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How Is My Property Value Determined in Texas?

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When your county determines the amount of property taxes each property owner will be paying, they use the set tax rate and the property value ascertained by the county appraisal district. Here we will be looking into how property is appraised in Texas and the three commonly used methods when valuing a property. We will also review what you can do to evaluate if your property was valued correctly and how this can affect your property tax bill.

How Property is Valued?

Each county appraisal district in Texas is required to determine the value of properties within their district at least once every three years. The same methods and techniques must be used for appraising the same or similar properties. Any mass appraisals performed must conform with the Uniform Standards of Professional Appraisal Practice to ensure equal treatment of all properties.

The appraisal district will compile a taxable property list that includes a description of the property and the registered owner’s name and address. For mass appraisals, your property can be classified based on factors such as size, construction type, and usage. Data will be taken from recent property sales and used to determine the property’s market value while accounting for differences in age, location, and individual characteristics.

There are three standard methods that the appraisal district can use when valuing property:

1. Market Approach

This method is based on sales prices of similar properties and compares the properties to those recently sold. This method can also be called a comparative market analysis (CMA), which evaluates the house based on similar homes sold within the same area.

2. Income Approach

This method is based on income and expense data and calculates the present worth of any future benefits. It attempts to determine what an investor would currently pay for a future revenue stream they might get from the property.

3. Cost Approach

The final method that is frequently used will estimate how much it will cost to replace the building on the property with one of comparable usage.

When the appraisal district has completed the appraisals, it will send you a notice of the appraised value that lists information about your property’s current value and its preceding year’s value.

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How do I know if my property is valued correctly?

While an increase in property value is often welcome, it may come with a less desired increase in property tax. You should make sure your property is not overvalued. Your property’s fair market value (FMV) should be what you would expect to get in a sale for your property in its current condition within a reasonable amount of time - real estate agents often use a 30 - 90 day window for this purpose.

If you, as the seller, are unsure about the accuracy of your appraised property value, here are some steps you can take to help you determine if you want to protest the appraisal:

Compare the asking price of properties comparable to yours in current real estate listings. Speak to a real estate agent who will have access to information about properties that have been recently sold and their sale price.

If you feel your property has been valued incorrectly, you have a right as a taxpayer to protest to the Appraisal Review Board.

Property Taxes

Your property value is used to calculate how much property tax you will owe each year. Whether you are paying through an escrow account through your mortgage lender or paying it directly yourself, you or your lender may have underestimated the amount of tax owing. If you find yourself requiring more funds to cover your taxes, consider using a property tax loan so you can avoid the high interest rates and penalties your county can impose.

American Finance & Investment Co., Inc. (AFIC) offers our clients an affordable, hassle-free way to ensure that your account with the local government tax office is paid in full and will work out a manageable repayment plan for you. AFIC can provide you with an instant quote by completing the form on our homepage. For qualifying properties, we can help you pay off your delinquent taxes and offer you the following benefits:

  • Quick and completely online process
  • No money down
  • No credit check
  • Free 30-day rate match
  • Match competitors and beat their rate by 1%
  • Avoid high penalties and foreclosure

We pride ourselves on finding solutions to suit the unique needs of our clients. If you would like to discuss our property tax loans, please contact our experienced team at AFIC today.


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