Property Tax Madness – Six Points To Consider
It’s that time of year when the notices of appraised value go out and the tax madness begins! Before you get your blood pressure up, consider these six points that can affect your real estate value and how you may have the wrong perspective about the notice.
Be Happy About Your Property Tax Increase
1) Your Real Estate Investment Paid Off
You often hear that real estate is one of the best investments you can make. You need a home to live in so it might as well be a good investment vs. a bad one. If the value always stayed the same or worse, went down, you would probably be a renter or calling the, We Buy Ugly Houses guys!
When the Central Appraisal District notice of appraised value lands in your mailbox, don’t despair, celebrate! You made an excellent decision and your investment is paying off. The tax man is just saying congratulations, the county, Jr. college, city & Van Alstyne ISD wants to share in your good fortune. Life is Good!
2) Fight the Central Appraisal District
If you don’t agree your dream home is worth more, you can always fight it. You have 30 days to explain why your home is falling apart, your neighbor is being charged less for the same model or the new power lines have fried your home value. Seriously, if you are going to fight your appraisal don’t go in with an attitude that you have been singled out personally.
Go in with documentation for needed repairs, pictures of your homes condition and data showing the value of your property like a Realtor’s market analysis (CMA), actual appraisal or other documentation vs emotion. You can play Perry Mason before the review board but the easy thing to do is opt for the informal review. Just arrange a meeting, lay out your position and in most cases you can win an adjustment.
Hint – Don’t go in with a Zestiment or other real estate portal estimate or an Ad for home for sale in your neighborhood. To find out why, read my past article on Zestiments or just click on the Zestiment link at the bottom of Zillows page, then read it and weep. Zillow hasn’t been in your home and since Texas is a non-disclosure state, they don’t have accurate information on what your neighbor’s house sold for.
3) Focus on the Tax Increase vs. your Home Value Increase
Most people dread the notice and go bonkers as soon as they see an increase in value. I recently had a property increase in tax value by $16,395. Call out the national guard, everything is a year older and I didn’t even buy those fancy appliances.
What you need to do is multiply the increase by the tax rate to find the actual increase in tax payment. Since this property is in Van Alstyne, the tax rate is higher (2.8049) due to city taxes vs. being outside the city limits (2.1923). If you do the math, my taxes increased $280.49. If this property was out of the city limits it would have been a $219 increase.
Now ask yourself, do you want to spend the time gathering documentation, taking pictures and take off from work to spend a pleasant couple of hours going to Sherman and talking about taxes? Obviously there is a point where it is worth it but for most people, the amount of increase isn’t large enough to fight the battle.
4) Did You Slide By Undervalued?
People often forget about the years without an increase or they were happy because they were undervalued. How many times have you heard someone gleefully remark about an addition the tax office isn’t aware of? Home owners often finish an attic space, convert a garage or enclose a screened in porch for additional living space. Frequently the tax office figures this out from building permits but in the unincorporated areas like most of Grayson County, building permits are not required.
By law, the appraisal district is required to re-evaluate your property every three years. They normally do it every year but if you live in a rural area or an area of little turnover, you might escape the tax man’s eyes. So be happy if the central appraisal district just discovered that deck you had the last five years!
5) Let’s Build A High School Football Stadium
Don’t forget that there are various entities that make up your rate detailed on the notice. One of the most expensive of these is the school system and it’s the most likely to raise the rate. The next time a 63-million-dollar high school football stadium like McKinney is building sounds awesome, consider where that money comes from when you vote.
If you are buying a home in a development be aware that sometimes they form special assessment districts for infrastructure improvements. In that scenario you pay the normal taxes, the HOA assessment and also the special assessment.
6) Claim Your Tax Exemptions!
You would be surprised at the number of people who neglect to take advantage of their entitled exemptions like homestead, over 65, disabled veteran/person or agricultural.
Make sure you are taking advantage of these exemptions and they are being credited to you if you had them in the past. I had a friend who was too lazy to file for his homestead exemption for over ten years. A few minutes of his time could have saved him hundreds of dollars.
The Bottom Line
Regardless if your value is up or down, it’s a good time to have a Realtor or appraiser do a market analysis of your homes current market value. Most likely, it has increased significantly since the last time you checked. Not only is this good information to use in fighting your tax appraisal but can also be used to evaluate your homeowner’s insurance and possibly eliminate Private Mortgage Insurance (PMI) if your equity has increased enough.
So you can see, getting that notice of appraised value from the Central Appraisal District isn’t really something you should dread. Embrace it and then get a professional third-party opinion to either fight it, use it to your advantage or prepare your home for sale. Contact Van Alstyne Realtor, Keith Laursen with Fathom Realty when you need help.
