Dear Tax Doctor: From reading the recent post, the one about the guy building a compound on Walnut Hill Lane, it seems that you can get a tax break from living on a busy street. Someone else also told me this recently. We want to lower our property tax burden and get a smaller house. I am told to buy one on a busy street (our kids are grown) to keep the property taxes down, but realize we may not see great appreciation in that busy of a location location. Is this true? How much can you save by buying on a busy, hustle bustle street? Thanks! – Traffic Cone Lover

Dear Traffic: When you check out DCAD, you will see that the properties fronting Walnut Hill are reduced 40% as compared to the land on the interior streets. Your first assumption may be that it is a “tax savings opportunity” to live on a busy street, but I would encourage you to think more broadly. It is true that there is a 40% reduction on that land, but why? Would you want to live on Walnut Hill Lane? What about Northwest Highway? If so, how much would you pay for it? Would traffic be a factor? Would size also be a factor? Would ISD also be a factor? It’s like living on Mockingbird without the HP ISD.

Ultimately, the land valuation per DCAD should be based on what people will pay for those lots on Walnut Hill. All in all, I feel that the total land value for the properties on DCAD seems about right. I do not think that those homeowners are getting a “tax break” by living there. Instead, I feel that their land is valued lower because it IS actually worth less.

If you are trying to downsize and are looking to be tax savvy, pay closer attention to the tax rates. Tax rates in the Dallas area range from about 2-2.8 percent. Buy a house in a lower tax rate area, and then you can correctly say that you are taking advantage of a “tax savings opportunity.”

May means great weather, less sneezing, and, in North Texas Real Estate parlance, time to grit our teeth over home appraisals. Property tax appraisals went out Friday, so this coming week we should be getting the hard, cold news about property taxes. Dallas rates have gone up. Property values have gone down. Will the Appraisal District reflect this in our bills or look the other way to sop up much-needed revenue?

Do you anticipate your property taxes will go up or down?

Couple things: Jim Schutze over at the Dallas Observer had an interesting article this week on taxes, and the mayoral candidate’s rhetoric that we need to expand the business tax base in Dallas. For what? (To lower our property taxes is the assumption, I guess.) Schutze was another journalist getting hoarse shouting, for the 300,000th time, the inequity that the property tax burden in Texas weighs on the shoulders of homeowners rather than commercial property — I agree:

“What is this crap about the importance of attracting more businesses to the city? They throw it out like a line from the Bible or something — especially mayoral candidates Mike Rawlings and Ron Natinsky. Got to “grow that tax base.” Only way we can grow that tax base is by attracting more businesses, they say.”

The real growth in this city in the last 10 years, he says, has been in residential, which has risen almost 65 percent. Commercial real estate values are up only 31 percent. In 2000, he says, residential was 40 percent of the total tax base. In 2010, it was 47 percent.

“Part of the problem with commercial, of course is that the values at which commercial properties are taxed are often substantially below market values. For whatever reasons (and I think I know what some of them are), the Dallas Central Appraisal District seems to like to low ball commercial values.”

I have long wondered why the tax base has not improved from the flourishing, expanding downtown. The reason is that commercial real estate pays less in taxes. Some argue they should, because businesses use fewer city services — which is news to me. Last time I looked, business created way more waste. But apparently this year, commercial is going to see rates go up.

According to the Dallas County Appraisal District, about 12 percent of residential property values will increase this year, very similar to last year,  according to spokesperson Cheryl Jordan via the Dallas Morning News. But oh boy get ready: more commercial properties will increase in value this year than last. Last year, 4,500 commercial properties had value increases, and this year that number will jump to 22,135.

DCAD anticipates just 23 percent of residential properties will lose value, compared with 34 percent last year.

So you know what that means: our Tax Doctor is back! Tiffany Hamil Mackey will be here to answer your questions as you get your tax bill. I was talking to her last night about what she thinks is coming down the pike, and she thinks the city may decrease land values while increasing improvements to keep appraisals the same. In other words, if your property is valued at $500,000 with $100,000 on improvement and $400,000 on land value, she thinks that they will reduce land to $200,000, but increase improvement value to $300,000 to preserve revenue. This means that the total value of your home goes unchanged, but suddenly your improvement just increased in value 300% in one year?!??! Who’s playing games here?¬† She‚Äôs already noticed whole blocks of areas in Preston Hollow subject to this exact situation.

Even if your taxes have stayed the same, Tiffany says you should fight. So get ready, the Tax Doctor is IN!