Buying a home is an exciting step, but you need to be aware of all the costs involved, including property taxes. If you’re a new homeowner in Texas, here’s a simple guide to help you understand property taxes and plan your budget effectively.
What Are Property Taxes?
Property taxes are payments made by property owners to local governments like counties, cities, and school districts. These taxes help pay for public services such as schools, roads, and emergency services. In Texas, property taxes are a major source of funding for local governments.
How Are Property Taxes Calculated?
- Appraisal of Property Value
- Each year, county appraisal districts (CADs) estimate the market value of properties. The market value is what your property would likely sell for under normal conditions.
- Exemptions
- Texas offers several exemptions that can lower your property tax bill:
- Homestead Exemption: Lowers the taxable value of your main home.
- Over-65 Exemption: Additional reduction for homeowners aged 65 and older.
- Disabled Person Exemption: Reduction for homeowners with disabilities.
- Veteran Exemption: Reduction for veterans with service-related disabilities.
- You must apply for these exemptions with your local appraisal district.
- Texas offers several exemptions that can lower your property tax bill:
- Tax Rates
- After determining the taxable value (appraised value minus exemptions), local taxing units set their tax rates, expressed in dollars per $100 of taxable value. Each unit, like the county, school district, and city, sets its own rate.
- Calculating the Tax Bill
- To figure out your property tax bill, multiply the taxable value of your property by the combined tax rate of all local taxing units. For example, if your property’s taxable value is $200,000 and the combined tax rate is $2.50 per $100 of value, your annual property tax would be:
- $200,000×(2.50/100)=$5,000
- To figure out your property tax bill, multiply the taxable value of your property by the combined tax rate of all local taxing units. For example, if your property’s taxable value is $200,000 and the combined tax rate is $2.50 per $100 of value, your annual property tax would be:
When Are Property Taxes Due?
Property tax bills are usually sent out in October and are due by January 31 of the following year. Paying after January 31 may result in penalties and interest.
Paying Your Property Taxes
You have several payment options:
- Direct Payment: Pay the full amount directly to the county tax office.
- Mortgage Escrow: If you have a mortgage, your lender may collect part of your property taxes each month and pay them on your behalf through an escrow account.
- Installment Plans: Some counties offer installment plans for those who can’t pay the full amount at once.
What If Your Property Value Changes?
If you think the appraised value of your property is too high, you can protest it. You can file a protest with your local appraisal district each year and provide evidence to support your claim. If the appraisal district agrees, they may lower your property’s value, reducing your tax bill.
Conclusion
Understanding property taxes in Texas is important for new homeowners. Knowing how they are calculated, what exemptions are available, and when they are due can help you manage your finances and avoid surprises. If you have any questions, your local appraisal district and tax office are great resources.
For more information on buying a home in Texas and understanding property taxes, visit TangeWilliams.com. Let me help you navigate the home-buying process with confidence!