Wilco Property Tax Notices of Appraised Value Now Available (real estate market, renters)

[riaelise]

Yknow, I have to admit I still don't really understand how it all works here.

Our appraised value went down by around 150k, which reflects the "back to the earth" scenario these days. Yet somehow our appraised value went UP by 60k, which if I understand correctly, our taxes may also go up How is it that a downmarket doesn't result in a lower appraised value, and thereby a tax savings? How is it that when our home was valued at a million dollars last year, our taxes were lower than in years past, but this year they'll probably go up? What gives?

[Austin97]

Originally Posted by riaelise

Yknow, I have to admit I still don't really understand how it all works here.

Our appraised value went down by around 150k, which reflects the "back to the earth" scenario these days. Yet somehow our appraised value went UP by 60k, which if I understand correctly, our taxes may also go up How is it that a downmarket doesn't result in a lower appraised value, and thereby a tax savings? How is it that when our home was valued at a million dollars last year, our taxes were lower than in years past, but this year they'll probably go up? What gives?

Year one appraised value 1M net appraised 1M
Year two appraised value 2M net appraised 1.1M (10% cap)
Year three appraise value 1.9M net appraised 1.21M (10% cap)

Your tax is based on your net appraised value which is capped.

[blameyourself]

Originally Posted by riaelise

Yknow, I have to admit I still don't really understand how it all works here.

Our appraised value went down by around 150k, which reflects the "back to the earth" scenario these days. Yet somehow our appraised value went UP by 60k, which if I understand correctly, our taxes may also go up How is it that a downmarket doesn't result in a lower appraised value, and thereby a tax savings? How is it that when our home was valued at a million dollars last year, our taxes were lower than in years past, but this year they'll probably go up? What gives?

I'm a little surprised your taxes were lower last year.

Since it's unlikely that your home value is going to drop significantly over the next 5 to 10 years, I would just expect to pay a 10% increase on property tax per year since you're not close to getting the 65 and over exemption or any of the school exemptions. There's going to be some catching up to do for everyone (and some are going to be priced out of their homes...a common complaint on my neighborhood app)

[Trainwreck20]

Are you meaning to say your appraised value went down but 'net' appraised went up? That can happen due to homestead exemption. But not sure that is what you are saying.

For what it is worth, our 'net' appraised (formerly referred to as 'assessed'', I think) value went up 10% last year but taxes bill went down due to lower tax rates reflecting the overall increase in value of the tax base....

[blameyourself]

Originally Posted by Trainwreck20

Are you meaning to say your appraised value went down but 'net' appraised went up? That can happen due to homestead exemption. But not sure that is what you are saying.

For what it is worth, our 'net' appraised (formerly referred to as 'assessed'', I think) value went up 10% last year but taxes bill went down due to lower tax rates reflecting the overall increase in value of the tax base....

Hard to imagine the paltry homestead exemption in Williamson County for non-retirees having that kind of an impact. I'll be curious to hear what Riaelise has to say

[Trainwreck20]

Originally Posted by blameyourself

Hard to imagine the paltry homestead exemption in Williamson County for non-retirees having that kind of an impact. I'll be curious to hear what Riaelise has to say

The homestead exemption caps the taxable value at 10% higher than the previous year in all counties, I think. That can make a pretty hefty difference in a hot market.

[blameyourself]

Originally Posted by Trainwreck20

The homestead exemption caps the taxable value at 10% higher than the previous year in all counties, I think. That can make a pretty hefty difference in a hot market.

Uh, I'm referring to the fact that it only takes off 5% of the value which is peanuts. I think it's safe to assume she already had it in place the previous year since she's been a resident for quite some time. 10% is a lot and my point was that people will have to keep paying that until they catch up with market value. Hence, she can expect that 10% for probably at least the next 5-10 years unless you seriously think housing prices are going to plummet with all the growth going on. I don't have a crystal ball but I think there will be some appreciation over the next 10 years (housing prices have ebbs and flows but over that length of time, I would suspect most will go up)

Someone with a $300k house that went up to $550k at a 2.5% tax rate would be paying...

Year 1 $7500
Year 2 $8250
Year 3 $9075
Year 4 $9983
Year 5 $10,981
Year 6 $12,079
Year 7 $13,287
Year 8 $14,615
Year 9 $16,077
Year 10 $17,684

Between year 6 and 7 would be the stopping point if there was 0% appreciation and the home stayed at that value. Clearly with a small amount of appreciation, the number could get to the 10 year figure and anyone buying a home at 50 years of age or younger would experience this shy of a tax rate decrease. So in this example, that homeowner had their property tax increase by $10k and more than doubled. That's going to be tough for families to handle that don't have the benefit of a over 65 exemption. Using the earlier example in this thread will result in a property tax bill probably in the $25k range.

Feel free to correct me if my math is off.

[blameyourself]

And a good article with some takeaways of what I'm talking about...

Remember that 10 percent homestead cap that limits the growth in your home’s taxable value? Many of us could bump up against that cap year after year. At 10 percent annual growth, a home’s property tax bill will still nearly double in about seven years.

Homeowners and renters alike are worried about hanging onto their places in the face of a frenzied real estate market that shows no signs of abating.


https://www.texasmonthly.com/news-po...me-appraisals/

[Trainwreck20]

Originally Posted by blameyourself

And a good article with some takeaways of what I'm talking about...

Remember that 10 percent homestead cap that limits the growth in your home’s taxable value? Many of us could bump up against that cap year after year. At 10 percent annual growth, a home’s property tax bill will still nearly double in about seven years.

Homeowners and renters alike are worried about hanging onto their places in the face of a frenzied real estate market that shows no signs of abating.


https://www.texasmonthly.com/news-po...me-appraisals/

Nope. For you tax bill to double in seven years, several things would have to happen:
- The value of your home would have to approximately double. Extrapolating from one or two years indicates this might happen. Historically, it is not the norm;
- The city budget would have to at least double. Again, this isn't historically normal;
- The number of non-HSE properties would have to basically disappear or devalue greatly, as they suffer the brunt of tax increases.

From 2021 to 2022 our appraised value went up ~42%. Our taxable value went up 10%. Our taxes went down $150 (due to dropping tax rates by the city/county). Presumably, our taxable value will go up another 10% from 2022 to 2023, but the rates are unknown. The 'creep' into that unrealized HSE cap helps keep the rates from going up, but any fall in overall value wills across the board will see the non-HSE reduce their taxable value and offset some or all of the increases gained at the HSE properties.

Anyway, the Tx Monthly article is incomplete - the author says what his 2021 taxes are and mentions his school taxes went up, but he does not list his 2022 taxes. It is very likely that it is much less than 10%. Our school taxes went up a smidge (similar to the author), but our tax bill went down. Which puts us way behind on doubling our tax bill in 7 years.

Over the years, I have gotten very familiar with my taxes on how the work.

[blameyourself]

Originally Posted by Trainwreck20

Nope. For you tax bill to double in seven years, several things would have to happen:
- The value of your home would have to approximately double. Extrapolating from one or two years indicates this might happen. Historically, it is not the norm;
- The city budget would have to at least double. Again, this isn't historically normal;
- The number of non-HSE properties would have to basically disappear or devalue greatly, as they suffer the brunt of tax increases.

From 2021 to 2022 our appraised value went up ~42%. Our taxable value went up 10%. Our taxes went down $150 (due to dropping tax rates by the city/county). Presumably, our taxable value will go up another 10% from 2022 to 2023, but the rates are unknown. The 'creep' into that unrealized HSE cap helps keep the rates from going up, but any fall in overall value wills across the board will see the non-HSE reduce their taxable value and offset some or all of the increases gained at the HSE properties.

Anyway, the Tx Monthly article is incomplete - the author says what his 2021 taxes are and mentions his school taxes went up, but he does not list his 2022 taxes. It is very likely that it is much less than 10%. Our school taxes went up a smidge (similar to the author), but our tax bill went down. Which puts us way behind on doubling our tax bill in 7 years.

Over the years, I have gotten very familiar with my taxes on how the work.

I have no idea how you can believe this when I just gave you an example above (post #7) where the value remained constant. I really don't think you understand the math here or you are in denial of how much everyone's property appreciated over the last 3 years (also not the norm).