Texas property owners need to timely pay property taxes, confirm exemptions have been filed and file any correction protests prior to January 31, 2007. Although many property owners think of May 31 (property tax protest deadline) as the most significant property tax deadline, January 31 is more significant due to the penalties and interest incurred for taxes not timely paid.
Property owners are responsible for timely paying property taxes by January 31, even if they do not receive a property tax bill. Owners of multiple properties typically compile a list of tax bills which they expect to receive, have been received and have been paid to ensure they do not incur penalties and interest due to a clerical error. The penalties and interest for not paying property taxes timely are substantial. The total payment due on February 1, including penalties and interest, goes up by six percent versus the amount due on January 31 for the first month, then one percent each month the taxes are delinquent prior to July 1.
Texas homeowners have a substantial grace period for filing homestead exemptions and over 65 exemptions. Although about 90 percent of Texas homeowners entitled to a homestead exemption have filed the proper paperwork, there are a substantial number who have not. Texas homeowners have until one year after the tax delinquency date to file a homestead exemption request. This means homeowners who do not yet claim a homestead exemption or over 65 exemption for 2005 can receive a tax refund by completing a simple form and submitting it to the appraisal district by January 31.
Texas appraisal districts often do a good job in estimating the market value of real estate and personal property. However, there are numerous cases where gross errors occur because the appraisal district information is incomplete or incorrect. For property which has been substantially over-assessed, owners can appeal through January 31 by completing a 2525d protest form. To qualify for a 2525d property tax appeal, the property must be at least one third over-assessed. In addition, a property is not subject to a 2525d appeal if the property owner or his agent attended an ARB hearing or agreed to an assessed value. January 31st is the deadline for a 2525d appeal for the prior year.
Texas taxpayers are provided generous appeal rights and time to file homestead exemption requests. The law is harsh and rigid regarding timely payment of property taxes. Property owners can minimize the burden of property taxes by paying taxes by January 31st, confirming they have a homestead exemption and filing a 2525d appeal if it is appropriate.
About O’Connor & Associates
O’Connor & Associates is a Texas-based real estate firm providing appraisals, market research, cost segregation studies and federal and ad valorem tax reduction services. In business since 1974, the firm has more than 130 employees and more than 40,000 clients. Patrick O’Connor, MAI, president of O’Connor & Associates since 1983, is frequently acknowledged by national publications as a respected source of information on real estate trends. Visit www.poconnor.com.