14% Increase Coming In Dallas County? Texas Has Fifth Highest Property Tax Burden in the USA
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Your tax appraisals are supposed to be in the mail today, which means we will all be drinking a lot tomorrow.
“The average increase for almost every homeowner will be around 14%, is what we have heard,” says our Tax Doctor, Rob Wheelock.
Why?
“Look at Case-Shiller and sales, look at what you have been writing,” said Rob. “Values are up overall, including commercial, which might even get hit heavier than residential.”
What can you do besides buy enough booze today before the limit on your credit card is limited? I’d get a licensed tax professional to review your property value against comparative sales (“comps”) and equity. Can’t do that, call your Realtor for help. Or write us here at CandysDirt.com.
Oh, and don’t look at Zillow lest you get laughed out of the tax office.
“You need sales comps,” says Rob. “The new appraised values I’m looking at in Tarrant and Harris Counties are even under market value — we are finding examples of similar homes in the neighborhoods that have higher values.”
In other words, Rob’s finding that even though the values are up, they may not be as high as what a professional could find. Yikes!
Tarrant County is a big property tax mess. The average increase for 100 accounts was 47% in proposed values in some cases. (TC didn’t increase any values year before, bills were really screwed up. Residents complained about property tax statements that don’t include homestead or senior exemptions, and missing crucial information, like the property owner’s name, and some owners receiving no bills at all. The county mailed out tax statements about a month ago. The guy in charge of the county tax office, Ron Wright, is spending his time putting ‘In God We Trust’ on everything. Folks there say he ought to pay more attention to taxing.
Wright took over as tax assessor-collector after Betsy Price relinquished the job to run for mayor in 2011. Wright attracted national attention last year when he began adding “In God We Trust” at the bottom of tax statements, on the envelope flaps, and on an enclosed pamphlet. About 30 residents complained to the tax office. Wright was steadfast.
“It’s the good news/bad news scenario: land values are going up so fast, you may have to invoke the equity part of the tax code, which requires all taxation to be equal and uniform,” says Rob.
Here is someone I am following and plan to interview soon: Texas Senator Paul Bettencourt, who really wants to reform the system:
Comptroller office data shows that, statewide between 2005 and 2014, property taxes are rising 2.5 times faster than median household income. In Dallas County, county tax levies have increased 45%, city tax levies have increase 41%, and median household income has increased 20%. In Tarrant County, the City of Fort Worth has increased tax levies 55%, the highest of the four entities surveyed, while county tax levies have increased 36%, and median household income has increased only 20%.
“When you have property taxes increasing almost three times faster than Texan’s paychecks, the system is unsustainable,” said Chairman Bettencourt. “I continue to be astonished when I hear the claim that this is not a tax increase. A 20% increase on homes in two years is a tax increase, and I will defend the taxpayers on this issue.”
Amen. Bettencourt has spearheaded the Committee on Property Tax Reform and Relief, with a panel of experts, in Arlington and other cities across the state. Municipalities say they are lowering rates but property values are jumping so high money is pouring into tax coffers and being used for, say, bridges to nowhere. Bettencourt thinks this is taxation without representation, and I think he’s right!
Which is probably why Steve Brown wrote about how high our taxes in Texas are today. I have been screaming about it for years, even going so far as to say that Preston Hollow should secede from the City of Dallas. I just think we pay way too much in property taxes and do not get our money’s worth in City services.
And lookie here: turns out Texas ranks as the state with the FIFTH HIGHEST PROPERTY TAXES in the nation. Only totally messed up Illinois (my home state, at least two of their recent governors have been crooks, and look who is the Mayor of Chicago) New York (no comment), New Hampshire and New Jersey. This according to a new study by CoreLogic.
Where is Taxachusetts on that chart? Number 15.
And the funny thing is, most of the states with higher median tax rates are in the northeast. Except us. Our median property tax rate in Texas is 2.17%. In Dallas County, it’s 2.2 %. Some areas of Irving are even over 3%! That means the average property tax rate in Texas is about 70 percent higher than the nationwide average, 1.31%. So take your average $200,000 home and spend $2620 (on average) in the US, spend $4300 in Texas.
I know what you are thinking: we have no state income tax. Well, neither does Florida and their property tax rate is 1.32%.
While we claim that those high property taxes make up for paying no income tax, and are deductible, a recent study by WalletHub says hogwash. Texas residents total tax burden (state and local) is hefty, 11% — so we part with more than ten percent of our income to live in the Lone Star State.
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Since y’all enjoyed my call to end real estate transaction non-disclosure, I’ll speculate here. Florida may have a lower tax rate than Texas because they disclose selling prices and so their system is inherently more accurate. I think Texas has higher rates because our property valuations are inaccurate (low). The REAL question is whether we pay more actual dollars in tax based on actual valuations when compared to disclosure states like Florida.
In the example above, a home valued at $200,000 pays $4,300 in taxes in Texas…but it’s true market value is likely $300,000 to $400,000 in which case an accurately assessed home of THAT value in Florida would actually pay more in dollars.
FYI, of the top 18 states with the highest rates, only Texas is non-disclosure. Alaska (19th) and Wyoming (48th) are the other two states besides Texas that are both non-disclosure and no state income tax and their rates are 1.31% and 0.65%. As I wrote, neither can be considered densely populated requiring a large tax base. Oil revenue pays Alaskans to live there and Wyoming probably has more livestock than people.
Warren Buffett has a 50’s era home in Omaha (said to still have orange shag carpet), as well as a beach front property in La Jolla.
Due to the vagaries of proposition 13 limiting ad valorum tax increases in the State of California, Buffett notes that his ad valorum taxes are higher on his Omaha abode are higher than his La Jolla beach front house.
http://www.appraisaldistrictguide.com/texas/exemption/homestead-maximum.html
There is a limit of 10% on homesteaded properties (plus improvements). Or am I reading this wrong?
Alan – the cap applies only to the assessed value i.e., the amount being taxed. There is no such cap on the market (appraised) value. The delta between the values is referred to as “HS (homestead) cap loss”. When the property is sold or the homestead becomes inactive, the cap is removed.
Example below:
Year Improvement Land Market Appraised HS Cap Loss Assessed
2016 $430,168 $132,000 $562,168 $562,168 $0 $562,168
2015 $444,041 $99,000 $543,041 $543,041 $7,712 $535,329
2014 $403,827 $99,000 $502,827 $502,827 $16,164 $486,663
Formatting was lost once I posted – sorry.
The information is wrong. TaxUs is the highest. You have add all taxes, MUDD, school, road, bridges, colleges, hospital, various other districts, etc. the rates are 3 -3:2% on an ever rising assessment at market. (There is a 10% maximum annual appraised value increase for homestead 2 years).
Our Founders went to war against the then most powerful military in history over a little tax on a nonessential beverage (tea), yet we sit quietly accepting taxes and regulations that are killing us.
Well, DCAD appraisals are hitting mailboxes this week. Taxes up the maximum allowed by law, 10% from last year. Appraisals WAY up. Market values WAY up.
The DCAD land value increase is what kills me. In the last two years our mediocre home has increased in land value from $45,000 to $85,000. And don’t even try to talk about it in your tax dispute hearing. They won’t listen … only want to hear objections regarding the “improvements” value. This is out of control.
I think the reason behind this will be the communities design the high tax rate to make sure the urban element stays out.
As a teacher, I’m being squeezed for all the money I have…. and quite frankly, I’m not sure that a weekend job for the rest of my life is going to bring happiness.
I bought my home in 2007 for $122,000. That increased every year and is now over $330,000 in value. When I complained to the Dallas Board, they told me that my house should be valued at over $450,000 BUT they could only raise it 20% at a time.
At the time, I was paying $200+ for property taxes. It wasn’t that bad.
NOW, I am paying $600+ for property taxes. That’s 20% of my pay.
Within this same time period, I now pay $700 for Health Insurance… Another 25% of my pay.
That doesn’t include home insurance & car insurance which is another $350 per month…
That doesn’t include my utility bills which range from $100 to $300 per month.
So while I understand that we need taxes to build roads and education, giving tax breaks to millionaires and billionaires while squeezing every last dollar out of the middle class is wrong and inexcusable.
Do the math and you’ll see that I pay $2000 per month JUST to live in a house that I own & a small house that hasn’t been updated since the early 1980’s.. at that.
$2000 for Property Taxes, Health INsurance, Utilities & Mortgage…
That leaves me less than $63 per day for cell phone, food, gas…. I have never taken a vacation. At this point, I’m thinking that moving to the beach somewhere – tutoring part time – with no home ownership is probably the best move I could possibly make.
The problem isn’t the appraisal, the problem is the tax rates charged by the various taxing entities. You should be talking to your City Council members and County Commissioners and other taxing authorities and find out why they are raising rates over the effective rate. anything over the effective rate is a tax increase. They are all holding Tax hearings now.