I'm shocked (and still somewhat skeptical until I get my bill), but it looks like the homestead exemption will result in my 2022 taxes actually being lower than my 2021 taxes. You can check yours at the link below. Note that the "TRAVIS COUNTY HEALTHCARE DISTR" estimate for 2022 hasn't been included, but assuming it stays somewhat close to the 2021 level, my overall taxes will actually be lower. I guess those without the homestead exemption are getting such big increases that it resulted in a decrease for some with the exemption.

https://travis.trueprodigy-taxtransparency.com/taxTransparency/propertySearch

EDIT: Tax bills now available online here:
2022 TCAD Tax Bill

Same. Hooray?

50% of my tax bill goes to AISD. Such a horrible school district.

BrokeAssAggie said:

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50% of my tax bill goes to AISD. Such a horrible school district.

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I don't have kids in school (at AISD or otherwise) so I don't follow it that closely, but seems that AISD might be in better shape if they didn't have to send so much money into the Robin Hood program. I'm all for every kid in TX getting a good education, but putting the exact name price on that education regardless of the local cost of living seems shortsighted by the state legislature.

HB3 compressed you district property tax rates with state GR. The district isnt lowering their rates, the state is. The higher the property value growth, the more the state compresses the rates.

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AISD might be in better shape if they didn't have to send so much money into the Robin Hood program

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Money they send back in surplus of entitlement. They are simultaneously shrinking in student population, raising more money with less tax effort than any district in the state. If they want to reduce recapture they can tax at minimum allowable rate, and let people keep their money to begin with.

In short, austin funds over entitlement and gets crappy results. They pay so much recapture because they would rather tax you to the maximum and send away most of it than they would rather tax you at a minimum and operate with as much revenue as most districts in the state.

I am one of the ones that moved into a new home last year (not new to Austin but new to home ownership) prior to updated Homestead Exemption law change and get to bear the brunt of the increase since I went under contract in September of 2020 but get to be taxed at the January 2022 value. Bittersweet I supposed because at least I have house in Austin and didn't overpay? Just need those taxes to be used for good things! Here's to hoping!

AISD tax rate is 1.0617. By comparison, Dallas is 1.248235 and Houston is 1.0944. I'm sure there's plenty of waste in the AISD budget, but their rate doesn't seem to be high when compared to other large urban districts. If I recall, the minimum rate set by the state is 1%, so it doesn't seem like they could lower it much even if they wanted to.

Aston 91 said:

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AISD tax rate is 1.0617. By comparison, Dallas is 1.248235 and Houston is 1.0944. I'm sure there's plenty of waste in the AISD budget, but their rate doesn't seem to be high when compared to other large urban districts. If I recall, the minimum rate set by the state is 1%, so it doesn't seem like they could lower it much even if they wanted to.

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You're conflating tier II with tier I tax rates. Current Tier I minimum is about .81, max is .89. Tier II enrichment pennies are up to an additional 17 cents, and get recaptured at progressively higher rates. Dallas has also been compressed to the minimum tier I rate. 70% of all districts in the state are now compressed to the minimum. Safe to say the legislature didnt see this kind of property value growth coming, will be expensive- but does allow people to see reductions in property taxes which I guess is the point.

The maximum M&O tax rate for any district in TY 2022 will be $1.0641 ($0.8941 + $0.17).

TTARA wrote about this a few months ago, predicted most texans would see tax burden decline.

You're obviously much more knowledgeable than I am on this subject. I guess you could say I conflated tier I and tier II - but to be honest, I have no idea what those terms even refer to. When I get time I'll read the link you provided.

I do have a question about future tax bills. With the dramatic increase in appraised values this year, the tax burden seems to have significantly shifted to those without the 10% cap in assessed values for homestead owners. Assuming values stabilize (perhaps a bad assumption, but for the sake of argument) - is it safe to also assume that homestead claimants will see their bills rise significantly more (as a percentage) than non-homesteaders? I realize HB 3 and SB 2 limit the budget increases to less than they would have been previously, but it seems to me us homesteaders can expect tax increases until our assessed value catches up to our appraised value as long as there are any budget increases and the appraised values don't increase proportionally.

Compression applies across the board, and once it happens, is permanent in the system. So while the school districts are funded as if they are taxing at $1, they will set rates at whatever the state compresses to on any given year in perpetuity. Its really not much related to the homestead exemption. While those are nice, they do shift tax burden onto non homestead property owners.

So, for clarity, lets say Austin is getting funded at a dollar of tax effort, but only levying .81 worth of tax. .81 is the new $1, for all intents and purposes. The state fills in that gap with general revenue. That is now the state's burden, not the property tax payer. Any year the levy of a district (appraisal + rate) increases by more than 2.5% more compression will happen, shifting the burden further to the state and away from the property tax payer.

So to simplify, the most your annual levy can increase on M&O is 2.5%, anything over that will compress your rate. People will see their rates compress to a HUGE degree in the next tax year because property value as grown by something like 15-24%. Lets say is grew by 24%, so 24-2.5 means the state would use that 21.5% extra to compress your tax rate.

I should also note, everything I said only applies to school district M&O, which is around half of your tax bill. Other entities can increase levees by 3.5% before having to go the voters.

Thanks for the reply. It helped clarify, but also confirmed our tax system is pretty damn complicated to understand. My primary motivation is trying to figure out if I'll be able to retire here in a few years (well before the age 65 limits kick in).

I know income tax is a dirty word in this state, but it would be a helluva lot easier to understand that when my income drops significantly, my income taxes would also. I know we'll never have one in TX (and most people think if we did, we'd just end up with high property taxes and an income tax), but strictly from a simplicity standpoint it seems preferable.

Once you hit 65 your rate can only go down as you are locked in at your current rate and you still benefit from future compression. (please verify that statement with a professional, slightly outside my area with the exemptions)

Ragnar Danneskjoldd said:

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Once you hit 65....

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That's the catch. I'd like to retire well before 65. I know every tax system is going to have winners and losers, and in TX early retirees are hit fairly hard (as a percentage of income). Definitely a first world problem if I'm able to retire early but choose to move to another state to avoid a heavy tax burden, but also a reminder that TX isn't always the low tax mecca that some think it is (not saying you fall into that category).

Aston 91 said:

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Ragnar Danneskjoldd said:

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Once you hit 65....

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That's the catch. I'd like to retire well before 65. I know every tax system is going to have winners and losers, and in TX early retirees are hit fairly hard (as a percentage of income). Definitely a first world problem if I'm able to retire early but choose to move to another state to avoid a heavy tax burden, but also a reminder that TX isn't always the low tax mecca that some think it is (not saying you fall into that category).

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agree completely. Texans actually have a similar tax burden to Californians. Hopefully the legislature will continue to use surplus revenues to buy down property taxes so people on fixed incomes dont get taxed out of their homes, and so people can actually, one day, truly own their own property.

Most tax rates have not been established yet, so I would hold off any celebrations.

tamc93 said:

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Most tax rates have not been established yet, so I would hold off any celebrations.

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Tax bills are (finally) available online here:

https://tax-office.traviscountytx.gov/properties/taxes/account-search#:~:text=Are%20you%20looking%20for%20your,mailed%20notices%20by%20mid%2DDecember.

Ours actually went down by about $100. Still higher than I think it should be, but at least it didn't increase over last year.

BrokeAssAggie said:

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50% of my tax bill goes to AISD. Such a horrible school district.

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Vouchers!!