Will Special Session Help Property Tax Reform
Governor Abbott has set the date for a Special Session of the Texas Legislature to begin July 18th. Many topics on the agenda, but none more anticipated than the possible property tax cap of 5% on the effective rate. The governing body can currently raise their rate of 8% without residents being able to petition for a rollback election. The “effective rate” refers to the rate determined for the governing body to raise the same total amount of tax dollars from the same local properties as was generated the previous year. However, many agree this will not do much to reduce the home owners tax bill as it is a rate based cap and does nothing to deal with the climbing tax districts soaring home values. This Special session could last up to 30 days and cost Texans an estimated 1 to 1.5 million dollars depending on the length of time required to deal with these issues. Another item in the special session deals with property annex by cities and applying city taxes to annexed properties.
Now to the true “FIRE” that needs to be addressed by local and state governments. Texas is one of only a few states not requiring the sales price of property to be disclosed. This allows taxing districts to use many different methods to determine property values. Travis and Williamson County have seen mass reaction to the April Tax Appraisals, with home values up about 9% according to both Tax Appraisers offices. However, some have seen the values rise as much as 23% mainly east of IH-35. The reason given by the taxing officers is the booming housing market with low inventory and high demand according to the Williamson County Chief appraiser, Alvin Lankford. One reason is the way the districts collect sales information vs use of appraiser values. With low inventory and many multiple offer sales the paid amount is many times at the very top of appraiser’s values or can even be closed with the buyer bringing cash to the table to cover the gap in values.
Homeowners need to understand the changes in factors used to determine appraisal values. With home sales and median pricing up at all-time highs, values have steadily increased. Tax Districts then look at recorded deeds of similar homes and adjust values to reflect the new “Market Value”. The homeowner must vigilantly watch appraised values and protest when they feel the value of the home would not support the current estimate. The Homeowner is truly the one that knows the property and any issues that would prevent such a price in the market. A realtor like myself, would love to assist in finding comps that truly reflect the homes values. In 2016 Travis county alone 88,000 protest were filed with Williamson recording similar numbers. While the numbers are not out for this year we can clearly see a large increase.
While many are complaining about the new hikes, the state, county and city can do little to control the influx of the new Texans coming to town every day. With the State, School Boards, County and City budgets reaching for every dollar, homeowners must be extra vigilant in watching how they plan on spending these dollars. One way to ensure your voice is heard on the value debate is to VOTE, VOTE, VOTE!!