Understanding Texas Property Taxes

When you own property in Texas, you will have to pay property taxes on that property.  The tax money the State of Texas collects is used to pay for a number of public services throughout the state.  These include paying for city streets, public schools, police protection, county roads, fire protection and more. Although you may understand why you have to pay property taxes, it is still helpful to understand how these taxes are determined how they affect you.

Determining the Value of Your Home

In order to determine your property taxes, the value of your home must first be assessed.  The amount of property taxes you have to pay for your home is based on the assessed value of your home.  As such, property valued at $200,000 will generally owe twice the amount of tax as a property valued at $100,000. 

Since property taxes are local taxes, the value of your property is also determined locally.  Most of the homes in Austin are appraised and taxed by the Travis County Appraisal District.  In addition to assessing the value of your home, local officials also establish the rates of the property taxes applied to your property.  At the same time, State laws govern the property tax process. 

Property Taxes and State Law

There are five basic principles associated with Texas state property laws.  These include:

• Taxation must be uniform and equal
• Tangible property must be taxed based upon its current market value
• All property is taxable
• Property owners have the right to be notified about increases in appraised property value
• Every property must have one appraised value

Of course, there are potential exceptions to some of these guidelines.  For example, agricultural property may not be appraised based only on its current market value.  This is because the current market value refers to how much the property could be sold for at the time, but agricultural property has the potential to produce crops and livestock of great value.  Landowners that grow trees for timber may also have a higher appraised value based on the potential value of the timber.

One law that does not have any exceptions, however, is that all property is taxed on a uniform basis.  This is true whether the property is residential or commercial.  As such, business owners do not receive a special break that residential property does not receive.  At the same time, they are not taxed beyond the assessed value of the property.

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