If you’re a homeowner in Texas or plan to have your own nest in the Lone Star State, property tax is a huge concern. You have likely heard about the hefty tax bills that land in Texas mailboxes each year. Property tax collection in Texas has increased over 20% since 2017, with Texans paying an estimated $73.2 billion in property taxes in 2021.
Fortunately, there are ways to reduce your tax amount. You have the right to protest your property tax assessment if you feel that your property has been evaluated unfairly. You can challenge the amount you owe, lower your tax burden, and maximize your savings by filing for a property tax protest in 2024.
In this article, we’ll explore various tips and strategies to make the most of your property tax savings.
What is property tax?
In simple words, property tax is the tax levied on the value of property you own. In Texas, property tax consists of a tax on your real estate holdings, such as your home, land, commercial properties, and any other real property you possess.
The appraisal district in your county is in charge of levying property taxes and issuing a notice if the appraised property value has increased from the previous year. If you feel that the property tax assessment of your home is incorrect, you have the right to protest the property tax bill.
The notice of appraised value also contains all the information you need, from how to file a protest to scheduling an informal conference with the appraisal district before your formal Appraisal Review Board (ARB) hearing.
Things to Consider while Filing an Appeal
Review Your Assessment
Check whether your tax amount is higher than the previous year and if it can be appealed for a reduction. Your property assessment must reflect the fair market value of your property. You can compare property tax history using the property bills of your neighbors and check for real estate rates in your area to determine the right value.
Collect Evidence
The appeal process allows you to present evidence to support a lower assessment. Here’s a list of items to consider that can strengthen your case
The appeal process allows you to present evidence to support a lower assessment. Here’s a list of items to consider that can strengthen your case:
- Recent Home Sales: Research the sale of property in your neighborhood for at least the previous two years. While comparing, look out for homes that are similar to yours in size, features, and location. These comparables can help establish a fair market value for your property.
- Comparable Properties: Identify other properties in your area that are similar to yours in features, but have been assessed at a lower value. This data builds proof that your property is being treated unfairly.
- Physical Factors: In case your property has had structural damages or is due for repair, owing to environmental issues like earthquakes or cyclones, document this damage. This evidence can support your claim for a lower assessment due to potential expenses involved in maintenance.
- Appraisal Reports: You can also get a professional appraisal done for your property tax assessment. If the appraised value is significantly lower than the assessed value, include the appraisal report as evidence.
Gather all relevant documentation and follow the specific procedures outlined by your local appraisal district to present your appeal.
Check for Exemptions and Deductions
Texas offers property tax exemptions to help lower your property tax bill. One common exemption is the homestead exemption. This exemption is available to homeowners who use their property as their primary residence.
To qualify, you must meet certain criteria, such as owning the property as of January 1st, living on the property, and not claiming a similar exemption on another property.
You can also refer to this handy guide that outlines all the details on homestead exemption.
Additionally, there are other exemptions available to homeowners:
- Disabled Veteran Exemption: You can qualify for property tax exemptions if you are a disabled veteran or the surviving spouse of a disabled veteran.
- Senior Citizen Exemption: Texas offers property tax relief to senior citizens aged 65 or above.Check if you’re eligible for these exemptions and submit your application to improve your tax savings.
Manage Property Improvements
Renovating or expanding your property can increase your property value and lead to higher property taxes. So, before undertaking any significant renovations or additions, consider the potential impact of this physical change on your property taxes.
For example, in Travis County, a median home's value has increased by more than 50% since the previous year and has now reached $632,208.
Maintain the bills and receipts of any upgrades you have undertaken, as it may help later with appeals or exemption requests.
Budget for Property Tax
Property taxes are an ongoing expense, so you should reserve a portion of your monthly budget for the eventual bill. This helps you prepare for tax season and avoid any late payment fees.
Explore Payment Plans
f you’re not able to pay your property tax bills all at once, you can look for different payment plans offered by your local taxing authority. Many counties in Texas allow you to pay your tax in installments. These installment plans are spread out over several months and can ease the financial burden on your property tax payments.
A few things to consider while opting for an installment plan:
- Duration of the Plan
- Installment Amounts
- Fees and Interest
- Eligibility Criteria
- Deadlines
- Automatic Withdrawals
- Early Payoff
Stay Informed About Local Policies
In Texas, different counties and jurisdictions have varying property tax laws, so keep an eye out for any revisions to local tax laws that may affect your property taxes.
To stay up to date with the latest tax information, you can:
- Attend sessions or workshops
- Follow updates from your local taxing authority
- Consult professionals like Bezit who specialize in property tax exemptions.
Monitor Changes in Property Values
Property values fluctuate over time, which affects property taxes. Keep an eye out for real estate market trends in your area and track changes in property values. If property values in your neighborhood are declining, it may be worth exploring a potential reduction in your own property assessment.
Pay Taxes on Time
Pay your property taxes on time to avoid any penalties or interest charges. To avoid delay, mark your calendar and set reminders for the due dates of your property tax payments. In the case of late payments, you may have to pay additional fees, as set by your local taxing authorities.
Consult with Professionals
It’s good to be DIY and do everything on your own, but you don’t always have to bear the load alone. You can get professional help for property tax appeals. You should seek out experts like a tax consultant, real estate attorney, certified public accountant, or a service like the one Bezit provides:
- Insights on your appeal for tax reduction
- Help with the protest filling process
- Handle hearings concerning your property tax
- Guide you to maximize your property tax savings
Stay Organized
For efficient tax management, you must keep detailed records of your property tax documents, assessments, appeals, and payment receipts. You can create a filing system to organize all relevant paperwork and maintain a record of your property tax history. These records will be invaluable if you need to reference them during an appeal or when seeking exemptions or deductions.
As a homeowner in Texas:
- A proactive and strategic approach can help you maximize your property tax savings.
- You can potentially lower your property tax burden by reviewing your assessment, filing appeals, exploring exemptions and deductions, managing property improvements, budgeting effectively, and staying informed about local policies.
You can do this yourself or simplify the process with professional help from Bezit, with services starting as low as $19.