Harris County Property Taxes Are Skyrocketing

Everything’s bigger in Texas, including, as of 2022, property taxes. While this famous moniker pokes fun at the biggest state in the US, Texas is now newsworthy for its super-sized property tax problem. The real estate market in Texas is booming, much like the rest of the nation, with the average price of a home sitting at  $295,319, a whopping 24% increase from last year. 

Harris County is the most populous county in Texas and the third-most populous county in the entire United States. Over 16% of Texas’s population resides in the county, with no signs of slowing growth. Despite a global pandemic and rising interest rates, demand for homes is stronger than ever. Keep reading to find out just how high experts predict Harris County property taxes to go. 

The Sticker Shock Of Harris County Property Taxes 

In the most populous county in Texas, Harris County, residential home values have surged by 15%-30%, per Roland Altinger, the county’s chief appraiser. Because property taxes are based on the assessed value of your home multiplied by your area’s tax rate, this unprecedented increase coupled with an already high county tax rate is astronomical. Harris county’s tax rate is 2.03%, double the national average. Harris County sends property owners their market and appraised values for the tax year each spring. These values then inform cities and school districts about yearly budgets. 

County tax appraisals are leaving homeowners with sticker shock. The Harris County Appraisal District expects home values to rise by around 15%-30% when notices are sent out this spring. According to the Harris County Appraisal District, most homes will be on the higher end, increasing by 20% or more. Although market values went up in 2021, at 8-10% respectively, no one saw such a dramatic increase coming in 2022. The Harris County Appraisal District attributes the growth to population growth, low-interest rates, supply chain issues, and the rise in the number of people who work remotely. 

Property Tax Exemptions 

The Harris County Appraisal District looks at comparable properties to assess Harris County property values. With data from recent property sales, appraisers estimate value while also accounting for the age of the home and location. 

Even with high assessments, homeowners have exemptions and the option to challenge the value. Exemptions help offset some of the property tax burdens. Exemptions include, but are not limited to: 

  • Residence homestead/inherited residence homestead
    • All residence homestead owners are allowed a $25,000 homestead exemption from their home’s value for school taxes.
  • Age 65 or older or disabled persons
    • All homeowners aged 65 years or older qualify for a $10,000 exemption.
  • Disabled veterans and surviving spouses of disabled veterans/first responders killed in the line of duty
    • A disabled veteran who receives 100% disability compensation may be entitled to a total property tax exemption.
    • This exemption also covers surviving spouses.

After a home’s market value is determined, exemptions are factored in to lower property taxes. 

The Harris County Appraisal District encourages property owners to check their website to see what exemptions they are entitled to, the requirements, and how to apply. 

How To Protest Harris County Property Taxes

Harris County real estate values are climbing, and while this usually spells good news for sellers, the stark increases are becoming a nightmare for homeowners come tax season. 

Beyond exemptions, homeowners can protest their home value assessment if they feel their properties have been misjudged. Protesting can save property owners some money on their bills if they have the evidence to back up their claims.

If you want to file a protest in Harris County, you have until May 15 or within 30 days of receiving your notice to do so. 

Everything’s bigger in Texas, but your property taxes don’t have to be! We encourage all homeowners to consider protesting their assessments.

How Texas Property Tax Reductions Can Help You Save

Texas Property Tax Reductions (TXTPR) can help you reduce your tax burden. We have a proven track record of success. We have successfully reduced property tax values for over 97.6% of our clients, with an average reduction of $42,302 and an average tax savings of just over $1,184.

Contact us here to see how we can help you save. 

What Goes Into Property Taxes?

No one enjoys talking about taxes; in fact, it’s very impolite dinner conversation in most circles. Property taxes are especially dicey to discuss, as they fluctuate massively from year to year. 

Because property taxes are based on a home’s value and a county’s tax rate, if home values jump, taxes do too. Just look at Harris County in Texas, with home value increases of 15%-30% expected this year. 

As with most unpleasant things in life, however, property taxes are something you should be aware of, so you can make informed decisions about where you live. Let’s examine what goes into property taxes. 

Property Taxes Defined

A property tax is a tax paid by a property owner based on the assessed value of their real property. In the U.S., these tax rates are set forth by the state and local counties. Revenue from property taxes is used to fund school districts, community amenities (roads, emergency services, etc.), and other local expenses and projects. Property taxes can vary widely between states, with Illinois and New Jersey taking the cake for the highest tax rate. 

Homeowners pay property taxes based on their home’s value (as assessed by a county appraiser) and the state’s tax rate. In 2020, the average single-family home in the United States had $3,719 in property taxes, for an effective rate of 1.1%. 

The Assessment Process For Property Taxes

Assessed Value

To determine a home’s value, counties will order an appraisal on your property. This can happen yearly or every few years, depending on where you live. Counties will take the value the appraiser came up with and the home’s market value to create an assessment ratio. 

An assessment ratio =the appraiser’s value divided by the market value. For example, if your home’s appraised value is $500,000, but the market value is $550,000, then the assessment ratio is 90% (500,000/550,000). The assessment ratio represents the percentage of the home’s value that’s taxable. 

Exemptions 

Luckily, most areas offer property tax exemptions to specific demographics to lighten the load. The exemptions can make it easier for homeowners to afford their property taxes and may even eliminate property taxes. 

Some common property tax exemptions include:

  • Homestead exemptions
  • Senior exemptions
  • Exemptions for people with disabilities
  • Exemptions for veterans
  • Exemptions for first responders
  • Exemptions for surviving spouses of first responders, veterans, and seniors
  • Income exemptions

Paying Property Taxes

Every county will have different rules about when property taxes are due, but paying on time is essential to avoid tax liens. Some homeowners opt to pay their property taxes in full, while others make quarterly payments. However, for most homeowners with mortgages, property taxes are taken out of an escrow account. 

When you finance your home with a lender, you can set up an escrow account to pay your taxes. Your servicer estimates your property taxes for the next year, then breaks that amount into 12 payments that are tacked on to your monthly mortgage payment. That money is put into an escrow account, and the lender uses that account to pay the taxes for you when they’re due. Your escrow payment will increase your monthly mortgage payments, but not by much, and it’s worth it to avoid being stuck with a hefty bill.

For example, if your estimated property taxes are $4,000, approximately $333 per month of your mortgage payment would go into escrow for property taxes.

If you disagree with your county’s home value assessment, you can protest it through your county’s appraisal district. You will likely need to fill out a form by a specific date detailing your rebuttal and attend a hearing to present your evidence, though this varies by location.

How Texas Property Tax Reductions Can Reduce Your Tax Bill

Texas Property Tax Reductions (TXTPR) can help you reduce your tax burden. We have a proven track record of success. We have successfully reduced property tax values for over 97.6% of our clients, with an average reduction of $42,302 and an average tax savings of just over $1,184.

Contact us here to see how we can help you save. 

“You must pay taxes. But there’s no law that says you gotta leave a tip.”–Morgan Stanley advertisement

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