Property tax sticker shock? Appraisals have been mailed out

7 Replies | Fort Worth, Texas

“It is very early to say at this point, but I estimate overall values for Tarrant county to be up 7-10 percent,” Law said via email. “While some individual property values may have substantially larger percentage increases, others may see lower increases.”

This was from an article posted in the Fort Worth Star Telegram.....

How many of you saw unreal increases?   I saw an increase of 10% from this time last year, just below what I consider to be the market value of my house (might even be a little higher than market value).    For those who don't know, the Texas Association of Realtors have made an effort this year to lobby the Texas Legislature for some property tax relief.   We feel strongly the consistent annually increases is making real estate unattractive in Texas.   It is time to put it to a stop.   

I know many of the investors out of state who approach me are shocked when they see the taxes.  Many of them end up bowing out of the market because the high taxes makes cash flow very difficult.   

Would love to hear from others who have had this same experience.   

The appraisal districts have gone nuts.  It seems reality does not make any difference to them anymore.  I would sell my house to them for the amount they appraised it for.  Let's see them try to sell it at that price.

its kind of been that way for years..  I think you need to live there to average your tax's with no state income tax.

out of area folks who were counting on positive cash flow sometimes find them selves with either no cash flow or very little or negative..

@Adam Wright

Appraisals are a product of data analysis based on SOLD Comparables. As REALTORS we use Comparables everday to determine what we think a property will sell for. If the Tax Appraisal comes in High, we at least have the option of meeting with the Appraisal District and challenging them on their estimate of value.  

The real problem, in my opinion, is the Politicians who set the Tax Rates.  YES - we can go to the city and county meetings and state our piece, but regardless, you have very little influence on the decisions being made. 

Uncertainty of tax expense has been an issue in Texas RE for years.  Tax rates mean little, it’s your assessment that matters. 

The State has been lobbied hard for years and they’ve only taken action to protect home owners, not investors.  I doubt that’ll change much.

Ways to lower the shock:

When buying, Always pro forma your tax expense using an assessed value at least 90% of sales price.  If it’s not there now, it will be soon. 

Multi property investors should hire a Tax agent to protest each year.  They usually take a contingent % of the tax savings so no cost up front.

I’ve always had better luck arguing the equal and uniform case vs. the value is too high.

If you really want to imagine a scary scenario, how do you think schools, cities and counties will react if their budgets get cut 30-40% in a 2-3 year RE downturn?  Yikes!

No, annual assessment is not a healthy and sustainable practice, but apparently neither is Prop 13, judging from CAs budget woes.

I see the greatest disparity in value to assessment in large commercial properties that are harder and more costly to assess.  They should start there.

Where I live just because you assessment value increases, doesn't mean your property taxes will.  how much your taxes increases depends on the mill rate and how much money your city needs.  If your property assessment increase was more than average, yes you may see an increase in your property taxes.  Eg. if everyone's property assessments went up 10%, then  you are unlikely to see a 10% increase.  On the other hand if yours increased 15% while everyone else's went up 10%, you will likely see an increase...but not a 5% increase.