FAQ# 3 - Why Are Property Taxes So High in Texas?

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Real Estate Agent with Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com TREC #0492321
http://actvra.in/C5H

FAQ # 3 - Why Are Property Taxes So High in Texas?
That's a question that I have been asked quite often from many out of state residents, who have decided to relocate, and purchase a home in Texas. Many non-Texas residents are just not used to seeing “High Property Taxes”. But there is a reason why Texas has “High Property Taxes”. First, Texas has NO State Income Tax. Second, Texas needs a way to fund our public school education system. Third, Property Taxes are another source of income for the state to support many public projects throughout the state.

Texas Property TaxesIf you take a closer look at Texas property taxes you will notice that the largest amount is always allocated to support the public school system. I don’t claim to have all the answers, but I know many were under the impression that when Texas started that State Lottery, that the majority of the public schools expenses would be funded by the State Lottery. However, the State Lottery has not relieved property owners the burden of paying “Higher Property Taxes”.

Property taxes are a significant part of the overall cost of owning a home in Texas. The state has no income tax, so property taxes carry a heavy load when it comes to funding public-school, city, and county budgets.

How is the tax determined?

   
There are two components that go into figuring how much property tax you owe: the value of your home and the tax rate.
   
Your county appraisal district has the responsibility of appraising your home. The appraisal district bases that value on the location, size, and features of your home, as well as recent sales prices of similar properties in your neighborhood.
   
Taxing entities, like school districts, cities, counties, municipal utility districts, community colleges, hospital districts, and others, independently set their tax rates. These rates are expressed as an amount per $100 of property value. So a tax rate of 23 cents on a $150,000 property would equal $345 in taxes (150,000/100 x .23).

Exemptions are another way to lower your property tax liability, but that will be a topic for another blog post. Just know that Texas has the Homestead Exemption, Military Disability Exemption, and Over 65 Exemptions that will all lower your home’s property taxes.

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Ambassador
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Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

No state income tax is a bonus and should help to justify that large property tax bill. I pay a lot in state income tax every year. Does your state offer property tax relief for seniors? We have such a program in Colorado. Jerry, you are so up to date on what is going on in your area. Thanks for sharing.

June 06, 2012 06:36 AM #7
Rainmaker
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Cathy Bureau
www.GreenHomeRealty.com - Alamo Heights, TX
Your Personal Real Estate Concierge

Excellent explanation. I know many complain about it and sometimes it does seem unfair that some folks are paying and others (renters) are not. But that isn't true. You see, when a landlord charges rent they include their operational expenses, even down to one single family house. So renters of homes, duplexes, and apartments are all paying their fair share since it's factored into the operations costs.  People just don't usually think that far into it.

The other thought that came to mind is that it seems unfair that everyone pays into the kitty for education even if they don't have kids. True enough, it might seem unfair at first glance. But on deeper thought, the alternative is an uneducated population which would drive the economy downwards. So pick your evil - pay property taxes or pay more poverty safety net funding.

June 06, 2012 06:43 AM #8
Rainmaker
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Belinda Spillman
Aspen Lane Real Estate LLC - Aurora, CO
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Jerry,  No State income tax?  Wow that is a huge money saver.  It makes sense that your real estate taxes would be higher to help support the schools. 

June 06, 2012 08:28 AM #9
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Barbara-Jo Roberts Berberi & Corinna Birgit Cromartie
Charles Rutenberg Realty - Palm Harbor, FL
Palm Harbor & Dunedin FL Residential Real Estate

We also do not have a state income tax here in Florida, Jerry. It is amazing how many Snowbirds relocate here specifically for that reason! 

GREAT post and well explained! Suggested!

June 06, 2012 10:13 AM #10
Rainmaker
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Roy Kelley
Retired Real Estate Broker, Maryland Blogger - Gaithersburg, MD
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Thanks, Jerry, for your explanation.  When buyers relocate from the northeast. they will not be too shocked.

June 06, 2012 10:17 AM #11
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Brenda Mullen
RE/MAX Access - Schertz, TX
Your San Antonio TX Real Estate Agent!!

Terrific post Jerry!  That is a common question here in San Antonio TX and I always tell them, you are going to pay somewhere...since we have no state tax here, property taxes is where you will get hit :)!  Now that being said, San Antonio offers the homestead exemption, the senior exemption and the ever favorite Disabled Vets exemption of which we have a bunch here :)...well, you know that already.  Suggested!

June 06, 2012 03:19 PM #12
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Thanks, Jordon. Texas property taxes are always a great topic for debate. Most Texans know this, but it's the non-residents that often ask this question.

June 06, 2012 07:44 PM #13
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Thanks, Dee Dee. Yes, Taxes are always being explained since they are debated often. I have heard that California's property taxes are lower than Texas.

June 06, 2012 08:37 PM #14
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Tom. You nailed it all right. The state governments will get what they need to fund all those public projects.

June 06, 2012 08:42 PM #15
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes. Bliz. I agree with your assessment. Homeowner do need to do some research with the state they decide to live, since they all will have some type of taxing structure in place to fund all the public projects.

June 06, 2012 08:50 PM #16
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Kathy. I have always love the idea that Texas doesn't have a State Income Tax. There are a few ways to get your taxes lower.

June 06, 2012 08:52 PM #17
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Irene. We have that Homestead exemption too. It does help to lower a homeowner's property taxes some what.

June 06, 2012 08:53 PM #18
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Debbie, We do have an Over 65 Exemption that will help reduce property taxes. This gives some relief on those taxes.

June 06, 2012 09:07 PM #19
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Hi Cathy. It's been a very busy week, but I am back catching up on my responses. I am sure renters never think of it as being factored into their rent payments, since I know the landlords are paying property taxes. And who wants an uneducated population of young people? It's kind of scary sometimes when I go the the stores, and find out that these young people have to depend on a machine to tell them what the right amount of change needs to bad. I have always thought that was said, Then, one day, these same kids will be leaders or government officials. Kind of makes you wander, why anyone would cry about not paying for public education.

June 10, 2012 07:41 AM #20
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Hi Belinda. I have never had a concern about paying higher taxes to support our public schools. Those kids are our future.

June 10, 2012 07:42 AM #21
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Barbara Jo. I know many look for states that don't have that State Income tax. Thanks for the suggest!

Have a Great Day!

June 10, 2012 07:44 AM #22
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Roy. Buyers coming to Texas will certainly be prepared, knowing where the money goes for property taxes.

Have a Great Day!

June 10, 2012 07:46 AM #23
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Yes, Brenda. I know about all those Exemptions, since I claim all Three of them. They cut my property taxes more than half. Everyone needs to apply for those exemptions as soon as they can.

June 10, 2012 07:47 AM #24
Rainmaker
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Donna Foerster
Cherry Creek Properties, LLC - Parker, CO
Metro Denver Real Estate Agent

Jerry~ I'm sure this is a common question from out-of-state buyers where property taxes are much lower.  You give a great explanation.

June 12, 2012 10:00 AM #25
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Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Thanks, Donna. Yes, this question is asked often from Non Texas residents. It makes their monthly payments higher when they have an escrow account setup on those home purchases.

June 12, 2012 08:53 PM #26
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Jerry Newman

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