Over the years, Texas has been known for many things, horses, farmland, summer heat, and the Dallas Cowboys. One of the least common things that has been associated with Texas is the extremely high property taxes. In fact, at this stage, it has gradually grown to become a fact of life for most Texans. Some Texans have made peace with their property valuations. Many others do not even know you can protest that value. Most do not even think about it throughout the year. However, the shock really hits them hard once the tax bill is mailed every October. Move in from out of state and you are really in the dark.
So, if you are planning the move to Texas, we need to talk. You should brace yourself for Texas’s tough property tax policies.
Michael Reeves, President of Dallas, Texas based REV Tax Group, a property tax lending and protesting firm, says it is a common mistake. “Texas is a very business friendly state, it is perfect place to raise a family, the hospitality is second to none, there is no state income tax, we have an average sales tax rate, as well as low regulations, but we have the worst property tax laws in the United States. People just do not do their homework and they get flat out blindsided when they move here. We see it all the time.”
REV Tax Group’s client Leslie Diamond moved to Austin, Texas from Northern California 4 years ago. She was hoping to escape the high tax burden of California but ran into a buzz saw with her Texas property taxes. “I opened my bill that first October in my new home, and it was like $24,000, said Diamond. I thought it was junk mail or a joke at first. I called them and turned out, nope I owed $24,000 to Travis County. I looked for every excuse, I told them I owned my house and then I argued that nobody told me.” Unfortunately, Travis County did not care. Texas Law says the taxing county has the right to collect the full tax balance owed as well as any penalties and interest accrued for being late. They will even go as far as seizing the property if the outstanding taxes are not paid. “In Texas they will take your home or business period if you don’t pay them, Travis County told me that.” Diamond said, “and the way they seize the property is flat out scary. They just take it!”
Before REV Tax Group called, Ms. Diamond had settled on a one-year payment plan with Travis County which was the only option she was presented with. She began to make payments, but soon felt trapped because of the high penalties and interest on the account. “That payment plan was a joke, she said, I paid like 2 grand a month. It seemed like I never made a dent in the balance. REV Tax Group called, and I almost hung up on them because I thought they were just trying to sell me something, Ms. Diamond said jokingly. I am glad I didn’t. They paid my taxes off and stretched the balance out over 10 years. I can afford the payments because the interest is annualized and pennies extra. It was a blessing. The best part, as we speak REV is protesting the taxes with Travis County to lower my property taxes for the future.” Her advice to other Californians. “Know the tax laws in the state you are moving to prior to moving, don’t just look at the great parts of your new home and new state, research the tax laws there. Oh, and if you live in Texas protest your taxes every year.”
Yes, do your homework. As a matter of fact, in Texas there is a Texas Taxpayer Bill of Rights which gives Texas citizens the right to protest the valuation the county puts on their property. Mr. Reeves was extremely passionate about this topic. “That’s the thing most taxpayers either A, do not protest because they think it is too much trouble, or B they do not know they can. That is where we come in to help the taxpayer fight back. You need to fight, or it gets out of hand. Think about it. We check every other bill we get, phone, electricity, we even check our bank account 20 times a day, and if something is wrong, we dispute it. Think about your restaurant bill, you check it to, right? Well, your property tax bill is wrong, so say something, do something.”
So Why Are Taxes So High in Texas?
If you have been in the Real Estate industry, you most definitely know that tax rises are the results of a series of factors. Basically, there are three key factors that come into play when it comes to Texas taxes.
• Lack of a personal income tax
• Local taxing authorities having the mandate to set the property taxes
• Appraisal values being on the rise
Texas is divided into counties. Moreover, the fact that there is no income tax makes the counties depend heavily on property taxes as a way of raising funds for essential public services. This includes schools, fire departments, law enforcement departments, and other public service sectors. Yes, Texans might be enjoying the lack of state income taxes, but it will always translate to higher property taxes. At the end of the day, public funds must come from somewhere, don’t they?
Different counties and localities have different needs that they would want to fulfill. Having the mandate to make their own tax decisions, the authorities will have the rates varying compared to other states.
Let’s compare the taxes from Texas with other states. As you would expect, taxes are significantly higher than others. The national average of the United States falls between 1.07% and 1.22%. However, when you look at the Texas analysis, you will that the tax average can even get higher than 1.83%. In addition to that, the state has a sales tax rate that falls around 6.25%. Add all this together and yi7 vet an overall state tax of up to 7.6%. From a different state’s perspective, this tax is quite high! This has caused a growing concern from Texans, the delinquency rate.
Texas Property Taxes by County
Before you dive into this, it is important to keep in mind that the figures provided might not be as accurate as of the situation on the ground. However, these tasks depict the real situation going on in Texas. For further information, it would be advisable to visit official websites. This is because the figures keep on changing from time to time, but they will always fall under a narrow bracket.
That said, below are some of the counties with the highest property tax rates in Texas.
• Harris County
Harris County is one of the counties that rank highest in the high tax list. It has a staggering 2.09% in property tax rates. This includes places like Houston and its environs. Much of this tax is used to find school districts in the area. Being the most populous county (it has more than a 4.5 million population. Its median home value is something close to $155,000.
• Tarrant County
Tarrant County is also affected by these high taxes. It has an average tax rate of 2.16%. To add to that, you will realize that most of the cities in this county have even higher personal tax rates. With a population of more than 1.5 million, the county’s average home value is around $159,000.
• El Paso
Compared to the other counties, El Paso is not such highly populated. It has a population of approximately 800,000. Their average tax rate is 2.23%. For the houses, buying property here will cost you around $117,000. Yes, this might be a good thing, considering the fact it is lower than the national average.
Just like in El Paso, Web County has an average tax rate of 2.22%. However, here you will find property at relatively lower prices. To top it off, Webb County has a population of around 750,000.
Some people believe that the less an area is populated, the lower the tax rate will become. This might be practical in some places, but the figures at Webb County beg to differ. They prove that sometimes that is not always the case.
• Fort Bend County
As per the statistics, this county ranks at the top of the list of high tax rates per county. It has an average property tax rate of 2.23%. This is such a staggering figure; it is nearly twice the percentage of the national average tax rate. With a population close to 900,000, the county’s median property value will range from $200,000 to 250,000.
It is worth noting that these figures are just averages. These rates can vary from city to city within the counties. Additionally, the highest tax rates reported here tend to be concentrated more on the metropolitan sections, some of which even span across different counties.
However, these figures will give you a clear picture of the situation in Texas as a state.
This is a wake-up call to anyone who is looking to move to Texas, especially from California, for one reason or another. Yes, you might be out here in search of better housing or more opportunities, but it would be great if you first consider the rates.
As for REV Tax Group they offer tax solutions for anyone who finds themselves in a challenging situation when it comes to property tax. They have a very consumer friendly approach and if you need help give them a call. They will Pay, Protect, and Protest your Texas Property Taxes.
“As long as you know what you are getting yourself into, Texas is open for business,” said Reeves. Ya’ll are welcome here with open arms and we will greet everyone with a good ol’ fashion HOWDY at the door but remember your property taxes won’t be as nice as the people.”