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Pending property tax legislation you should be aware of

Yesterday at the Texas state capital, Senate Bill 2 easily passed the Texas House and next heads to a conference committee to hammer out the fine details, before then moving to Governor Abbott who has championed this idea as one of his key campaign promises.

The gist of this law is that taxing authorities, with the notable exception of public schools which usually represent the largest portion of your tax bill, will be limited to raising your property taxes by more than 3.5% over the previous year. Any proposed higher tax would require a public vote.

Many clients have noted that their recently received appraisals have skyrocketed this year.

While it can’t be said with any certainty, it is plausible that county officials see this as one last chance to sock you with the full 8% annual increase they’ve been permitted up to this point. As such, the best remedy to counter any increase in your appraised property taxes is to protest them.

Any homeowner can contest their appraisal, but you better be fully prepared to back your claim that your home is excessively appraised. After going that route one time I realized you can’t fight city hall (or, in this case, the county appraisal district). However, there are numerous agencies that are well prepared to represent you and contest the appraisal on your behalf. As in most cases, leaving it to a professional is the way to go. Furthermore, most agencies have a contingency arrangement whereby they only charge you in the event of a successful reduction in your appraisal. Most charge somewhere between 30-40% of the amount saved (e.g., if your home appraisal resulted in a $12,000 tax bill and the agency managed to reduce your appraised value so that the tax was reduced to $11,000 you would then owe them $300-400).

While the savings may not seem significant, keep in mind, that this then keeps your future years’ appraisal lower – all the better, if the maximum increase will be reduced to a 3.5% hike.

One final note, please ensure that your home has been properly homesteaded. Not only does this shave off $25,000 from the appraised value of your home it also provides creditor protection and is more apt to obtain some appraisal relief since only owner occupied homes qualify for homestead status, and, at least in Austin, the city is discouraging owners from renting out their homes.

As always, if you have any additional questions, please don’t hesitate to call or email me.

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