ANSWERS TO YOUR QUESTIONS

FAQ

Who is behind this Web site?
TruthAboutTexasTaxes.org is a Web site maintained by the Texas Association of REALTORS®.

Why is the Texas Association of REALTORS® involved in this issue?
Texas REALTORS® work to make homeownership more affordable to current homeowners and those who would like to buy a home. Increasing housing affordability benefits our industry, and it benefits Texas consumers.

Why did you support the property-tax-cut legislation?
This legislation provides substantial property-tax relief—about $6 billion. That represents the largest property tax cut in Texas history. Both residential and commercial property owners benefit.

Why is property-tax relief so important?
Property owners have been shouldering too heavy a tax burden for far too long. Property taxes in Texas are some of the highest in the nation, which is one reason that Texas ranks only 42nd in homeownership rates in the U.S.

How much is my tax cut?
That depends on several factors, including the assessed value of your home and the current tax rate levied by your school district. The vast majority of school districts were at the maximum $1.50 per $100 valuation for maintenance and operations. The tax rate for those school districts will go down to $1.33 for the 2006 tax year and down to $1 for the 2007 tax year.

School districts have an "enrichment option" to add up to four cents back to their tax rate. This option addresses the state Supreme Court's ruling that there must be local discretion in property taxes.

What about people with over-65 and disability exemptions. Do we get tax cuts?
Legislators want to include Texans 65 and older and those with disability exemptions in property tax relief, but that requires an amendment to the state’s Constitution to do so. Legislators hope to get that measure on the ballot in May 2007.

Which property taxes have been cut?
The tax cut applies only to school-district taxes. It does not apply to property taxes you pay to the city, county, and other taxing authorities.

Won’t appraisal districts just artificially inflate home values to make up for lost revenues?
Appraisal districts are charged with assessing each property accurately and fairly. If you believe your property’s value is not accurate, you can file a protest for a hearing with your appraisal review board. And, thanks to legislation supported by the Texas Association of REALTORS®, if you disagree with the review board’s determination, you have a new avenue of recourse other than a costly lawsuit: binding arbitration.

When the cap was $1.50 per $100 valuation, my school tax rate was higher than $1.50. Now that it's supposed be down to $1.33, my school tax rate is higher than that, too. What's going on?
These tax rates apply only to school maintenance and operations costs. Many school districts have an overall tax rate that is higher due to bonds local voters have approved to finance projects outside of normal operations and maintenance. These projects might include building new schools or new facilities at existing schools.

Under the new bill, It's also possible for a school district to raise their tax rate up to four additional cents. Finally, a school district can raise its rates even higher if voters approve the increase.

I got my property tax bill and it's about the same as last year. What happened to my tax cut?
Comparing this year's tax bill to last year's does not give you a true picture of your tax savings. Instead, compare your tax bill this year to what you would have paid if the legislature did not pass legislation to reduce the school tax rate.

There are several reasons some or all of your tax savings may have been "eaten up." First, your property appraisal may have gone up. It's also possible that taxing entities other than your school district raised tax rates. However, those actions would have occurred whether school property-tax relief was passed or not.

Also, keep in mind that the school property-tax rate will go even lower next year.

So how much have I saved this year?
To figure your true savings from the tax cut, divide your taxable property value by 100. Multiply that amount by 0.17. That amount is your tax savings for 2006. For example, if your taxable property value after any exemptions is $200,000, your tax savings is $340 for 2006.

To figure your savings in 2007, estimate your taxable property value and divide by 100. Multiply that amount by 0.50. For example, if you estimate your 2007 taxable property value after any exemptions at $210,000, your tax savings is $1,050 for 2007. These numbers would be slightly lower if your school district adds any of the allowable four-cent enrichment option.

What’s to stop property taxes from creeping back up?
Another part of the legislation lowered the rollback rate from 6% to 4%. Basically, that means that any school district where total tax revenues are 4% (or more) higher than the previous year must hold an election for approval of that tax rate. That's true whether the increase in tax revenue comes from the district raising its rates or from rising appraisals.

What else can I do to lower my property taxes?
Texas REALTORS® will continue to fight to make homeownership more affordable, and that means continuing to push for legislation that lowers the property-tax burden. But legislators also need to hear from Texans like you. Find your legislators.

What's next?
Leaders of the Texas Association of REALTORS® realize there’s much work to be done. What we accomplished in 2006 was only a start. We support efforts to review and reform the property-appraisal system in our state. We will work hard during the 80th Texas Legislature in 2007 and beyond to see that Texas property owners do get meaningful, long-lasting property-tax relief.