Each year, cities and counties in Texas are required to publish ads outlining their last year’s tax rate, proposed tax rate, and other important information. In August, Dave Lieber of the Dallas Morning News released a report reviewing some of these ads, and his conclusion was that the Texas property tax system may just be the worst in the nation. In this post, we’ll take a closer look at the goal of these ads and help DFW Metroplex property owners – and those across the state – get ready for the property tax bills that are sent out each October.
Lower Tax Rate VS Lowered Taxes
The number one most misleading thing about these annual announcements is that many of the cities and counties declare that they’re “lowering tax rates,” but when you get your bill in October, it’s gone up – again! That’s because while the tax rates are lower, the property values are going up throughout much of Dallas County as well as the majority of Texas’ 200+ counties. So, when your city or county announces they’ve lowered your tax rates, they’re still receiving more tax revenue, and you’re getting a higher bill.
Property Value Annual Assessment
Still confused? Us too. Rather than looking at the increase or decrease in the proposed tax rate, we encourage property owners to take a look at the changes in assessed property values (how much the homes and businesses in the city or county are worth). If this number increases, a slightly lower tax rate will still translate to a higher tax bill in October.
Let’s get a little more specific. In Dallas County, last year’s tax rate was .24% per $100 of property value. That means a property valued at $100,000 in 2017 paid $240 in taxes to the county ($100,000 X .24/100). The proposed tax rate for 2018 remains static at .24%. However, with a little deep digging, you can find out that the value of properties has increased this year.
Simply put, that means your $100,000 home may be worth more this year. Let’s say $105,000. That means you’ll pay $252 in property taxes to the county. Even though the county’s tax rate remained static, you’re still going to get a higher tax bill in October.
Keep in mind, that .24% tax rate is just for the county. Dallas County residents will also need to pay a tax rate for their city, school district, and other special districts. If your property is in the city of Dallas, you’ll have an additional .78% property tax from the city. The Dallas Independent School District adds an additional 1.28%, totaling 2.3% before the addition of any special districts. That means your property valued at $105,000 in 2018 will mean a tax bill of $2,415 before the addition of special districts.
What to do Next
Have you been doing the math in your head as you read and realizing you’re going to be a little short when your tax bill arrives in October? Don’t panic. Take a deep breath and call Home Tax Solutions. We’re here to help residents in all 200+ Texas counties with their property tax payments. Don’t get overwhelmed by late fees. A low interest property tax loan from Home Tax Solutions can save you $100s or even $1,000s on delinquency fees!