Understanding property taxes in Texas

If you’re in the market for a home in South Texas, here is a quick guide to understanding one of the biggest financial considerations when buying a house – the property tax:

• What is a property tax?

Under Texas State Law, the property tax is used to fund crucial local community services. Your tax money is used for the development, operation, and maintenance of schools, local infrastructure, medical services, police and fire departments, and other public resources.

• Who levies property taxes in Texas?

In Texas, property taxes are levied by local taxing units. These include city or town governments, as well as special districts like junior colleges, hospital districts, and water districts. These taxing units are responsible for setting the rates, collection, and the settlement of disputes and appeals.
The state government does not keep any local tax records on properties owned. Neither does it receive any benefits from collected taxes.

• How does the Texas property tax system work?

Each property tax year is divided into the following four stages:

• Appraisal

Each county has an appraisal district or office that estimates property values within their jurisdiction. Appraisals begin on January 1st every year, based on prevailing market conditions on that day.
Appraisal districts also process applications for tax exemptions, agricultural property appraisals, and other forms of tax relief. These processes can take until the end of April to complete.

• Protest

From May to July, an appraisal review board evaluates protests filed by homeowners who dispute their appraised property values or were denied tax exemptions.
After this process, a final list of taxable properties is created by the appraisal district and distributed among the local taxing units.

• Adopting the tax rates

Between August and September, elected officials of the various taxing units adopt the tax rates for their operations and debt payments.

• Collecting the taxes

Tax collection typically begins around October 1. Taxpayers have until January 31st of the following year to pay, after which penalties and interest charges will apply. Legal action may be used to collect unpaid taxes starting on February 1.

• How do property owners know that property tax rates are fair?
The Texas Constitution protects you, the property owner, with these five basic principles that govern the state’s property tax system:
• Property taxes must be equal and uniform.

By basing tax rates on individual property values, you are assured that you pay no more than your fair share for your property.

• Properties must be taxed based on current market value.

Exceptions to this rule only apply to agricultural land and timberland, which are taxed based on the value of its crops or livestock.

• Each property must have a single appraised value.

The local taxing units to which you pay taxes cannot assign differing values to your property.

• Federal or state law may determine certain tax exemptions.

Exemptions apply to all or part of your party.

• Property owners have a right to be notified of increases in their appraised property value.

Yes, but only at face value. At 1.9%, Texas property rates rank 6th highest across the country. This number is misleading.

Consider that in terms of total tax burden, Texas is in the bottom half of the list. This is because Texas is one of just seven states that don’t impose a state income tax, with sales tax rates also fairly low.

Discover exceptional residential and acreage real estate opportunities in George West, Three Rivers, and many more South Texas communities with Desert Flower Realty. Call us today at 361-449-2051 or send an email to [email protected] for more information.