Investor · Trabuco Canyon, CA · Member since 2015 · 40 posts · 35 votes
Hey Bigger Pockets!!
Looking at purchasing a turnkey property in Rowlett Texas and I was wondering how best to estimate property taxes from my analysis.
Example: If the historical assessed price of the property is $100K and the purchase price is $150K would should I use as the post purchase assessment value?
I guess as a worst case scenario I can use the tax percentage from the county records and multiply that against the purchase price...but I'm being told that is not how it works in Texas.
No need to guess in Texas. You can go to the Rockwall County Appraisal District site and look up the appraised value and estimated property taxes for this year and in past years
Property taxes are based on the appraised value as of Jan 1st and will not change at least for this year based on your purchase. For next year, since Texas is a non-disclosure state, the appraisal district may or may not know what you pay for the property
Keep in mind in Texas your tax appraised value has ZERO to do with what your property is actually worth. The higher the appraisal means the more you pay in property taxes. I have bought properties for $100,000 that were accessed at $50,000 and bought properties for $50,000 that were accessed for $100,000 and both were great deals
In Texas, the county typically looks at sales from the last 6 months in the same neighborhood or within a 1-2 mile radius of the home. For example, the 2015 assessed value is based on sales from July 2014-Dec 31, 2014.
The worse case scenario is the purchase price because if it is assessed for more, you can use your contract in 2016 tax protest.
To be conservative I think 80% of purchase price is reasonable. As a bank on the commercial side, we typically use 75-80% of purchase price because if we foreclose on the property we at least have taxes assessed at our new basis (ie. loan amount).
Tax assessments & bills are public record and searchable online. Google "TOWN, TX TAX COLLECTOR" or perhaps its done by county in texas. You can look up assessment, and usually find recent tax bills (though not always). Multiply the ASSESSMENT (not the appraisal) by the tax rate and those are your property taxes. Every municipality has a different set of rules for reassessment. I quick search online and I found that Texas does reassessments annually on Jan 1. So if you purchased the property, that sale price will be factored into the assessor's appraisal, but it is not solely based on sale price. If it were, people would pay minimal amounts on paper and deliver the balance in cash to avoid the taxes.
No need to guess in Texas. You can go to the Rockwall County Appraisal District site and look up the appraised value and estimated property taxes for this year and in past years
Property taxes are based on the appraised value as of Jan 1st and will not change at least for this year based on your purchase. For next year, since Texas is a non-disclosure state, the appraisal district may or may not know what you pay for the property
Keep in mind in Texas your tax appraised value has ZERO to do with what your property is actually worth. The higher the appraisal means the more you pay in property taxes. I have bought properties for $100,000 that were accessed at $50,000 and bought properties for $50,000 that were accessed for $100,000 and both were great deals