MOre about Property Taxes
Additional Information
1. You pay your property taxes to the local tax collector.
2. The tax collector distributes funds to schools, cities and other local governments.
3. Local governments spend funds on: Schools, Roads, Hospitals, Fire Departments, & Other Programs
The Texas local property tax is just that — a local tax, assessed locally, collected locally and used locally. More than 3,700 local governments in Texas — school districts, cities, counties and various special districts collect and spend these taxes.
Several types of local governments may tax your property. Texas counties and local school districts tax all nonexempt property within their jurisdictions. You also may pay property taxes to a city and to special districts such as hospital, junior college or water districts.
Most, but not all, local governments contract with their county’s tax assessor-collector to collect the taxes on their behalf. The Comptroller of the State of Texas conducts an annual property value study for each school district in the state, to measure whether their appraisal districts are appraising property at market value and thus ensuring appropriate school funding. The Comptroller’s study, however, does not directly affect local values or tax collections.
Where Does the Money Go?
The local property tax is the largest single funding source for community services. State government receives no benefit from these local taxes. Your local property taxes help to pay for your public schools, city streets, county roads, police departments, fire protection and many other vital programs. In Travis County property taxes support 127 local government agencies including 21 cities, 16 emergency districts, the county, the hospital district, the junior college, 54 municipal utility districts, 1 road district, 15 school districts, and 17 water control improvement districts.
texas has NO STATE INCOME TAX but it does have property tax
Property Taxes in Texas
What are the property taxes like in Texas?
Texas Gov. Greg Abbott signed extensive tax reform changes into law in June, meaning that homeowners across the state will be seeing changes to their bills, which will hopefully slow property tax growth in the future.
However, those changes won’t be reflected immediately, according to a local real estate attorney. And it’s unclear how much each individual’s tax bill will change.
Properties are assessed annually, and levies are charged on 100% of market value. Homeowners in Travis County, of which Austin is the largest city, pay taxes to the city of Austin and Travis County, plus the local school district.
For someone who lives in the city of Austin, that combined rate was about 2.25%
In recent years, property values have risen, meaning many homeowners have seen bills increase even if rates have stayed the same or declined.
In 2018, homeowners paid an average of $7,459 per year, according to ATTOM Data Solutions, a California-based data company. The school district charged a flat rate of about 1.19% in 2018 for maintenance and operations and bonded indebtedness, and the city and county were allowed to raise the tax rates up to 8% without voter input. If the rate increased more than 8%, voters could petition for a reduction, but this is a very rare occurrence.
Starting in 2020, the city and the county are limited in how much they can raise taxes. The revenue collected by each entity will only be allowed to rise by no more than 3.5% each year. Voters have to approve any increase of over that amount.
In addition, for 2019, all school districts are required to reduce their rates by 7 cents, and in 2020 tax revenue statewide may increase by no more than 2.5%. That would put the total tax bill in 2019 at about 2.18% of the market value of a home.
However, since the new city and county tax rules don’t go into effect until 2020—meaning it won’t appear in tax bills until 2021—the city of Austin and Travis County are expected to raise rates 8% in October.. That will impact the 2020 tax bill, but in 2019, that means homeowners will be paying about the same amount in property taxes.
This year’s tax reform will have “different effects on individual properties,".
Going forward, we should expect no more than a 3.5% annual increase in both county and city taxes, and a 2.5% yearly increase in school taxes, as compared to a more than 5.5% increase for each unit historically.
Property Tax Exemptions
Homestead Exemptions
A homestead exemption is a legal provision that can help you pay less taxes on your home. If you own and occupy your home as of January 1st of the year, you may be eligible for the general residential homestead exemption. Exemptions are also available for disabled veterans, seniors over the age of 65, people with qualifying disabilities, and some surviving spouses.
Exemptions available include:
General Residence Homestead Exemption
Person Age 65 or Older (or Surviving Spouse) Exemption
Disabled Person (or Surviving Spouse) Exemption
100 Percent Disabled Veteran (or Surviving Spouse) Exemption
Disabled Veteran or Survivor Exemption
Donated Residence of Partially Disabled Veteran (or Surviving Spouse) Exemption
Surviving Spouse of an Armed Services Member Killed in Action Exemption
Surviving Spouse of a First Responder Killed in the Line of Duty Exemption
General Residence Homestead Exemption
A general residential homestead exemption is available to taxpayers who own and reside at a property as of January 1st of the year. To apply for this exemption, taxpayers must submit a completed application along with a driver’s license or state-issued personal ID certificate that has the same address as the property they are applying for the exemption on.
Person Age 65 or Older (or Surviving Spouse) Exemption
An over 65 exemption is available to property owners the year they become 65 years old. By state law, this exemption is $25,000 for school districts. Other taxing units may adopt this exemption and determine its amount. This exemption also limits the amount of school taxes you will pay every year to the amount you paid the first or second year you qualified (whichever is lower). This limitation is known as a tax ceiling or tax freeze. So, if you turn 65 this year and qualify for this exemption, your school taxes will not increase above the tax ceiling as long as you do not add any improvements such as a garage or pool to your home. If you do add improvements to your home, the tax ceiling can increase. Tax ceilings are mandatory for school districts, however a county, city, or junior college may also limit taxes for individuals with this exemption if the governing bodyadopts a tax ceiling. Click here for a list of tax entities and the exemptions they have adopted.
If you are an over 65 homeowner and purchase or move into a different home in Texas, you may also transfer the same percentage of tax paid to a new qualified homestead. This is known as a ceiling transfer (Request to Cancel/Port Exemptions). It is possible to transfer your tax ceiling for county, city, or junior college taxes if they have adopted a tax ceiling and you move to another home within the same taxing unit.
If a homeowner claiming this exemption passes away and their spouse is 55 or older and continues to own the home, the spouse can continue to hold the exemptions and tax ceiling on the property.
To apply for this exemption, individuals must submit an application and proof of age. Acceptable proof includes a copy of the front side of your Texas driver's license or Texas identification card. Surviving spouses must provide proof of age of the survivor and proof of death of the deceased spouse.
Disabled Person (or Surviving Spouse) Exemption
Any person who meets the Social Security Administration’s standards for disability may be eligible for a special homestead exemption, even if they are not receiving disability benefits. This means that a person has a medically determinable physical or mental impairment that prevents them from engaging in any substantial gainful activity and the impairment is expected to last for at least 12 months or result in death. A person who receives disability benefits under the Federal Old Age, Survivors and Disability Insurance Program could qualify.
Similar to the exemption available for people over 65, an exemption for a person with disabilities provides for a tax ceiling for school taxes. If you receive this exemption and purchase or move into a different home in Texas, you may also transfer the same percentage of tax paid to a new qualified homestead. This is known as a ceiling transfer (Request to Cancel/Port Exemptions). It is possible to transfer your tax ceiling for county, city, or junior college taxes if they have adopted a tax ceiling and you move to another home within the same taxing unit.
If a homeowner claiming this exemption passes away and their spouse is 55 or older and continues to own the home, the spouse can continue to hold the exemptions and tax ceiling on the property.
To apply, you must submit an application and include documentation of your disability. Documents can include a current copy of your disability determination issued by the Social Security Administration or a statement from your physician verifying your permanent disability. Your physician may use the Physician's Statement Form available through TCAD. If submitting a Physician's Statement, an applicant must also provide a copy of a recently filed federal income tax return and corresponding W2s.
100 Percent Disabled Veteran (or Surviving Spouse) Exemption
A disabled veteran who receives 100% disability compensation due to a service connected disability and a rating of 100% disabled or of individual unemployability from the Department of Veterans Affairs can receive an exemption from taxation of the total appraised value of the veteran’s qualifying residence homestead. To apply, individuals must submit an application and current documentation from the Department of Veterans Affairs.
Surviving spouses of veterans who qualified for the 100% Disabled Veteran Exemption or who would have qualified for it at the time of their death are eligible if the surviving spouse has not remarried, the property was the surviving spouse’s residence homestead at the time of the veteran’s death, and the property remains the surviving spouse’s qualifying residence homestead. To apply, individuals must submit an application and supporting documentation.
Disabled Veteran or Survivor Exemption
Texas law provides partial exemptions for property owned by veterans who are disabled. The exemption amount is determined by the percentage of service-connected disability. To qualify, you must be a veteran, a Texas resident, and be classified as disabled with a service connected disability of 10% or more by your service branch or the Veterans Administration. The amount of the exemption may vary from $5,000 to $12,000 depending on documentation from the VA. A disabled veteran who is 65 years of age or older, is blind in one or both eyes, or has lost the use of one or both limbs, may qualify for the maximum exemption of $12,000 regardless of the disability percentage awarded by the Veterans Administration. To apply, individuals must submit an application and documentation from the Department of Veterans Affairs indicating the percent of disability awarded.
A surviving spouse may qualify for this exemption if they are a Texas resident and have not remarried.
Donated Residence of Partially Disabled Veteran (or Surviving Spouse)
Texas law provides partial exemptions for property owned by veterans who are disabled and who own and occupy homes that have been donated by a charitable organization. The exemption amount is determined by the percentage of service-connected disability. To qualify, you must be a veteran, a Texas resident, and be classified as disabled with a service connected disability of 10% or more by your service branch or the Veterans Administration. To apply, individuals must submit an application and documentation from the Department of Veterans Affairs indicating the percent of disability awarded.
A surviving spouse may qualify for this exemption if they are a Texas resident and have not remarried.
Surviving Spouse of an Armed Services Member Killed in Action Exemption
The surviving spouse of a member of the U.S. armed services who is killed in action is allowed a 100% property tax exemption on a residence homestead if they have not remarried. To apply, individuals must submit an application, a Report of Casualty, and a copy of your marriage license.
Surviving Spouse of a First Responder Killed in the Line of Duty Exemption
The surviving spouse of a first responder killed in the line of duty is eligible for a 100% property tax exemption on a residence homestead if they have not remarried. To apply, individuals must submit an application, documentation that the spouse was killed in the line of duty, and a copy of your marriage license.
