No Central Property Tax Rate

Texas has no income tax, and the sales tax rate is the same no matter where you go in the state. Property taxes are an entirely different animal. While the sales levy is regulated at the state level, property taxes are not centrally regulated. Instead, there are dozens of tax rates across any given county. This is because rates are generated by taxing bodies, which are government institutions that require funding from property taxes to function. If you look at the breakdown of your tax bill or the multiple bills you receive in some jurisdictions, you will see many districts with separate rates, each contributing to part of the whole.

Taxing Entities

School districts, municipal utility districts (MUDs), hospital districts, counties, special districts, and cities are only a few of the taxing entities that levy rates on property owners. In many jurisdictions, you will get three property tax bills, one for the county, one for the MUD, and one for the school district. Inside these bills, you will see several other bodies with varying rates as well. For instance, a bill from Harris County will list the likes of the Lone Star College System, Port Authority, emergency services, the hospital district, and other groups. Each has its own rate and impact on your bill.

Tax Rates Change

With so many different sources, it is easy to see how taxes can swing from one year to the next. Each of these entities has an annual budget. To meet these funding requirements, a rate must be set. As needs naturally change yearly, a body must adjust its rate to compensate. This makes both tax rates and the burden associated with them unpredictable. This is why every taxpayer needs to stay up to date on both their assessments and their property records, as both can see substantial changes.

Property Values and Taxes

The two main components of a bill are property values and rates. We recently did an article addressing the three types of property values, as there tend to be a lot of misunderstandings associated with them. To recap quickly, market value is what your appraisal district estimates your property will sell for on the open market. Appraised value is the market number that has been controlled by market caps and other regulations. The taxable value is the appraised sum minus exemptions and other reductions.

Once the taxable value has been determined, it is then multiplied by the various rates to generate a bill. Since property values are linked to market forces and rates to annual budgets, this can cause a great amount of fluctuation in property taxes from year to year. In years where the majority of taxing bodies raise rates and the taxable value soars, levies can increase substantially. This is why it is important for a taxpayer to stay informed about their property’s value, as it can have a huge impact on future costs. This makes the values on the appraisal notices mailed in March vital to understand.

Can Exemptions and Appeals Lower Tax Rates?

While important, neither property tax appeals nor exemptions lower tax rates. Since they come from so many sources, rates cannot be lowered or challenged. However, tax reduction can be achieved by lowering the taxable value. Exemptions are the first step, as they can shield a good amount of value from taxes. If you are over 65 and your home is considered a homestead, for instance, then you might be able to combine exemptions to eliminate school district taxes entirely. Property tax appeals challenge the appraisal district’s values, and if they succeed in lowering them, then the appeals are usually able to lower the overall bill.

O’Connor Helps Texans with Tax Reduction

While tax rates cannot be changed by the taxpayer, taxable value certainly can be. We at O’Connor have been fighting for Texas for over 50 years, with the goal of landing clients fair tax reduction. We utilize exemptions, appeals, and even lawsuits to lower our clients’ taxable values. When you join us, we will analyze your appraisal for mistakes, gather evidence, file appeals and exemptions, and represent you in appeal hearings. We will push for the highest appeal possible, usually taking your case to the second level, which is formal appeals with the appraisal review board (ARB).

Unlike local firms, we can use our national resources to gain an advantage against your appraisal district, leveraging expertise and data that smaller firms cannot match. When compared to national firms, we have tons of local expertise and branch offices in Texas. We also offer a personal touch with our client success consultants. These dedicated customer specialists will be assigned to you from the first day and will be your contact throughout the whole process, meaning you will always have a point of contact to communicate with and ask questions. In many cases, we can also send out personalized concierge visits to your home or business. There are no upfront costs to join either, and you will only pay a contingency fee from your savings if we can lower your taxes.

Frequently Asked Questions About Tax Rates in Texas