Property taxes in Harris County

[Brian Burke]

In researching property taxes for properties to buy, I’ve noticed the combined assessed rates can be over 3% in some cases, particularly in desireable school districts. When reviewing the tax bills I’ve seen that the assessed value can be subject to a number of exemptions reducing the assessed value and therefore the tax. It appears most or all of these would not apply to most investors (e.g. homestead exemptions, exemptions for owners over 65, etc.). 

When underwriting a potential single family investment in Harris County, should I assume the purchase price will be the assessed value subject to tie applicable tax rate?

[Nick S.]

Yes, I always assume that the purchase price (or the ARV if you are making significant repairs) will be the assessed value. Even if they don't update it the first year, it'll catch up.

And you’re correct, the exemptions apply to owner occupants of the property, not to investors.