Background – All property in Texas is subject to taxation on January 1, unless exempt. The median time-adjusted home price in Travis County for January 2023 is $500,000. However, based on a study by O’Connor reviewing over 17,000 Travis County sales in 2022 and 2023, the appraisal district has valued houses at a median of $563,156.
It is true that Travis County home prices were over $500,000 at the start of 2022 and hit a peak median sales price of $643,500 in May 2022.
However, only the sale price / values for January 1, 2023, are relevant.
Of course, the appraisal districts do not set property taxes. However, their assessed values are a key component in calculating property taxes.
The median assessment of $563,156 is 11.8% higher than the median sales prices in January and February 2023 ($500,000).
The excess assessment can and should be appealed, unless you enjoy agreeing to pay extra property taxes.
Hence there is a 12.7% gap between market trends and tax assessments. Market trends are down ~5% during the 12 months ending January 2023. However, the tax assessor has increased tax assessments by over 7% during the same period.
Homeowners of property valued at less than $250K saw by far the greatest percent increase among value ranges of single-family homes, with an increase of over 25%. The value range with the next highest percent increase was properties over $1.5 million where the increase was 14.9%.
When analyzed by living area, the larger the home, the higher the assessment increase was for Travis County single-family homeowners. Homes with more than 8,000 square feet saw increases of over 16%.
Newer homes built after 2001 have the highest jump in assessment at 11.2%, but homeowners of older properties were the next hardest hit with an increase of more than 6%.
In summary, 71%, or well over two thirds of all houses in Travis County are overvalued.
Inflated assessments in Travis County are not limited to single-family homes. Commercial property assessments have also seen staggering increases. According to the Green Street Commercial Property Price Index, published April 6, 2023, commercial property values have declined by 15%, but Travis County property values are up over 23%. This is a disparity of more than 38%.
Escalating commercial property values are not limited to any specific property type, but are evident across the board, however warehouses, hotels, and land are most impacted with assessments ranging from around 29 to just over 33%.
When reviewing assessments according to year built, properties built prior to 1960 have the most significant increase at 32.8%, however, more recent builds are also among the largest increase in assessment at over 25%.
Office properties present a slight defiance to the over all trend of increase by year built with properties constructed in 2001 and more recently showing the greatest increase at 20.8%. The next highest increase among office properties is 20.3% with property built between 1961 and 1980.
All Travis County commercial property is assessed significantly higher for 2023, with all value ranges showing more than 22% increase, however property in the value range of $500K to $1M is the most impacted at an amazing increase of 33%.
Travis County apartments built before 1960 are outrageously assessed at value increases over 49%.
Similar to apartments, retail properties also show the greatest increase in assessed value for property built prior to 1960.
When comparing the various types of commercial property with a focus on the year built, warehouses constructed pre-1960 have astronomically higher assessed value increases at 87.5%. This is more than double the percent increase for the next highest year-built range of 2001 to present.
Travis County offices range from a 15.4% increase in assessed value for high rise properties to a 24.8% jump in assessed value for low rise properties.
Apartment increases in assessed value seem to be opposite the pattern set by office properties. High rise apartment property values are the most inflated with an increase of over 25%, while small apartments and mid-rise apartments have increased by 19.1% and 18.4% respectively.
Single tenant retail properties have shown the most substantial surge in assessed value with a 27.6% increase.
Commercial warehouse properties have increased from just over 11% to as high as more than 40%, depending on sub-type.
Both commercial or residential property owners in Travis county can expect to see significant increases in their property taxes unless they exercise their right to appeal and record levels of property tax protest are expected to follow. The deadline to file a property tax protest is May 15th.
O’Connor is among the largest property tax consulting firms in the United States, providing residential property tax reduction services in Texas, Illinois, and Georgia, as well as commercial property tax reduction services across the United States. O’Connor’s team of professionals possess the resources and market expertise in the areas of property tax, cost segregation, commercial and residential real estate appraisals. The firm was founded in 1974 and employs more than 600 professionals worldwide. O’Connor’s core focus is enriching the lives of property owners through cost effective tax reduction.
Property owners interested in assistance appealing their assessment can enroll in O’Connor’s Property Tax Protection Program ™ . There is no upfront fee, or any fee unless we reduce your property taxes, and easy online enrollment only takes 2 to 3 minutes.
Visit O’Connor at www.poconnor.com or call 713-290-9700.