Property Taxes and Your Monthly Payment
Property taxes are on the
rise and this will effect your monthly mortgage payment. In a 30 year fixed
mortgage you’re your mortgage payment is fixed and will not change
but if you escrow your taxes and insurance your overall monthly payment can
go up. The increase is due to an increase in either taxes and insurance, or
both.
Property taxes
are local taxes. Local officials value your property, set your tax
rates, and collect your taxes. However, Texas law governs how the process
works.
In Harris County, property
taxes are based on tax rates set by the various local governments (taxing
units) that levy a tax and on the value of the property. The valuation or
appraisal process, which is performed by the Harris County Appraisal District,
serves to allocate the tax burden among property owners.
Property taxes help pay for
public schools, city streets, county roads, police, fire protection, and many
other services.
There
are three main parts to the property tax system in Texas:
· An appraisal district in each county sets
the value of taxable property each year.
· An appraisal review board (ARB) settles any
disagreements between you and the appraisal district about the value of your
property.
· Local taxing units, including the county,
cities, school districts, and special districts, decide how much money they
will spend each year. This in turn determines the tax rate they need to set and
the total amount of taxes that you and your neighbors will
pay.
The
system has four stages: valuing the taxable property, protesting the values,
adopting the tax rates, and collecting the taxes.
January
1 marks the beginning of property appraisal. What a property is used for on
January 1, market conditions at that time, and who owns the property on that
date determine whether the property is taxed, its value, qualifications for
exemptions, and who is responsible for paying the tax.
Between
January 1 and April 30, the appraisal district processes applications for tax
exemptions, agricultural and timber appraisals, and other tax relief. Around
May 15, the appraisal review board begins hearing protests from property owners
who believe their property values are incorrect, or who feel they were
improperly denied an exemption or agricultural/timber appraisal. The ARB is an
independent panel of citizens responsible for handling protests about the
appraisal district's work. When the ARB finishes its work, the chief appraiser
gives each taxing unit a list of taxable property known as the appraisal roll.
Usually
in September or October, the elected officials of each taxing unit adopt tax
rates for their operations and debt payments. Typically, several taxing units
tax each property. For example, both the county and a school district tax every
property in Harris County. Taxes may also be payable to a city or special
district, including such entities as municipal utility districts, rural fire
protection districts, junior college districts, and others.
Tax
collection starts in October and November as tax bills go out. Taxpayers have
until January 31 of the following year to pay their taxes. On February 1,
penalty and interest charges begin accumulating on most unpaid tax bills.
Taxing units may start legal action to collect unpaid property taxes once they
become delinquent.
· You have the right to equal and uniform tax appraisals. Your
property value should be the same as that placed on other properties that are
similar or comparable to yours.
· Unless your property qualifies for special appraisal, such
as for agricultural land, you have the right to have it taxed on its January 1
market value.
· You have the right to receive all tax exemptions or other
tax relief for which you apply and qualify.
· You have the right to notices of changes in your property
value or in your exemptions.
· You have the right to know about a taxing unit's proposed
tax rate increase and to have time to comment on it.
Understand
Your Remedies:
· If you believe your property has been appraised for more
than its January 1 market value, or if you were denied an exemption or agricultural
appraisal, you may protest to the appraisal review board. If you don't agree
with the review board, you may take your case to court.
· You may speak out at public hearings when your elected
officials are deciding how to spend your taxes and setting the tax rate.
· You and your fellow taxpayers may limit major tax increases
in an election to roll back or limit the tax rate.
Fulfill
Your Responsibilities:
· You must apply for exemptions, agricultural appraisal, and
other forms of tax relief before the deadlines.
· You must see that your property is listed correctly in the
appraisal records. If your property is omitted from the records and escapes
taxation, it becomes subject to a back assessment. In the event a back
assessment occurs, it may cover up to five prior years in the case of real
property (land and improvements), and up to two prior years for business
personal property.
· If you own tangible personal property used for the
production of income (business personal property), you must annually render it
to the chief appraiser. Personal property, which escapes taxation because of
failure to render, becomes subject to back assessment when discovered by the
appraisal district.
· You must pay your taxes on time.
There is no right or wrong way to dispute your
value. There is no set winning formula. It’s simply best to do your homework
and present your best case. You can dispute your value yourself or hire an
agent.
DOING
IT YOURSELF
Make friends with the HCAD
After
you file your tax protest and receive an informal hearing date, the website
will show you what properties their computerized models are using to
compare to yours.
It will give a list of comparable properties with basic information about them.
You can search those properties for more information.
You
may want to actually see those properties in person and
photograph the outside to distinguish them from your property. Make a
list of the differences. You will need this information for your informal
hearing.
The day on your hearing, you show up at the HCAD building and wait for
your name to be called. An appraiser will consult with you.
Be
prepared. Bring all the documentation that supports your view of the market
value of your home. Lots of quality pictures of defects with your
home that adversely affect market value are crucial.
Don’t
assume that the information they have on your home is correct. Review it in
details. I have seen issues with square footage and improvements.
The
ARB or appraisal review board panel is comprised of three citizens not
employed by HCAD to hear your case. There
is also an HCAD employee who represents HCAD that argues against your point
view.
Bring
copies of your documents. Make sure to have enough for all board members. Be
profession and use visual pictures when possible. Being prepared is a sign of respect for the
board’s time.
Comparables
are key. Focus your time on proving that the comparables used are not accurate.
If you give specifics of why those comparables are inaccurate and perhaps show
better ones, it is hard for an HCAD employee who just picked up the file to
refute you. If you need help with this please feel free to contact me
(ali.palacios@todayshomerealty.com)
They
consider the information, and you get a final determination from them at the
end of the hearing.
The
appraisers at a review board have a lot of control over your assessed value. You
want to be politely and logically. State your position in a friendly way. There
is no point in complaining about the amount you pay in taxes. They don’t care.
They are there exclusively to establish value. They have no control over tax
rates.
Be
the nice, logical, professional person they feel good about helping.
Talking
to your neighbors can sometimes give you a sense of what works and doesn’t work
in doing their property tax protest.
APPOINTING
AN AGENT
You
may appoint a representative, commonly called an "agent" to handle
specific duties. You don't need an agent to file for exemptions, such as disabled
veterans, homestead and/or religious organizations; just get an application
form from the appraisal district.
To
appoint an agent, you must give that person written authorization to represent
you. You can google Property
tax consulting services for a list of companies. Most will not charge you
for their services unless they are able to lower your taxes. They will also provide you with the needed paperwork.
SOME IMPORTANT DATES:
January 1
Date that
determines taxable and homestead exemption status.
April 15
Last day
for property owners to file renditions or request an extension.
April 30
- Deadline to make application for many types of total
exemptions. Homestead and disabled veteran exemptions may be applied for
up to one year after the taxes for the year of application become
delinquent (usually February 1). Over-65 or disability homestead
applications may be filed as soon as the applicant becomes 65 or meets the
Social Security requirements for total disability, whichever is
applicable.
- Deadline for filing written protests to the Appraisal
Review Board for residence homesteads; however, protests may be filed
without penalty within 30 days of the date a notice of appraised value is
mailed to the property owner or until the earlier of May 31 or the date
the appraisal review board approves appraisal records.
May 31
- Last day to apply for agricultural, timber, or wildlife
productivity appraisal without penalty.
- Deadline for filing written protests to the Appraisal
Review Board (or by the 30th day after a notice of appraised value is
mailed to the property owner, whichever is later). Late protests filed after
the deadline require a determination by the review board that good cause,
such as serious illness, exists for the late filing.
Oct 1-31
Tax bills
are usually mailed during this month.
Jan 31 or following year
Last day
to pay property taxes without penalty and interest.
Source:
http://www.hcad.org/Help/Process/Guide.asp
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