As a homeowner in a Texas municipality, you may not even know exactly how your property taxes are calculated. It is vital to your financial well-being that you can make a fair estimate of what you will owe on your property in a given year. If you don’t know how to estimate property tax, read through this guide, which will give you an idea of how these taxes are calculated. You can use this knowledge to forecast your own expenses and budget accordingly.
Property taxes are appraised annually by county appraisal districts. Each appraisal district must determine the property’s current market value in the county and then base the tax rates on these values. The appraisal values determined by the county officials can be disputed informally or formally via appraisal review boards. Once the rates are fixed, however, tax bills are sent out by October 1, and payment is due by January 31.
How are the rates calculated, then? Texas county appraisal districts levy taxes as a percentage of each home’s appraised value. That percentage differs from county to county, so in order to estimate what your tax bill will be, you need to know what the rate is in your particular district. The rates are generally anywhere between 0.5% and 3.25%. For example, if your home is valued at $100,000 and your district levies a tax rate of 1.8%, you will owe $1,800 in taxes in a given year. As long as you know the value of your home and the latest applicable tax rate, you should not have any trouble calculating your tax bill.
You may also be eligible for certain exemptions, such as the homestead exemption or senior exemption. The homestead exemption knocks $25,000 or more off the taxable value of your home, while the senior exemption (for homeowners over the age of 65) reduces the taxable value by $10,000 and freezes the taxable value going forward. First, find out if either or both of these apply to you, then subtract the applicable amount from your appraised value to arrive at the taxable value. You can then calculate your tax bill by applying the tax rate to the remaining taxable amount. It is important to note that not all taxing jurisdictions provide the same exemption deductions. So the taxable amount to which the tax rate is applied for the school district may differ from the taxable amount for the county itself, the community college district, or any of the other jurisdictions.
Where it gets complicated is when your account falls into arrears. Penalties and interest pile up quickly, and you will soon find the original tax bill increasing rapidly. At this point, if you don’t make payment soon, the situation will only get worse. On February 1, if you have not paid your taxes, your bill will immediately increase by 7%. Then, an additional 2% will be added each month until June. Then in July, besides another 3% increase, most counties apply a 20% collection charge of the total outstanding bill. In August, and going forward, the bill will generally increase by 1.2% per month, leading to a whopping 47.6% of fees in the first year alone! At this point, the outstanding amount can become very difficult to address. You either need to make payment immediately or talk to a property tax lender to help you.
American Finance & Investment Co., Inc. (AFIC) offers our clients an affordable, hassle-free way to manage their Texas property taxes. We can 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:
We pride ourselves on finding solutions to suit the unique needs of our clients. If you would like to discuss our property tax loans and need help answering questions on how to estimate property tax, please contact our experienced team at AFIC today.
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YOUR TAX OFFICE MAY OFFER DELINQUENT TAX INSTALLMENT PLANS THAT MAY BE LESS COSTLY TO YOU. YOU CAN REQUEST INFORMATION ABOUT THE AVAILABILITY OF THESE PLANS FROM THE TAX OFFICE.
If you are over 64 or disabled, don’t get a property tax loan, contact your tax office about a deferral.
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