Relief for Rising Property Taxes in Texas?
“Nothing can be said to be certain, except death and taxes” as the famous quote goes. Owning property means you’ll have to pay taxes, but many Texans have been seeking relief and reform to our ever-increasing property taxes. Last year, the Texas Senate Select Committee on Property Tax Reform and Relief took over 50 hours of public testimony and filed Senate Bill 2 (SB2) with the intended goals of “simplification, clarification, and transparency of the property tax and appraisal system”.
The Tax Increases
In a report prepared by the committee, Senator Paul Bettencourt, chairman of the Senate Select Committee on Property Tax Reform and Relief, states that “Texas taxpayers have been facing property tax bills that are increasing 2.5 to 3 times faster than median household income”. The report goes on to reveal that home property tax appraisals have risen:
- 22-24% over two years in Dallas-Fort Worth area
- 20% in San Antonio (over 2 years)
- 12% a year in Austin for three straight years
- 36% in 3 years for average home tax bills in Harris County (Houston and surrounding cities)
Your Right to Fight
In Texas, your county Appraisal District determines the property value to base your taxes on. Many mistakenly think this is the market value (what they’re home is “worth”) of their home. While the property tax value should be based on a fair market value, there are several factors why this is often not the case. Additionally, you may be entitled to exemptions that place limits on the amount of taxes you have to pay and how much they can be increased yearly. We’ll cover this in another post but the thing to remember is that one of your most important rights as a taxpayer is your right to protest if you disagree with the property value. Protesting the value, or “fighting your property taxes”, is handled by the Appraisal Review Board (ARB) for your county. ARBs are independent and impartial groups of citizens authorized to resolve disputes.
See our Should You Fight Your Property Taxes post for details on how to lower your property taxes.
How Does This Bill Help?
Even with ARBs in place to help, many testified that their taxes still went up after protesting. So how is this supposed to help? Highlights of SB2, titled The Property Tax Reform & Relief Act of 2017, include the following:
- Lowering the rollback tax rate from the current 8% to 4% (this is intended to prevent an automatic 8% increase and force a desired increase above 4% to be put to a vote).
- Requiring automatic tax ratification elections if the taxing unit adopts a tax rate that exceeds the rollback rate, thus removing the onerous petition requirement in current statute
- Standardizing tax ratification elections across the state by requiring them to be held on general election dates
- Creating a Property Tax Administration Advisory Board in the Comptroller’s office to oversee the entire property tax process
- Statutorily setting the deadlines for all property tax protests to be filed in Texas to May 15, thereby eliminating confusion by owners of multiple classification of property owners
- Requiring all appraisal districts to use the appraisal manuals issued by the Texas Comptroller, which will result in more transparent, accountable and consistent appraisals statewide
- Establishing specialized ARB panels in counties with a population of 120,000 or more that can hear more complex taxpayer protests
- Clarifying that a majority vote by ARB is binding for decisions, thus eliminating the requirement of some ARB panels for a unanimous vote
- Mandating that all members of each Appraisal District Board of Directors must be elected officials within their respective counties, thus directly answerable to the citizens
Is It the Right Answer?
According to an Austin Chronicle article, critics of the bill warn that it “could cripple the state’s ability to pay for essential services like roads and public safety, while providing little to no meaningful tax relief to residents”.
Sources and More Info
More details of the report and bill can be found here: http://www.bettencourt.senate.state.tx.us/pr16/p112916a.pdf
The current state of the bill can be tracked here: http://www.capitol.state.tx.us/BillLookup/BillStages.aspx?LegSess=85R&Bill=SB2