Property Taxes in Texas

4 Replies

Hi,

I'm starting to invest in SFR properties in TX and I'm hoping someone can clarify whether there are any property tax caps from year to year? I heard from various sources that investment properties are re-assessed every 2-3 years so there aren't any property tax advantages to holding a property for a long time since my tax basis will always be at market value. However online I see that the tax increase is limited to 3.5% per year and will be put to a vote if taxes are to surpass that. Is that true for investment property as well? I'm an out-of-state investor and any info would be much appreciated!

Thank you in advance for your help!

@Vierra Wong By way of clarification on property taxes in Texas the property values are reassessed every year. This is done by the county Appraisal District in which the property is located. Each year the "assessed" property value may or may not go up each year. There are several factors at play as to why. But its run by a local government entity. Therefore, I tell my clients plan on having property taxes go up each year. I also instruct them to protest the assessed values every year on all their properties whether or not the receive an increase. Keep in mind as investors we receive no tax exemptions whatsoever. There is also no caps on tax increases each year either. Only those who are owner occupants that apply for a homestead exemption are able to have a cap on their tax increases each year. But this cap is at 10% per annum and not 3.5% as you read online. But if you want to read more info I recommend you go to the Texas Comptroller web site. This is official and definitive info : https://comptroller.texas.gov/...

+1  To Joe's comment on  the 10% a year cap if you reside on the property.   But just like every business out there, the government likes money.  They like YOUR money.  So it's worth the time and effort to protest your taxes if you happen to buy an investment in Texas.    Just be sure to run your numbers to include a likely hike in taxes over the next 2-3 years because it's very possible these high RE prices are here to stay.