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Property taxes in Texas – what our clients need to know

by Marvin Jolly

Property taxes in Texas – what our clients need to know

Understanding the property tax system in Texas has been a pain point for homeowners for decades due, in no small part, to the lack of available information and challenges with transparency. A survey conducted by Texas Realtors in 2020 revealed that reducing property taxes was one of the top three issues worrying Texans, along with the economy and healthcare (in addition to the COVID-19 pandemic). Furthermore, before 2019, there was no requirement for property tax information in Texas to be clear at all.

As the voice of Texas real estate, Texas Realtors advocated for this to change.

In 2019, Realtors across the state worked tirelessly with our state leaders and led the charge to pass Senate Bill 2, also known as the Texas Property Tax Reform and Transparency Act of 2019. This was a huge win for private property owners, but then the work to tell Texas homeowners about the changes began. That is why we created the “You Deserve to Know: Property Tax 101” campaign dedicated to educating Texans about critical property tax changes.

The Texas real estate market has had a decade of record home sales, increasing home prices and incredible demand. And it is now more important than ever for Texas Realtors to inform our clients on how to make their voices heard.

To help all Texans understand their property taxes, Texas Realtors created the website knowyourtaxes.org to serve as a complete resource on local property taxes across the state. Here are the top four things all Realtors need to share with buyers and sellers to keep them informed.

Why is This Important?

One of a homeowner’s largest annual expenses may be their property tax bill. Although most homeowners probably have a strong idea of what their property taxes are used for, it is good practice to remind them and show them how they have a voice in this annual process. It can also give them more context as to why the recent legislative changes matter so much.

Explaining how the central appraisal district (CAD) determines the value of a property within its county, as well as where that money goes each year, is relevant.

It’s also helpful to share how clients can calculate their property tax bill. It is based on only two numbers: the appraised value of the home and the tax rates set by local elected officials.

Data at Their Fingertips

One of the big changes the state has made to address transparency is to increase access to information. Each Texas county’s CAD is now required to create a website containing information about the property tax rates, the proposed rate changes for the year and how to calculate a property tax bill — all in one place.

Since CADs determine the taxable value of every property within the county, they are the ones responsible for creating and updating these websites. For example, Harris County CAD’s Truth-in-Taxation website is located here.

Clients statewide can use the Find Your Local Info tool on knowyourtaxes.org to easily find their specific county’s website.

Making Their Voices Heard

All Texans need to know their voice has an impact on how their local property taxes are set each year. The new laws increase transparency by including a way to conveniently share feedback with local elected officials with just a few clicks.

Just visit knowyourtaxes.org, use the Find Your Local Info tool to locate your CAD’s website, and click through to visit your county’s truth-in-taxation website to submit your comments.

Homestead Exemptions

One way that homeowners in Texas can save on their property taxes is by applying for exemptions through their county’s CAD to lower their home’s taxable value. This simple, free process goes a long way in potentially saving money, which clients will always appreciate.

The CAD locator at knowyourtaxes.org is a direct way for your clients across the state to find information about homestead exemptions available to them.

Final Thoughts and Additional Resources

Texas Realtors are an essential resource for all things real estate, and we asked our members to do heavy lifting back in 2019 to get our voices heard through the passage of property tax reform legislation. Across the state, Realtors advocated for these changes to help consumers better understand the property tax process and the role they play.

For even more information on the property tax changes, you and your clients can read this summary on NAR’s REALTOR® Party website.

The responsibility is still on us as a trusted source of real estate information to make sure private property owners in Texas are informed about their property taxes and that they have an important voice in the process.

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