How to Avoid Overpaying on Your Texas Property Taxes

Let’s face it, property taxes in Texas can feel like a mystery. One year, they seem manageable; the next, you’re hit with an increase that throws off your entire household budget. It’s frustrating, and often, you might feel like you’re overpaying, but where do you even start to figure that out?

Don’t worry—we’re here to help. With property taxes rising in Texas, it’s more important than ever to make sure you're paying only your fair share. In this guide, we’ll cover why property taxes are increasing, how to tell if you’re overpaying, and strategies to reduce your tax bill.

Why Are Property Taxes Increasing in Texas?

You’ve probably noticed your tax bill creeping up year after year, but why is this happening? The answer lies in two major factors:

1. Property Value Growth: Texas is booming. With an influx of people moving to cities like Austin, Dallas, and Houston, demand for housing has skyrocketed, leading to higher property values. As your home's value increases, so does the amount of tax you owe.
2. Local Tax Rates: Property taxes in Texas fund local services like schools, roads, and emergency services. As communities grow, the need for more infrastructure and resources leads local governments to increase tax rates to fund these initiatives.

The combination of rising property values and higher tax rates can make your tax bill soar, even if your home hasn't changed physically.

How Do I Know If I'm Overpaying for Property Taxes?

The idea that you could be overpaying might make your stomach drop, but the good news is, that there are ways to tell if you're being charged too much. Here’s how to figure it out:

1. Check Your Home’s Assessed Value: Your property tax bill is based on your home's assessed value, which is determined by your local appraisal district. Compare the assessed value to what similar homes in your area are valued at. If your home's assessed value is higher than nearby homes of the same size and condition, you might be overpaying.
2. Look for Errors in Your Assessment: Mistakes happen. Your home could be incorrectly assessed due to errors like the square footage being overestimated or improvements being added that were never made. Review your property details carefully.
3. Review Comparable Sales: If similar homes in your neighborhood are selling for less than your home's assessed value, you may have a case for overpayment. Collect sales data on homes in your area and use it as evidence if you decide to appeal.

How is Property Tax Calculated in Texas?

Let’s break down how property taxes are calculated in Texas so you can understand exactly where your money is going.

• Assessed Value: This is the market value of your home as determined by the local appraisal district. It’s supposed to reflect what your home would sell for in the current market.
• Tax Rate: Each local taxing entity (school districts, cities, counties) sets its own tax rate. The combined tax rate is applied to your home’s assessed value to determine how much you owe.

For example, if your home is assessed at $300,000 and your local tax rate is 2%, you’ll owe $6,000 in property taxes annually.

Who Decides on the Tax Rate?

Local governments in Texas are responsible for setting property tax rates. These include:

• School Districts: A large portion of your property taxes goes toward funding public schools.
• Cities and Counties: Municipalities use property taxes to fund public services like law enforcement, parks, and road maintenance.

These local entities vote on tax rates each year based on their budgets and needs. If you feel that your local tax rate is too high, it's worth attending public meetings or advocating for more taxpayer-friendly policies.

3 Easy Tax Deduction Strategies

So, how can you avoid overpaying? Here are three straightforward strategies to help you lower your property taxes in Texas:

1. File for a Homestead Exemption: A Homestead Exemption can reduce the taxable value of your primary residence by up to $25,000 for school district taxes, and some counties offer additional exemptions. Filing is easy, and it can save you hundreds, if not thousands, each year.
2. Check for Additional Exemptions: Texas offers exemptions for seniors, veterans, and disabled individuals. These additional exemptions can significantly lower your tax bill. For example, those 65 or older can receive an additional $10,000 off their assessed home value.
3. Appeal Your Property Value: If you believe your home has been overvalued, file an appeal with your local appraisal district. Gather evidence like comparable home sales or errors in your home’s assessed details to make a strong case. The deadline to appeal is usually May 15 in Texas, but check with your local district for specific dates.

Consider Working With Abode

Navigating Texas property taxes can be confusing, and overpaying your taxes is all too common. If you want help reviewing your property tax bill, appealing your assessment, or applying for exemptions, Abode is here for you. Our experts know Texas property taxes inside and out and can guide you through the process to ensure you’re not paying a cent more than necessary.

Take control of your property taxes today.Contact Abode and see how much you could save!