If you are a homeowner in Harris County, Texas, it’s essential that you know how your annual property taxes are determined. Too many people overpay their property taxes because they don’t understand where the number comes from and how to get their tax bill reduced. By learning how Houston property tax is calculated, you can ensure that you don’t pay more than your fair share.
Under Texas law, property taxes are what is known as an “ad valorem” tax, which means that the amount of tax you pay is based on the market value of the property for which the tax is being paid. This means that a substantial determinant in your property tax bill is the value of the real estate you own.
When it comes to the amount of Harris County property tax you owe, the amount depends on three factors:
Each of these factors is explained in detail below.
Since property taxes are based on the value of your property, it makes sense that the first step in calculating property taxes is to conduct an appraisal of the real estate being taxed. In Texas, an appraisal district in each county determines property values each year through appraisals conducted between January 1 and April 30. The Harris County Appraisal District (Harris CAD) participates in appraisal activities throughout the year, and residential field staff members enter neighborhoods to verify certain property characteristics and changes.
After the property is appraised, local taxing units like counties, cities, school districts, and special hospital and fire districts receive a list of property values to use when setting a budget. The taxing unit will first determine how much money it needs for its annual operations and then set property tax rates accordingly.
After the tax rates for the various taxing units are fixed, the amount of property taxes you owe each local taxing unit is calculated. While most properties will be subject to taxation by several taxing units, in Harris County, you will receive a single property tax statement from the Harris County Property Tax Accessor-Collector, who is responsible for levying and collecting property taxes and then disbursing the proceeds to the appropriate taxing units.
Another important consideration when determining your Harris County property tax bill is whether any part of your property value is exempt from taxation. The most commonly used exemption is the homestead exemption, which applies to owner-occupied residential homes. This exemption establishes a specific amount of value that is not taxable in your primary residence, which reduces the taxable value of your home. So, for example, if your home’s appraisal value is $200,000 and you receive a $25,000 homestead exemption, you will be taxed as if your home’s appraisal value was $175,000.
Homestead exemption amounts are not standardized and are determined by each taxing unit separately. In Harris County, eligible property owners will receive a $25,000 minimum homestead exemption for their school district taxes. Harris County also offers an optional 20% homestead exemption for all homeowners, and any other taxing unit can provide an exemption for up to 20% of a home’s value. If a percentage-based exemption is offered, you will receive at least $5,000, even if 20% of your home’s value is a lower amount.
Because of the way property taxes are assessed in Texas, residents in different areas of Harris County will pay different property tax rates, since each local taxing unit is responsible for setting its own property tax rates. Generally, the average effective tax rate, which is calculated by consolidating the tax rates for every taxing unit, in Harris County is around to 2%, with some areas paying more and others paying less.
In Harris County, the median annual property tax payment for 2018 was $3,356, and the median home value was $165,300. However, Harris County is a large and diverse county, with median home values ranging from $73,400 in some locations to over $1.8 million in others.
Given the vast array of home values, it can be difficult to predict what your property tax bill might be based on general statistics. However, the Harris County Appraisal District lists jurisdiction tax rates and the available exemption amounts for each taxing unit.
Many people think they are stuck paying the amount listed on the tax statement they receive. Fortunately, this is not the case. Texas law gives you the right to protest your home’s appraisal value if you believe it is too high. If you’re successful in securing a lower appraisal value, you will owe less in property taxes.
Once the Harris County Appraisal District assesses the value of your property during the first couple of months of the year, you will receive a notice of the appraised property value in April or May. If you disagree with the assessed value of your house, you can file a property tax protest on the appraisal district’s website.
An independent group of Harris County property owners known as the Appraisal Review Board is responsible for resolving disputes between property owners and the appraisal district. During the protest process, you or your legal representative will be able to submit evidence and present arguments that show why the appraisal value for your home is incorrect. The Appraisal Review Board will then make a final determination based on each side’s arguments, and if they agree with your position, reduce the appraisal value for your home.
Protesting your property taxes can be challenging, particularly if complicated arguments need to be made. At Property Tax Protest, we know how to win protests because we have been doing it successfully for over 20 years. We know what works and what doesn’t and we have a long history of helping our clients pay only their fair share of property taxes. Sign up with us today with no risk. There’s no upfront fee and if there’s no reduction there’s no fee.