Understanding Texas Property Tax Rules

As a property owner, you have a variety of responsibilities like maintaining your home and making timely mortgage and homeowner’s insurance payments. A third responsibility rests with property taxes, and it’s important to understand how taxes in Texas work so that you are aware when you may need to file a property tax appeal.

What the Texas State Constitution Says About Property Tax

A series of five “standards” are written into the Texas Constitution that are designed to provide an equitable solution to taxes that pay for local municipal costs, emergency services, schools, and other local government needs.

The standards include:

  • Taxes must be uniform and equal so that everyone pays his or her fair share of taxes.
  • Tangible property is subject to taxation at a rate based upon market value on January 1st.
  • Property is subject to taxation unless there is a state or federal exemption available.
  • Tax collectors will provide property owners with reasonable notice of tax increases.
  • A property can only have one appraised value in a single appraisal district.

There are some exceptions to these rules and some options for exemptions. A property tax attorney can advise on whether you might qualify for exemptions, as well as whether it might be in your best interest to look into property tax appeals. Options and help paying property taxes might be available under some state regulations.

Did You Know? There are more than 3,900 local governments in the State of Texas that collect and spend taxes. These local government groups include school districts, cities, and counties.

How are Property Taxes Collected?

There are several important dates throughout the year that guide the process of appraising property and collecting taxes. At the beginning of the year, the government records the value of properties around the state. Also, tax officials collect a variety of data related to taxable properties including the owner of the property, its value, and who must pay tax on the property.

During the first few months of the year, the state will receive various applications for tax exemptions and property tax relief. It’s at this time when property owners meet with their property tax advisors to determine the best way to proceed with a protest.

Beginning in May, the Appraisal Review Board (ARB) will begin meeting with people who have filed protests. Property owners may believe their property values aren’t correct, or they might feel they should have been granted an exemption. It’s important to meet with a property tax consultant before May rolls around so that an appeal can be filed promptly.

In the fourth quarter of the year, each of the departments and government bodies responsible for collecting taxes will adopt official tax rates and calculate the amount of taxes each property owes. Taxpayers are given until the next year at the end of January to pay their property taxes.

After the January 31st deadline, the state starts to charge interest on what is still owed, and some unpaid tax debts may also lead to financial penalties. In some cases, the state may consider legal action to collect unpaid taxes.

Don’t Pay Taxes Without Understanding Your Rights

As a citizen of the United States, you know that you pay taxes to fund the government and the programs and services upon which we rely each day. However, don’t be afraid to ask for property tax assistance if you feel you’re being treated unfairly or that your property has been appraised incorrectly. Property tax consultants can help make sure you’re not paying more than your fair share of property taxes whether you own a business or residential property.