Why Do We Pay Property Tax?

Property ownership comes with many advantages for home and commercial property owners. You can build equity and enjoy tax breaks on your federal income tax. However, as a property owner, you also have an obligation to pay local property tax. A lot of Texas home and commercial property owners dislike paying local property tax, and it’s easy to see why. It can be difficult to assess property tax amounts, and they generally raise each year because of an increase in property value. Another common and completely valid reason is many do not understand the reason we pay a property tax. 

The following list supplies a simple breakdown of where your property tax dollars go and why it’s important to stay on top of your property tax payments. 

What Your Property Taxes Fund

Annual property tax dollars help fund our local services. Here in Texas, there are three parts of the property tax system. These include an appraisal district for each county, an appraisal board (ARB), and local taxing units. The appraisal district evaluates and assigns the value of property. If a property owner believes the value is incorrect, they can protest and submit their disagreement to the appraisal board in their county. Local taxing units include special districts, school, city, and county. These units adopt a budget and set tax rates that can adequately fund the proposed budget. When paying your property tax bill, you contribute to your local public schools, police and public safety, library, and maintenance (such as public parks and roads). 

Local Public Schools

Most property tax dollars go towards education in your local public schools, including community colleges. Communities with a strong commitment to outstanding education can see a higher percentage of money going into their local public education system. Property tax dollars help cover the cost of materials, extracurricular programs, special education programming, and other improvements. 

Police and Public Safety

Tax dollars for public safety cover the cost of a county’s legal system, police and fire departments, and hospitals. These funds cover not only salaries of the individuals, but also the cost of utilities and construction as well. Rising cost and inflation can increase the need for a higher spending budget. This, in turn, can increase your property tax bill. 

Library and Other Municipal Buildings

Property tax dollars help fund local libraries and municipal structures, such as a centralized City Hall. The distribution of funding helps maintain a website, form special programming and events, and can enhance access to community resources.

Public Maintenance

Roads and parks require periodic updates and maintenance. Your property tax dollars help keep your roads safe and your community beautiful. Tax money goes towards new construction, lighting, traffic signs, and debris removal. 

What If We Don’t Pay Property Tax?

Even if you disagree with the assessed value of your property, you are still obligated to pay. Non-payment can result in penalties, a lien against your property, and even foreclosure. 

If you fall behind and need help to pay your property tax, connect with the Home Tax Solutions team, and learn how we can help you pay with flexible payment options.