Did you know that Texas doesn’t have a state property tax? But it does have local property taxes, used by local governments to fund schools, police, public health care, and other necessary services.

These property taxes get assessed differently by each local governance depending on a variety of factors that they deem important or not.

Local governments also have the right to forgive certain properties from paying taxes. For example, properties used for pollution control and solar or wind-powered energy devices are exempt from ad valorem taxation.

There’s a lot more to learn about Texas real estate taxes, so keep reading through the article below.

Property Tax Values Determination in Texas

Tax on Rental Properties

The local appraisal districts are the ones that handle property tax valuations for each county. And it’s not part of the local or state government. Each appraisal district has its own board of directors.

No matter what kind of property you own, be it business or personal, your property will be assessed on January 1 of each year. This assessment is based on a lot of different factors and is different for business and personal properties.

The assessed properties will have a value assigned to them. This value will indicate the real estate taxes they have to pay.

Business Personal Properties

Even though this isn’t necessarily related to real estate, business personal property gets stored on your real estate property and you will need to consider them when paying property taxes.

The following items fall into this category:

  • Fixed assets (machinery and equipment, office furniture, and IT equipment)
  • Farm and vineyard supplies
  • Molds
  • Tools
  • Leased equipment
  • Merchandise inventory
  • Raw materials
  • Goods in process
  • Finished goods
  • Supplies
  • Registered vehicles

Tax returns for business properties are due by April 15 of each year. No matter what your business property costs or how large it is, you will want to file the taxes to the appraisal district annually.

Once you file your tax return, the appraisal district will send you an assessed value notice between May 15th and June 15th.

If you disagree with the valuation, then you will want to appeal it within 30 days of the issuance of the assessed value notice. However, if you believe that the assessed value on the notice is correct and no changes are necessary, you don’t have to take any steps. The assessment will be considered final.

Keep on top of these dates and don’t forget to keep your mailing address up-to-date since you will receive all your documents by post.

Real Properties

If you own actual property like single-family homes or apartment buildings, then they would have to follow the same recourse as above.

  • Appraisal district issues assessed value notice between May 15th and June 15th
  • The appeal filing due date is within 30 days of receiving the assessed value notice
  • No steps taken means the assessment is final

The appraisal valuation method is different depending on the property and what it’s used for.

For example, for single-family homes, a market or sales comparison approach is used to assess the value. That is, the property is compared to similar ones in the area, and the price at which similar houses sell is surmised.

This value is then used to indicate what the property is worth. If the Texas real estate market is doing well, then your property taxes will be higher, and vice versa.

In the case of properties with income potential, like apartment buildings, the income level is used to appraise the property value.

As you can tell, property valuation is not an exact science, so if you believe your property was valued incorrectly, make sure to appeal it. You never know – your property taxes might get reduced considerably.

Property Tax

Tax Exemptions to Consider

If you believe your Texas property taxes qualify for a tax abatement or exemption, then you will want to file this application with the appraisal district before May 1st.

For residential properties, here are some of the exemptions to consider:

  • Primary homesteads
  • People over the age of 65
  • Surviving spouses of first responders killed in the line of duty
  • Disabled veterans and surviving spouses of disabled veterans
  • Solar panels on the property (get more information here)

For commercial/business properties, the Freeport exemption is the primary one. This happens when the majority of your goods produced are shipped out of state every year. Also, if there are natural disasters during the year that cause property damage, that will qualify for an exemption as well.

Make sure to inquire with the appraisal district office if you believe you qualify for an exemption or abatement.

Best Practices for Real Estate Tax Filing

Always file early! This is the most important thing you can do to ensure you don’t pay fines or have issues with your assessed tax value notice.

The earlier you can file your taxes, the faster you will receive your assessed value notice. Again, make sure to read through everything carefully and if you feel like there’s a mistake, then file an appeal asap.

Do not delay any of these filings or appeals, as it will cost you a lot in the long run.

Professional tax preparer

If you feel like your filing will get delayed due to extenuating circumstances, make sure to apply for a 30-day extension through a written request to the appraisal district.

There’s a 10% penalty fee charged for every tax return that gets filed late or completely unfiled.

Texas Real Estate Taxes: Stay Timely and Save

Don’t let Texas real estate taxes become more of a headache than they need to be. Follow the deadlines accurately, file on time, and you should enjoy living in Texas greatly.

Visit the appraisal district in your county or contact them by phone if you are confused about anything, as they are quite helpful.

Also, keep reading through related articles on our website to stay informed on various subjects.

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