With so many people moving to Texas, some of them get sticker shocked when they see what the property taxes in Texas are. Click below to watch a video that will give you an introduction to the Austin property tax rate so that you can better understand what to expect.
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How does property taxes in Texas compare to other states?
When you compare property taxes state by state you'll notice that the tax rate in Texas is on average higher than a lot of the other states in the US. The reason why is because Texas does not have a state income tax & tends to tax the people living here less than other states.
Texas still needs to pay for public services an institutions. To bring in the needed tax revenue, Texas & cities set tax rates that are specific to where your home is located.
Below is a chart provided by TaxFoundation.org to help you get a better idea of how property taxes in Texas compare to other states.
There is no standard tax rate in Texas
There are certain base tax rates applied to everyone BUT depending on where you live there are additional property taxes applied. Because of this taxes rates can range throughout a wide scale even on a city basis.
The best way to determine a homes tax rate in Texas is to look at the tax records which are public record. What you'll see is a tax rate, given as a percentage. Then you'll get a break down of how that tax rate was calculated.
For example, the Austin property tax rate will vary depending on the subdivision the home is located in. Generally speaking, all homes within the a subdivision will have the same tax rate. Also, the subdivision across the street may have a different tax rate. It all depends on what utilities your subdivision is using.
Typically, newer subdivisions will have a higher tax rate than established ones. This might sound confusing so if you have questions or would like to get the tax rate for a specific area fell free to call or text me @ 512-809-0091.
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How do you know what you'll pay in property taxes as a dollar amount?
Once your Texas property tax rate is established as a percentage, you'll then multiply that by your homes assessed value. That will be the dollar amount you will pay in property taxes for the year before. How is your homes value determined? By your local taxing authority.
How is your homes value determined? By your local taxing authority.
Every year the county will reassess the value of your home. Sometimes they'll physically visit your home or at least drive by it. Most of the time they use a formula or an algorithm to determine a value. This is just from my understanding on how things work. I'm a Realtor, not a licensed appraiser or employee of any taxing authority.
You'll have the option to contest your homes assessed value if you think the county got it wrong. The higher the assessed value, the more you'll pay in property taxes & in central Texas home prices are quickly rising.
It's important to note that the market value of your home is usually NOT the same as the counties assessment unless you buy a new home. The county will use the sales price of the new home when you close as the starting value. For older homes, I typically see the counties assessment to be less than market value.
To more info directly from the State of Texas, you can visit the website of the Texas State Comptroller.
Get a discount on your Texas property taxes
Texas does something really cool, it allows you to get a discount on your property taxes if the home you're living in is your primary residence. It's called the Homestead Exemption & it will get you a $25,000 reduction on your homes assessed value.
If you're disabled, over 65 or a veteran you can save even more & if you're a 100% disabled veteran then you pay nothing in property taxes. Unfortunately there is not discount or exemptions for rental properties. Visit Comptroller.Texas.Gov to get more info on all of the tax exemptions.
My final thoughts about Texas property taxes
If you know what to expect you can better manage the property taxes in Texas. Have a Realtor like myself that can help make you aware of all aspects, including this one, will allow you to make an informed decision that feels right to you.
The common opinion from clients that I've helped moved here is that even though the property taxes seemed high at first, the overall taxes they paid here when compared to the state they lived in before was less.
What are your thoughts? Please share this post to your favorite social media outlet then comment below with any thoughts & questions.