Why Do Property Taxes Go Up?  

Property taxes are an unavoidable part of owning a home and it would be wonderful if we had a set amount of taxes when we bought our home that never changed. It would certainly make budgeting much easier. Sadly, our property taxes in Texas go up almost every year. How much they go up varies on a lot of factors, but why do they get raised in the first place? Let’s look at an overview of why property taxes go up each year. 

Property Value Increases 

The housing market fluctuates from year to year, so property values never stay the same. For example, in the years since COVID-19 property values have continued to soar nationwide. That’s a great thing for your equity in your home, but a bad thing when it comes to taxes. When your property value increases based on a recent assessment, so do your taxes. 

The Local Government Is Changing Their Budgets 

Property taxes are controlled by local governments, who set the mill rate annually. Local governments rely on property taxes to fund public services like the police, local schools, road maintenance etc. If the community or local government has pressing local projects that need funding, property taxes could increase.  

School District Funding 

In Texas, the homestead exemption is actually based on school districts, but not everyone is aware that most public-school systems are funded in part by property taxes. New high schools, renegotiations with teacher unions for higher salaries, and other public school needs can raise local property taxes.  

Tax Rate Changes 

There doesn’t always need to be a reason to raise property taxes even if we want there to be one. Local governments review mill rates on a regular basis and can change them, within reason based on local laws, as they see fit.  

Inflation  

Inflation is a much-discussed recent issue and unfortunately it also affects the tax rate. As inflation rises, so do property taxes. As the cost of goods and services increase, local governments Must account for absorbing those costs, partially by raising local taxes.  

Tax Exemptions 

The state of Texas offers many tax exemptions to help homeowners lower their overall property tax bill. The most common one in Texas is the Homestead Exemption. If you lose an exemption or no longer qualify, your property taxes would go up. 

For example, to claim the homestead exemption you must use that property as your primary residence. If you change your primary residence, you would lose the homestead exemption. Currently sitting at $100,000, if you lost this exemption it would add $100,000 of taxable value to your home.   

Johnson and Starr: Experts on Property Taxes 

Struggling with rising and delinquent property taxes? Contact Johnson & Starr today. Our team of property tax experts can help you navigate these new rules and ensure you’re taking full advantage of the available relief while also finding a property tax loan that fits your situation and keeps you in your home.