In recent years, Dallas has seen a significant increase in market value and taxes. Disgruntled homeowners faced with drastically increased taxes have led to people protesting home values in Texas counties.
Problem areas include residents over 65-years-old not being able to pay for property taxes and the rise of fast-growing school districts. Although, the appraised market value has risen for certain counties, residents are able to lower their value through tax exemptions and make an appeal to the tarrant appraisal district court.
Dallas’ Market Value Relative to Nearby TX Counties
Dallas county’s appraised market value has grown by at least 10% each year and the residential value, in the area, rose by 13%, according to Dallas News. Property taxes are calculated by multiplying the assessed value of the properties, then subtracting the applicable homestead, factoring in age 65+ and disability tax exemption rates, which are determined by taxing authorities.
According to Texas State Law, the assessed value of a real property is determined by the market value of a property on the first day of the tax year, which is January 1st. Yet, County Budget Director, Ryan Brown, said that he expects the final taxable to amount to 8.8%, which ultimately leads to an increase in tax revenues for the county and an additional $31 million for the county’s general fund.
County commissioner, Mike Cantrell, commented that a tax increase is the sign of a good economy, although he would support lowering it to an “effective rate”, requiring cutting the county’s tax rate from 24.3 cents per $100 to 23 cents per $100, according to Dallas News.
A few years ago, North Texas had a reputation of being an affordable area but with a large growth in schools, residential buildings, and job opportunities, the area’s property taxes grew with it. According to H. David Ballinger, a residential real estate company in the Dallas-Fort Worth region, home prices have increased by 33% in the past three years.
Residents who are approaching their retirement or are already at retirement age, seem to be affected the most by the property taxes and ultimately move since they don’t have enough saved for living expenses.
One resident, Angela White, who lives in the Mansfield district, which borders Dallas and Fort Worth, is worried about protesting future property value increases after realizing the value of her land increased, although the value of her home itself had decreased. The value of her one-third acre of land increased from $25,000 to $40,000 but the value of her house dropped from $170,216 to $153,097, as reported by Star-Telegram.
Additionally, White’s property taxes in her current home are $475 per year compared to the $4,400 per year she was paying in Tarrant County.
One contributing factor to the disparity between her property and home value is the fact that Mansfield is one of the fastest growing school districts in the county.
However, Nail and Key reports that the five Dallas-Fort Worth area suburbs with the lowest total property tax rates include, Flower Mound (2.08%), Lewisville (2.08%), Roanoke (2.1%), Frisco (2.18%), and Plano (2.18%).
Where Dallas Ranks Compared to Nation
Texas has one of the highest property taxes in the country. High property taxes can be a hidden cost for home buyers, especially for individuals moving to Dallas from other states that don’t have such high taxes.
Tax rates within Texas have multiple categories that are applied to a variety of authorities and regions:
- Up to 2% in taxes can be assigned to a property’s value.
- Some counties can impose an additional tax of 1.5%.
- Transit authorities can impose a 1% added tax for homes in their districts.
- Special purpose districts can impose up to 2% within their districts.
According to WalletHub’s 2018 Property Taxes by State Report, Texas is ranked as the sixth-highest state in the country. The average property tax rate in Texas is 1.86% of a home’s value and the median home value is $250,000, resulting in $4,650 in taxes, while the average home property assessed value is $142,700 leading to a tax average of $2,654, as reported by WalletHub.
When examining neighboring states, Texas’ property tax rates nearly double several of them. Oklahoma’s tax rate is 0.87%, New Mexico’s is 0.76%, Arkansas is situated at 0.63%, and Louisiana, one of the lowest, at 0.51%.
The national average of property tax rates is 1.21%, which equates to $2,720 annually. Investopedia reports that the average property tax rate in Texas is 60% higher than the national average. Although, Texas is one of the top five highest paying states for property taxes, it have income or vehicle property taxes while most states do.
Solutions
Frustrated Texas homeowners should appeal to the tarrant appraisal district panel to seek a financial reduction. According to CBS Local: Dallas Fort Worth, Olen Frazier, a former businessman who was also chairman of the appraisal review board, gave key advice for individuals seeking this solution.
He notes that residents have several options for protesting their home value, even in Tarrant County. One option is to do it online. People can create an account, look at the district’s comps, make an offer of what they believe the home value should be, and they’ll receive an answer from the system that they can either accept or reject.
The other option is to do it in-person. If a resident chooses to go this route, they must remember that the most common mistakes are made in the beginning when people are filling out paperwork. Frazier notes, if you are appealing to the court in-person, you must check two boxes, “incorrect appraised value” and “value is unequal” or else by law, you can’t compare your home value to others like yours or others that have sold.
Other important tips to keep in mind: spend time researching sales comparisons as you’ll need evidence to back up your claim. Once you find out how your home is compared to others, provide visual evidence like photos and videos.
Ultimately, although property taxes in the North Texas region have risen, especially in the Dallas-Fort Worth area, residents have a way that they can appeal to have their property taxes reduced if they find that their home value has risen exponentially. Even if you only have limited time to make your case in-person, the board is able to review all of your evidence once you leave.
