Texas property tax question

5 Replies

Hi all, 

I am a newbie here working on 2.3m deal in Houston. The listing is completely off market and seller financing. 

The current property appraised value is 1.1 m and I am buying it for 2m because of great cash flow. Last year tax is about 30k. 

My questions is after the transaction, would my county tax appraised value change to 2m and my tax would be like 45k?

@Thawda Aung . you should anticipate your property taxes to rise - by how much is totally Unknown. Properties in Texas are re-valued for Tax Purposes every year (effective January 1). 

That doesn't mean the new taxes are published and available on January 1. The January 1 date is the Date of record. 

The Appraisal District looks at the previous year's data from various sources, and establishes what it considers to be the TAXABLE Market Value for every property. What data the Appraisal District uses to establish the taxable value is not widely known. 

As you may know Texas is a Non-Disclosure State, so the amount you pay for a property is NOT recorded in the deed records. In the past appraisal districts did not have access to MLS data for residential sales, but think that may have changed. My experience in residential sales is the district had much of the MLS data - how they acquired - I don't know!

Since you are buying a Commercial Property, there will most likely NOT be a record of what you paid for the property. The Appraisal District will publish (March - April time frame) what in their estimation is the taxable Value for 2018. If you don't agree with this value, you will be able to Protest the Value at a hearing, initially with a Staff Appraiser, and if You & the Staff Appraiser cannot agree on a Value, you can Appeal to a Hearing Board. On may occasions, complex Commercial Properties end up in court to settle the Tax Value question.

Go to the Harris County Tax Appraisal District for more details: 

http://www.hctax.net/Property/PropertyFAQ

512-633-3853

@Jim Cummings   Thank you so much for your detailed reply. 

Now, I am crossing my finger and we will just have to wait and see. 

@Thawda Aung . Further complicating your question is after the Appraisal District sets the Taxable Value in May - June time frame, then the politicians get into to set the Tax Rates. They set the Rate of Tax depending upon how much they want to / need to spend based on the budgets for the various agencies they support, and what they the public will support without voting them out of office. What the politicians really love is Increasing taxable values, that allow them to collect more taxes without increasing the rate, and even better collecting more taxes at a lower rate. With that, the politicians can claim, "we've lowered your taxes" while taking the same or more money out of your pocket.    

512-633-3853

@Thawda Aung

did the property assess for 1.1 M from the county assessor or a professional appraisal?

If a professional appraisal appraised it at 1.1M and you are paying 2.3M - you should get another opinion or walk away from the deal. 

I would also be concerned if the properties were damaged by the floods.

Basit Siddiqi, CPA
917-280-8544

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