Time to talk about the hidden property tax
By Daniel Gonzalez
“The tax rate is going down.”
How many times have you heard this wonderful news — only to get your bill and find that your taxes have actually skyrocketed?
A perfect example is a recent headline in the Fort Worth Star-Telegram that read, “Fort Worth council considering lowering property tax rate by two cents.” But even with that two-cent reduction, the city still anticipates generating an additional $24 million, primarily because of increased appraisal values. The headline should have been, “Fort Worth council to increase property taxes $24 million.”
It’s a kick in the teeth to taxpayers, and at the Texas Association of REALTORS®, we call it the hidden property tax.
Texans enjoy a robust economy, and the values of our homes and businesses have increased dramatically. Those are good things. But property owners also pay some of the highest property taxes in the country — and many Texans are being taxed out of their homes.
Property taxes in Texas are calculated by multiplying your appraised value (minus any exemptions such as the homestead exemption) by your total property tax rate. This means that as appraised values go up across the state, your property tax bill can also go up, even if your tax rate goes down or stays the same. Any tax rate adopted by a taxing entity above the effective tax rate — that is, the rate that will ensure the entity brings in the same amount of money as it did last year — will add to your bill.
An increase in property value should not be an automatic increase in property tax revenue. A more honest and transparent conversation needs to occur so taxpayers completely understand why more tax revenue is needed. But the current system is confusing, and it ends up with more Texans seeing a hidden property tax increase.
The process is starting right now: Every year in August, cities, counties, school districts and other taxing entities determine their budgets for the following year. One step in this process is to set the tax rate, and once the tax rate is adopted, there’s no going back.
So what can you do? You’re paying more in property taxes, and local officials should be accountable. That’s where the Texas Legislature, the media and you should step in.
State lawmakers should rein in local taxing entities that hide behind annual appraisal increases to raise more tax revenue. The media should become more informed about property taxes rather than writing misleading headlines about lower tax rates.
And—most importantly—you, the taxpayer, should get involved. Educate yourself. Go to the budget hearings where tax rates are set. Voice your concern. Demand your local elected officials adopt the effective tax rate. Exercise your right to vote in local elections.
Join our effort to ensure we have a more honest and transparent property tax system in Texas. Help us change state law to empower you, the property taxpayer, so you aren’t taxed out of your home. Visit HiddenPropertyTax.com for more information, and sign up to be kept up-to-date on our efforts to change the local property tax system.
This op-ed originally appeared on TribTalk.org.
Natalie Grimley Associate Realtor at Weichert Realtors –
The agenda and ultimate goal is for no one to own anything, except the govt. The System wants 100% habitual renters at the mercy of the NWO Beast System. People without a roof over their head and who are hungry a lot easier to control. Why else would Obama allow section 8 welfare checks ( somebody elses real money ) to be used for payment of homes and their property taxes? If you vote for me, I will give you free money to buy a home and I will even force someone pay your property taxes too!! Not only our your own property taxes going to do nothing but increase but you are NOW paying all the current and future property taxes for all the govt. “renter/owners” too. If you live in Fort Bend County, your front door is just a Big ATM machine, and you have a better chance of being hit by a lighting strike than winning a protest on your property taxes. Harris County is not much better. Reminds me of the old television commercial ads for the marines or navy etc where at the end they would have a disclaimer, ” paid for by the US Military.” What? Excuse me? You mean to say, “Paid for by the US tax payer”…. County governments are no different in their thinking. It is their money, not yours. Their value raising works nicely as it results in higher taxes owed so who needs to budget at all? Budget, we just go to the door and take money out of the ATM machine whenever we need or want it, we don’t budget. Silly, & just what is Mr. & Mrs. homeowner going to do about it? Move to Detroit? Lucky for us, they have no real recourse.
Aug 27, 2016 10:48am
Bonnie L. Wilson It’s not the tax RATES that are rising, it’s the VALUES that are rising….I’m annoyed that the politicans keep saying they are not raising the tax rates, but they fail to mention they are most definately raising the values!
Aug 26, 2016 3:34pm
Rick AndCindy Hall And not to mention the uneven appraisals that I yearly protest…. And if you mention at the protest meeting that the comps they are using to raise the value due to an MLS sale, the actual value amount on the same address in HCAD is actually lower….. They shut that conversation down QUICKLY.
There have been attempts for “class action style” suit and I am /have and many neighbors are happy to hop on board, also seems to get shut down somehow………….
CH, COI property owner, REALTOR.
Aug 26, 2016 2:12pm
Phillip Shorter REALTOR® at Red Door Properties –
A good article that I agree with but that isn’t the whole story! I was told a few years ago by a REALTOR® friend of mine that he has a friend who works for one of the tax appraisal districts that said every year they receive budget info from the taxing entities (city, county, schools, hospitals, etc). Then they decide on percentage of increase and come up with their appraisal values. In other words, they are covering these tax entities budget increases and their budgets never go down. I don’t know if this is completely true, but I tend to believe it. My own home value keeps going up ($30.000 last year on a home under $300,000), and I have a homestead and senior exemptions, but my taxes keep increasing. I fight most years the increase, but the bottom line is my home value continues to rise even if I get them to reduce their assessment. I have had clients decide not to retire in Texas because of the home tax issue, and I might retire in another state just because of this issue.
Aug 26, 2016 12:54pm
Mark Hampton Realtor at Century 21 Randall Morris & Associates –
Good article and I agree with Mark Powers. The appraisal districts seem to get the blame but they are not the ones who determine budgets and spend the money. The appraisal values are not the problem. The problem is our local government entities who are setting the budgets. Lets see if those taxing entities hold the tax rate the same next time appraisal values drop?
And quite frankly, we the public are as much to blame. My point – how many people show up at city council, county commissioner court, school board meetings and scrutinize budget proposals?
Aug 26, 2016 9:36am
Aaron Layman “The appraisal values are not the problem.”
LOL! You apparently do not own property in the Houston area. Appraisal districts and the values that they are allowed to extrapolate based on flawed algorithms and assumptions are ABSOLUTELY part of the problem! The data/values spit out by your local CAD may have little to no resemblence to real market value, and as a homeowner you have little access to due process to correct the problem. Sure you could spend $500 on a tainted arbitration system or $30,000 to sue in district court, but what would be the point if it only saved you $500-$1000 on your tax bill?
We are talking about a systemically corrupt system that is designed to allow everyone operating/enforcing it to deny responsibility for the end product, including CAD officials and local government “representatives”. It’s all about keeping the revenue flowing in to keep budgets balanced regardless of the facts.
If the values are not part of the problem, how can HEB sue the pants off of the Fort Bend CAD and get a 35 percent reduction from the original notice value, saving over $200,000 in property taxes on just one store, one location. Can your average homeowner get a reduction like that?… Of course not! Why? Because the system is rigged to limit real due process (substantial reductions) on residential values because that’s where the bulk of the revenue is generated in many cities. Your typical middle class homeowner is now a sitting duck/piggy bank for this operationally corrupt system.
Aug 26, 2016 10:12am
Cathy Mallia This is one more example of the media not doing their jobs. They print whatever press release is issued and do not investigate and post editorial comment alongside it. This lower-the-rate-raise-the-taxes program has been implemented many times during my career, and the progression, from press release relief to tax bill shock, is totally predictable by now. Then, if you have the time and are brave enough, you can go protest your taxes, where the max they will lower is 10%, claiming your taxes are in line with your neighbor’s increased taxes. They don’t tell you the neighbors are protesting theirs, too. Even if they lower your taxes the full 10%, it’s still revenue-generating for the taxing authorities.
Aug 26, 2016 8:55am
Aaron Layman We are talking about systemic corruption from top to bottom. There is no accountability for any of the crony capitalist bureaucrats running this charade, and they all point the fingers in opposite directions. Here in the Houston area, one local CAD has even been exposed blacklisting arbitrators to prevent homeowners from getting relief on their property taxes…
Aug 25, 2016 9:15pm
Jack Ol Bean a lot of my neighbors are selling because they can’t afford the taxes
Aug 25, 2016 8:51pm
Sue Slim Real Estate Broker at Real-estate Agent –
Every year I protest my property taxes just to see it increased again the next year, some times it gets reduced by submitting market analysis and adjustments, I find that the tax authorities are not helpful, it makes me sick to my stomach that I have to deal with this on yearly basis, and why property taxes are so high in Texas, we work so hard to retire decently, then we are forced to sell our houses so we can avoid paying such high and ridiculous property taxes, some thing has to be done to stop this
Aug 25, 2016 7:44pm
Mark Powers Property Appraiser at Deaf Smith County Appraisal District
Good article, all to often the Appraisal District gets the blame and the criticism from what a school, county or city does.
Aug 25, 2016 5:23pm
Cathi Cross REALTOR®; at Coldwell Banker United –
Perhaps in your county; however, Fort Bend Co Appraisal District likely deserves any blame they receive.
Aug 26, 2016 2:22am