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Texas Association of Builders
May/June 2016
Government Relations
members because of the effect on the
availability of housing and the purchasing
power of consumers for home buying.
The property tax system in Texas begins
with the appraisal process (see chart).
During the 84
th
Texas Legislative Session
(2015), TAB worked with stakeholders
in the real estate industry to defend the
Texas Constitution’s guarantee of equal
and uniform taxation, which means all
property must be taxed at market value. If
a property owner does not agree with their
property appraisal, TAB considers that all
property holders, whether residential or
business owners, have the right to challenge
their respective property appraisals to
ensure they are equal and uniform.
During the Select Committee’s interim
hearing in January, chaired by Senator Paul
Bettencourt (R-Houston), the appraisal
process and property tax administrative
issues were frequently discussed. The
hearing was held in San Antonio and the
topic of discussion drew in more than
250 attendees and more than 50 witnesses
testifying. TAB Government Relations
staff and TAB members were among those
in attendance. TAB board member and
Multifamily Council member Barry Kahn
provided detailed testimony on the need
for consistency in the appraisal process.
Chairman Bettencourt introduced the
primary issue the committee is set to
address by using data provided by the
Office of the Texas Comptroller of Public
Accounts. “Data…shows that statewide
between 2005 and 2014, county tax levies
were up 70%, city tax levies were up 61%,
while median household income was only
Senate Select Committee to Review
Property Tax Burden on Property Owners
*Source: Texas Senate Select Committee for Property Tax Reform and Relief, 1/27/2016
Appraised Value x Tax Rate = Tax Bill
If your Home is appraised at $200,000, and your tax rate
is $0.50 per $100 of property value:
If your appraised value goes up by 10% to $220,000
but the tax stays the same:
That's a $100 of 10% increase in your taxes!
In order to keep your taxes from increasing if your
appraised value goes up 10%, the tax rate needs to
be cut by 9% to $0.455:
HOW IS YOUR
PROPERTY TAX BILL CALCULATED?
HOW DOES THE HOMESTEAD EXEMPTION
AFFECT YOUR PROPERTY TAX BILL?
Then
If your home is appraised at $200,000 and the
Homestead Exemption for school taxes is $25,000:
With an Assessed Value of $175,000 at the average school
tax rate of tax rate is $1.25 per $100 of property value:
Without the Homestead Exemption:
a $313 difference!
By Sue Pinger
F
ollowing a legislative session that
actively discussed the tax burden on
Texans, Lieutenant Governor Dan
Patrick announced the appointment of the
Senate Select Committee on Property Tax
Reform and Relief. This Select Committee
is charged with studying the property tax
process in Texas, including the appraisal
system, and to examine and develop
options to further reduce the tax burden on
property owners. The committee will host
public interim hearings around the state
to discuss these topics prior to submitting
recommendations to the Texas Legislature
on ways to promote transparency,
simplicity, and accountability from taxing
entities and viable options for reducing the
tax burden on property owners.
The Texas Association of Builders (TAB)
continuously monitors and engages on
the state’s actions on various taxes and
fees, such as the margins tax (also known
as the revised franchise tax), sales taxes,
occupational taxes, school finance matters,
property tax, and other taxes that may affect
both residential and business taxpayers.
Property tax matters are specifically
important to TAB and its association
Then $200,000 x $.050/$100 = $1,000
Assessed Value x Tax Rate = Tax Bill
Then $200,000 – $25,000 = $175,000 Assessed Value
Then $175,000 x $1.25/$100 = $2,187 Tax Bill
$200,000 x $1.25/$100 = $2,500 Tax Bill
Appraised Value – Homestead Exemption
= Assessed Value
Then $220,000 x $.050/$100 = $1,100
Then $220,000 x $.0455/$100 = $1,000