Why Your Property Tax Bill Keeps Going Up

If you own a home in Texas, you’ve probably looked at your property tax bill and thought, “Well, that’s cute. Why is THIS going up again?”

Here’s the part that often gets misunderstood.

Growth itself isn’t necessarily the reason your property taxes increase.

When new homes and businesses come into an area, they actually add more property to the tax base. In simple terms, there are more people and businesses helping pay for local services.

The bigger issue is how much money local taxing entities decide they need to collect.

And here’s something homeowners really need to know:

A lower tax rate does NOT automatically mean a lower tax bill.

If your home's taxable value goes up enough, your bill can still increase even when the tax rate comes down.

Texas also has a “no new revenue” tax rate. Basically, it’s the rate designed to collect about the same amount of property tax revenue from existing properties as the year before. Local governments can choose a rate below that amount, which can create an actual tax reduction.

So when you hear, “We lowered the tax rate,” don’t stop there.

Look at the actual tax bill. That’s where the truth lives.

And if you believe your property appraisal is too high, you can still protest it.

Property taxes aren’t exactly thrilling dinner conversation, but understanding how they work can save you from being blindsided when that tax bill shows up.

Source: Texas Real Estate Research Center at Texas A&M University.