find some huge variations in what appears to be similar properties because most people never check and file a protest when they see someone else with a much lower apprasial for properties of very similar sizes and ages. Generally, the School Tax is by far the largest portion coming in at over 50% of the total with the City and County each accounting for about 20-25%, and if in a hospital district, about 4-5% of the total.

[srothstein]

You can go to your County's Appraisal District website and pull up several residential, commercial and agriculture properties and see what the differences in each of those rates is in your County.

Just for technical accuracy, you will see the tax rates for each taxing unit. All property is taxed at the same rate by any single taxing unit though, not different rates for different types of properties. For example, if the ISD has a tax rate of 1.04, all property is taxed at the same rate of 1.04 per $100 valuation.

All property is supposed to be appraised at its market value, except for certain specific properties (ag land, private airports, private parks, some inventory like cars or boats). Each of these has an appraised value at market value and an assessed value based on the various rules for that. Ag land is properly assessed based on its average net per acre profit for the type of land (and incidentally this is called ag valuation not ag exemption. The term exemption can irritate those who work in this area).

You can see a vast difference in how closely to market value various types of properties are appraised. This is because it is easier to get the market value of some types of property than others. For example, single family homes are sold so much and the prices are all reported to the MLS by the realtors that almost anyone can look at them and know what the real market value of a house is. Businesses are almost never sold through a MLS and rarely report their real sale price, so it is harder to know true market value.

But Talltex is right that very few people ever bother to appeal their valuation. The two types of appeals you can file are the actual valuation (your house has some characteristic which makes it worth less than what they have it appraised at) and equitable appraising (are all properties in the area appraised at the same percentage of market value). The true value in lowering your appraisal is not just in one year, but it is not allowed to be increased the next year without "clear and convincing" evidence. It also lowers it for a lot of following years when they do a mass appraisal and just say they will increase values by x percent.

[talltex]

You can go to your County's Appraisal District website and pull up several residential, commercial and agriculture properties and see what the differences in each of those rates is in your County.

Just for technical accuracy, you will see the tax rates for each taxing unit. All property is taxed at the same rate by any single taxing unit though, not different rates for different types of properties. For example, if the ISD has a tax rate of 1.04, all property is taxed at the same rate of 1.04 per $100 valuation.

That is correct. I guess I didnt' make it clear that what I meant was you can go to the appraisal board and see what the exact rate is for Residential, Commercial, and Agricultural properties and what the exact percentage rate is for each of the different taxing entities that comprise the total property tax for that specific county. Each individual County controls it's own tax rates, but they are often forced to raise rates as the State shifts more costs to them by reducing the amount the State funds to them. For the last 15 years, the State has been lowering the amount of money it contributes to each school district while continually adding new programs and expanding existing ones that must be funded by the County's school districts-make up the majority of each county's taxes. Those are referred to as "unfunded mandates" - the State of Texas tells the counties that they must do something, but doesn't provide any increased funding to do so from the State, which means the County's have to come up with the additional funds to meet the new State mandates.

[talltex]

Just a new wrinkle that everyone with commercial properties needs to be aware of and decide what your response will be to your local appraisal board. I been receiving letters from my appraisal board for the last 3 years telling me : "As you know, the income generated by a property can have an effect on determining the value of it and we need you to send us copies of your profit & loss statements on each of your commercial properties in order for us to properly determine the correct appraisal value on each of them." I told them I didn't recall ever seeing that request, but if I had, I would not have sent them that info anyway, because that would effectively be an income tax, which we do not have in Texas. I told them the appraised value of real property is the cost to build it new less the depreciation factor, plus market appreciation if applicable. I told them once they started basing the property tax on the buildings housing the local pharmacies, banks, and insurance agencies based on the income they generated per square foot, we could talk. Each year since they have sent me the same letter requesting my financial information and I tell them I still don't recall seeing it.

[Ruark]

The real evil is the agricultural exemption. I pay more property tax on my little plot in a suburban neighborhood than many pay for their hundreds of acres that produce little/nothing. But those folks who own vast tracts of land have bought enough legislative influence that the ag exemption will never go away, nor even be modified fairly.

Yeah, they need to take a look at that ag exemption business. Heck, we used to have 25 acres. I found a guy to run a dozen of his sheep on it. Bingo, ag exemption.

[philip964]

The real evil is the agricultural exemption. I pay more property tax on my little plot in a suburban neighborhood than many pay for their hundreds of acres that produce little/nothing. But those folks who own vast tracts of land have bought enough legislative influence that the ag exemption will never go away, nor even be modified fairly.

Yeah, they need to take a look at that ag exemption business. Heck, we used to have 25 acres. I found a guy to run a dozen of his sheep on it. Bingo, ag exemption.

I have learned that everyone wants someone else to pay the taxes.

[Papa_Tiger]

The real evil is the agricultural exemption. I pay more property tax on my little plot in a suburban neighborhood than many pay for their hundreds of acres that produce little/nothing. But those folks who own vast tracts of land have bought enough legislative influence that the ag exemption will never go away, nor even be modified fairly.

Yeah, they need to take a look at that ag exemption business. Heck, we used to have 25 acres. I found a guy to run a dozen of his sheep on it. Bingo, ag exemption.

Only after showing proper agricultural usage of the property for 5 of the previous 7 years...

[jason812]

I haven't seen much in this. Looks like a 3.5% increase in property tax rate with no say by the subjects is a relief. My personal belief is nobody in Austin, including the governor, should be there after the next election. I hope every last one of them gets primaried.

https://www.kwtx.com/content/news/Texas ... 47811.html

The other bill approved Saturday night wouldn’t reduce property taxes, but would require voter approval if local governments raise rates 3.5% or more. Local governments can currently raise rates by as much as 8% without an election.

When they first mentioned this it was a 2.5% increase with no election. It's safe to say the constituents mean nothing to these people.

I haven't done any digging on my county (Coryell) but I have heard other municipalities pay lobbyists to go to Austin and try to take more of your money. That's right, your money is being used to take more of your money.

[philip964]

The property for the Astroworld, the large amusement park next to the Astrodome and fronting on Interstate 610 Loop, was appraised at 6 million dollars. It sold for 60 million dollars.

That is how accurate commercial appraisals are.

[talltex]

The property for the Astroworld, the large amusement park next to the Astrodome and fronting on Interstate 610 Loop, was appraised at 6 million dollars. It sold for 60 million dollars.

That is how accurate commercial appraisals are.

There are other factors that can affect the value of commercial properties, that have little to do with what improvements actually exist at the time of appraisal. In the case of the Astroworld property (which I am not familiar with), if it was currently vacant - and had been for many years - the existing improvements (rides, buildings, etc..) have almost no value to anyone else and are actually be viewed as a liability, because they will have to be torn down and disposed of before a new business or development can occur. Also, nowdays anytime their is demolition of a structure, there have to be inspections done and signed off to determine what potential problems there may be. The primary one being asbestos components and other environmental hazards used in the construction if it dates prior to the 1990's. If there is any asbestos ( or other restricted product ) found, you have to have a hazmat certified abatement process followed. The land itself is where the value was, but only if the right buyer came along and foresaw sufficient profit opportunities to justify the expenditure. The fact that the Astroworld land sat vacant and unused for so many years is a good example. I think there were 5 or 6 purchasers over the years that were going to build complexes of apartments / condos, shopping center, high rise office buildings, etc...but fell through and never reached the construction phase. I believe the last purchaser was the Houston Livestock and Rodeo association with aplan to spend over $100 million on a new rodeo arena and complex.

[philip964]

https://www.click2houston.com/news/by-t ... erty-taxes

Texas ranked 5th highest for dependence on Property Taxes to raise revenue.

[Liberty]

https://www.click2houston.com/news/by-t ... erty-taxes

Texas ranked 5th highest for dependence on Property Taxes to raise revenue.

True, but when you don't have an income tax, the only way to decrease the dependence on property tax is to decrease spending.

[philip964]

https://www.click2houston.com/news/by-t ... erty-taxes

Texas ranked 5th highest for dependence on Property Taxes to raise revenue.

True, but when you don't have an income tax, the only way to decrease the dependence on property tax is to decrease spending.

And polititions don’t like doing that.

[srothstein]

https://www.click2houston.com/news/by-t ... erty-taxes

Texas ranked 5th highest for dependence on Property Taxes to raise revenue.

True, but when you don't have an income tax, the only way to decrease the dependence on property tax is to decrease spending.

There are other ways to reduce the dependence on property taxes, but they all involve raising some other tax. As in your example, we could have an income tax, but we could also raise the sales tax or the severance tax (tax on taking oil out of the ground). The only reasonable way to compare states for taxation is to compare the overall tax burden on everyone for the state and all subordinate local governments. I think (and do not recall exactly) that Texas actually comes out pretty good on overall tax burden.

[rotor]

Remember also that each illegal going to school cost between 5-10 k and that comes out of property tax.