Howdy Ags,

It's apparent through out several of the local and general forums, people are upset about property taxes. We are all rightfully angry about property taxes. The steady yearly increases on the unrealized gains of our homes is the Cherry on top of the Pain Sundae with the current inflation and economic environment. The common joke from personal finance CPAs/Accountants is "Congratulations! The Government thinks your rich!"

But this year it's outrageous with most people seeing a 30% increase in their home's value across the boards....

There are currently a few Constitutional Amendments on the ballot for voting this spring. If confirmed, they would be beneficial to all types of personal property owners in Texas.


Proposition 1: This is related to those homeowners 65 years or old with their property taxes frozen. When lawmakers in 2019 passed legislation to offset rising property values with lower school district tax rates for all homeowners, those adjustments did not account for elderly and disabled homeowners whose property taxes were already frozen. So this proposition would lower those homeowners' property taxes further, but would not eliminate their property tax cap. The frozen value unfreezes and then refreezes lower each year.

• This might help keep older Texans stay retired in Texas instead of other tax friendlier states.

Proposition 2: The constitutional amendment increasing the amount of the residence homestead exemption from ad valorem taxation for public school purposes from $25,000 to $40,000. Proposition 2 would increase that deduction to $40,000 in value. The measure could save the average homeowner about $175 on their annual property tax bill

• My thoughts are this is a nice jester, but it doesn't do much for those of us living in cities where we've seen annual increases in the thousands.

Link to the Texas Tribune explaining the propositions - https://www.texastribune.org/2022/04/27/texas-proposition-1-2-constitutional-amendment-election/

Early Voting Ends Today and General Voting is on the 7th of May (this Saturday) - Please make sure you go vote, it helps all Texans! Besides who actually likes paying more taxes?!


Other Proposed Changes on the Horizon:

• Reducing or eliminating the Local ISD's cost burden from the assessed milage rates. Most Texan's see a milage rate around $2.00 per $100 of assessed value. There is talks of the state of Texas increasing the budget it spends on education because of the State's Permanent School Fund's increased revenues to remove this from your tax bill. While this has a long shot, this would reduce a significant amount of your property taxes in the thousands. An example in my case - it would reduce my taxes by $1.44 per $100 of assessed value.

What can you do?

• Continue to hammer your elected officials on property tax reforms. Gov Abbott said he is making it a top priority, well we should continue to voice our concerns to see if we can make that a reality faster.
• File for your Homestead Exemption - it will be backdated and helps limit your actual taxes paid from increasing more than 10% Year over Year.

Please vote in this upcoming election!

You do realize that every time we approve another exemption, taxes go up somewhere else to make up the difference? Larger exemptions on homestead simply mean that commercial taxes will go up. Everything you buy will go up in price. It's just hidden, because you don't have to write that big check at the end of the year.

I am over 65 and frozen on all my property taxes, but I will be voting against increasing the HS exemption.

My proposed tax value for 2022 has an increase of 52.37% over last year. This is crazy - The lot value stayed the same but the house value went up astronomically and nothing was done to the house as far as improving/adding on.
Is there a tax protest service any of you use??

Red Pear DFW Luke said:

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Martin Cash said:

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You do realize that every time we approve another exemption, taxes go up somewhere else to make up the difference? Larger exemptions on homestead simply mean that commercial taxes will go up. Everything you buy will go up in price. It's just hidden, because you don't have to write that big check at the end of the year.

I am over 65 and frozen on all my property taxes, but I will be voting against increasing the HS exemption.

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Respectfully, I disagree.

• Your position benefits you in that property taxes for you are frozen so you don't see costs increases from property taxes.
• Meanwhile, my tax increase costs me an additional $400 per month hit to my bottom line. So to your point about increases coming from elsewhere - that directly includes others like myself.
• Commercial Properties are typically assessed at 85% of their purchase price, sometimes higher in areas like Bexar County. While my house is valued over 8% higher than what I purchased it at. General point - commercial properties are, on average, slightly relieved from paying their full property tax burden.
• $40,000 HS exemption increase is just a $15,000 increase over the previous amount and materially reduces the collective Texas Property Owner's taxes by just $175 per year (that's $14.58 per month in reduction).

And for the record - I don't believe we should be requiring commercial properties to pay a greater share of the property tax burden. That would not be good for our state and local economy.

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So even with the 3.5% revenue cap, you are expecting a yearly increase of $4,800? Yes, I know it's not a cap of 3.5% across the board, but your increase should be in the neighborhood of that.

jtraggie99 said:

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Red Pear DFW Luke said:

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Martin Cash said:

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You do realize that every time we approve another exemption, taxes go up somewhere else to make up the difference? Larger exemptions on homestead simply mean that commercial taxes will go up. Everything you buy will go up in price. It's just hidden, because you don't have to write that big check at the end of the year.

I am over 65 and frozen on all my property taxes, but I will be voting against increasing the HS exemption.

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Respectfully, I disagree.

• Your position benefits you in that property taxes for you are frozen so you don't see costs increases from property taxes.
• Meanwhile, my tax increase costs me an additional $400 per month hit to my bottom line. So to your point about increases coming from elsewhere - that directly includes others like myself.
• Commercial Properties are typically assessed at 85% of their purchase price, sometimes higher in areas like Bexar County. While my house is valued over 8% higher than what I purchased it at. General point - commercial properties are, on average, slightly relieved from paying their full property tax burden.
• $40,000 HS exemption increase is just a $15,000 increase over the previous amount and materially reduces the collective Texas Property Owner's taxes by just $175 per year (that's $14.58 per month in reduction).

And for the record - I don't believe we should be requiring commercial properties to pay a greater share of the property tax burden. That would not be good for our state and local economy.

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So even with the 3.5% revenue cap, you are expecting a yearly increase of $4,800? Yes, I know it's not a cap of 3.5% across the board, but your increase should be in the neighborhood of that.

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It's just for this year, as we bought a new build in 2021. So are taxes have yet to be set for the HS Exemption. Regardless - I was pretty conservative when estimating my property taxes and still came short based on the CAD value.

Oh ok, so this is your first year paying property taxes on the house then. Got it.

Red Pear DFW Luke said:

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And for the record - I don't believe we should be requiring commercial properties to pay a greater share of the property tax burden. That would not be good for our state and local economy.

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So how do you think the taxing entities will make up the revenue lost from increasing all those HS exemptions?

Martin Cash said:

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Red Pear DFW Luke said:

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And for the record - I don't believe we should be requiring commercial properties to pay a greater share of the property tax burden. That would not be good for our state and local economy.

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So how do you think the taxing entities will make up the revenue lost from increasing all those HS exemptions?

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At the rate values are increasing, there will be no revenue lost. Just smaller gains

Where can you go to vote?

southernskies said:

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Where can you go to vote?

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Early voting is over. Saturday is election day. Check your county elections office for your voting precinct.

You can find your voting location and hours here:

https://teamrv-mvp.sos.texas.gov/MVP/mvp.do

the only proposition i want to see is that property taxes are assessed only on the value in the year the home was purchased (for homesteads). If they want to increase tax revenue - then the elected officials have to raise taxes.

Why should we freeze peoples property taxes at 65? We need to do away with all of these special tax classes.

So if your rate gets frozen as a 65+ person, then the value of your home drops. Do you get to pay the lower rate of the new value or are you locked in at the previously frozen rate?

rilloaggie said:

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So if your rate gets frozen as a 65+ person, then the value of your home drops. Do you get to pay the lower rate of the new value or are you locked in at the previously frozen rate?

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It's not the rate that's frozen, it's the actual tax amount.

You are correct, poorly worded on my part. Do 65+ folks ever get the opportunity to lower their valuation should the property value fall? Not likely to have occurred in most areas but I'm genuinely curious if it's a possibility. That would seem the epitome of having your cake and eating it too if it's possible.

rilloaggie said:

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You are correct, poorly worded on my part. Do 65+ folks ever get the opportunity to lower their valuation should the property value fall? Not likely to have occurred in most areas but I'm genuinely curious if it's a possibility. That would seem the epitome of having your cake and eating it too if it's possible.

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It is a tax ceiling, i.e. the most you will pay (for the entities it applies to). You are charged the lower of

1) You tax ceiling amount
2) Your actual tax bill. If the actual calculated amount is less than your ceiling, that is what you pay.

I'm with Martin on this (except I'm no where close to over 65 exemption). If the myriad of taxing entities need $1 of revenue, they will get that $1. So increasing exemptions (reducing property taxes) means they have to tax something/everything higher than what would be needed if they didn't increase exemptions.

Example: 2.8% property tax rate, they increase exemption on average by $20000, they aren't just going to do without that $5600 revenue. So this is really a debate on do you believe in a flat or consumption tax versus ad valorem tax. Widely accepted that flat/consumption tax hurts the poor more.. so that's the debate in my opinion.

ETA I consume a lot.. I bet a 0.25% increase in sales tax would cost me more, and it is far less transparent as to what I actually pay in taxes.

"The only proposition i want to see is that property taxes are assessed only on the value in the year the home was purchased (for homesteads)."

Like its been done in California the last few decades?

"At the rate values are increasing, there will be no revenue lost. Just smaller gains"

Value is only part of the formula. On top of that you have to consider the adopted tax rate and then the compression rate.

https://tea.texas.gov/about-tea/news-and-multimedia/correspondence/taa-letters/2022-maximum-compressed-tax-rates

htxag09 said:

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cjsag94 said:

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I'm with Martin on this (except I'm no where close to over 65 exemption). If the myriad of taxing entities need $1 of revenue, they will get that $1. So increasing exemptions (reducing property taxes) means they have to tax something/everything higher than what would be needed if they didn't increase exemptions.

Example: 2.8% property tax rate, they increase exemption on average by $20000, they aren't just going to do without that $5600 revenue. So this is really a debate on do you believe in a flat or consumption tax versus ad valorem tax. Widely accepted that flat/consumption tax hurts the poor more.. so that's the debate in my opinion.

ETA I consume a lot.. I bet a 0.25% increase in sales tax without cost me more, and it is far less transparent as to what I actually pay in taxes.

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This is where I highly disagree. We have an entity that we don't vote for appraising our homes/property, thus determining how much we pay in taxes. It can increase at 10+% a year without anyone voting on tax increases. Meanwhile, politicians can claim that they aren't raising or are even lowering taxes, even though my tax bill is increasing every year.

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This isn't how it works. I'm in my mud board.. we have a budget... We set taxes based on our budgetary needs, by determine the rate after assessed value come in. There are already caps on total tax increase now in place. Raising assessed value (which are accurate based on market conditionds by the way) didn't mean your taxes go up anywhere close to 10%.

But again, that's ad valorem tax vs consumption tax debate

And why would anyone not expect tax bills to go up each year?

Poor wording on my part, didn't mean my tax bill would increase at 10%, meant my value would, which would means taxes would also increase.

htxag09 said:

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Poor wording on my part, didn't mean my tax bill would increase at 10%, meant my value would, which would means taxes would also increase.

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That poor wording is very commonly used as the basis for people's complaints these days, and it is grossly inaccurate, rather than poor choice of words. Also criticizing the appraisal districts, all the while most houses are appraised below actual market value.

cjsag94 said:

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htxag09 said:

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Poor wording on my part, didn't mean my tax bill would increase at 10%, meant my value would, which would means taxes would also increase.

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That poor wording is very commonly used as the basis for people's complaints these days, and it is grossly inaccurate, rather than poor choice of words. Also criticizing the appraisal districts, all the while most houses are appraised below actual market value.

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Depends on the area. For a lot of Houston, HCAD is damn aggressive about keeping up with market value. I'm fighting mine so we'll see where it lands, but it's higher than the value was on Jan 1. Pretty easy to run comps as I'm in a townhome and everyone has similar sq ft and build years.

I simply think that max increase should be lower than 10%, maybe 3%, with standard inflation. I also agree that freezing taxes at 65 isn't really enough, I think they should be decreased pretty significantly.

Tax revenue generally can't increase over 3.5% each year without an election. Doesn't mean an individual tax payer is capped at that, but the taxing entity.

cjsag94 said:

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I'm with Martin on this (except I'm no where close to over 65 exemption). If the myriad of taxing entities need $1 of revenue, they will get that $1. So increasing exemptions (reducing property taxes) means they have to tax something/everything higher than what would be needed if they didn't increase exemptions.

Example: 2.8% property tax rate, they increase exemption on average by $20000, they aren't just going to do without that $5600 revenue. So this is really a debate on do you believe in a flat or consumption tax versus ad valorem tax. Widely accepted that flat/consumption tax hurts the poor more.. so that's the debate in my opinion.

ETA I consume a lot.. I bet a 0.25% increase in sales tax without cost me more, and it is far less transparent as to what I actually pay in taxes.

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I think you moved a decimal point

Correct.. my bad. Which further solidifies my point that a small increase in sales tax cost me a lot more than the exemption on property tax will save me. I tend to like property taxes because they're transparent and relatively fixed. Funny how so many people argue that they want a flat tax but then hate property taxes.