I'm having a little trouble figuring out how property is taxed down in the DFW area? Was just down there visiting friends and am looking at

Asked by Kurt, Chicago, IL Sat Sep 5, 2009

relocating Can someone help me out with the formula? I know it's based on the taxable value of the home which I'm guessing is either based on what you paid( IE the selling price") or it's appraised value? Are the school taxes and the property taxes then combined? My friends taxes have jumped and although he did just buy a year ago they seem very high for the price of home he bought?

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Jerry Holcomb, , Dallas County, TX
Sat Sep 5, 2009
Hi Kurt:
Your have two questions here.
1, how to calculate property taxes. 2, why your friends taxes increased.
In Texas each city has its own tax rate and this includes school, local, county and other various additions.
the range is about 2.2-3.1% and it is based on what the county assesses the property value for the year assessed This is easy to find out for a given property in Tarrant county go to http://www.tad.org Dallas county http://www.dallascad.org Denton county http://www.dentoncad.org & Collin County http://www.collincad.org
each are a bit different on finding the rate but look for appraisal value button and search for the property address. If you get stuck contact me for help.

2, if your friend bought a brand new home the last assessment was most likely on land value only. Example lot value $50,000.00 x 3.00%= $1500.00 then the next year the county comes out and finds a $250,000 lot and home so $250,000 X 3.00% =$7,500.00
I see this a lot at about 18 months and a home owner was set up by a builders loan officer for land taxes in escrow and then when the second tax bill comes out the taxes go to full value. The Lender pays the full tax bill but there is a shortage in the account. In turn they adjust the escrow for the new taxes plus the "catch up taxes in the shortage" many times the home owner cannot afford the increase.
I hate to see this. I always set up my clients on full taxes at closing so they are used to paying the full payment and qualified at full payment.
Hope this helps but if you have any questions send me a message. If I can help find financing let me know.
1 vote
T.E. & Naima…, Agent, Dallas, TX
Mon Sep 7, 2009
Having lived in Illinois, I will tell you it is a simpler formula here in Texas, but the taxes are higher for the same value. The good news is that the taxes on a similar 3 bedroom 2 bath home typically are lower than in Dupage or even Cook, despite the fact that the rates are higher here.

The taxes are normally on a combined bill, but each taxing district can issue its own bill. Every property is in multiple taxing districts, just like in Illinois. I say it's simpler because there is no assessed value versus market and a 16% or 33% multiplier and a state multiplier. Everything is market value here unless you get an exemption for being over 65 or disabled.

All owner occupants can claim an exemption for homestead. All these exemptions are either dollar amounts or a percentage of the market value. In order to calculate the taxes on a property you need to know its market value (which the tax appraisal district determines), which taxing districts it is located in (4 to 7 usually), and which exemptions apply to the property.

The unexempted rates range from about 2.4% to 3.1%. The exemptions can be as little as 0 in all districts except schools must be at least 5% for homestead. Many districts offer $5,000, 10,000 or 15,000 for homestead, and some are $50,000 for senior citizens.

Since a single formula is quite complicated because of the overlapping districts with different rates and different exemptions, if you can supply a neighborhood or address, this year's taxes can be calculated in about a minute.

In Rockwall we pay three bills, school, county and city. If you have a mortgage, the escrow pays these for you. In Dallas you can receive a bill with every taxing district on it.

When you buy a house, the value is firmly established for the next cycle, which begins January 1. Your friend's taxes may have jumped up because of a change in the value that happened because of the sale.

Say, the property was appraised by the appraisal office as $150,000 and he bought it for $175,000 last year. Then starting on January 1 this year the appraisal office would find the sales price and by May would have sent out a new appraised value notice to your friend. He can protest the value. Whatever happens to the protest, the value (probably $25k higher = +16%) will be used in September to send a bill for the whole year in October. The bill is due January next year. If your friend's taxes jumped up last October, then the change in value was due to the year prior.

Yes, as I said, compared to Illinois the tax rates are high, but the values are low -- the combination turns out to be cheaper than up there, usually.
Web Reference:  http://www.SumnerRealty.com
0 votes
Dallas Texas, Agent, Dallas, TN
Mon Sep 7, 2009
Contact city where you can review all your questions.

Based on many factors:
1. Age if over 65 proof of ID tax deduction
2. Community there are luxury area higher tax base
3. Homestead is a deduction
4. Appraised value vs. tax value two separate issues

Clear as mud correct

PS we don't have a State Tax vs. other areas in country

I am a Dallas realtor and loan officer “one stop shop for all your real estate services”

Lynn A. Crosby ~ National Featured Realtor
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0 votes
Bruce Lynn, Agent, Coppell, TX
Sun Sep 6, 2009

I can send you a list of the tax rates if this will help you.
It is based on a few things....one the "tax value" of the house, which is supposed to be market value.
That's a whole different discussion as "tax values" are often very different.....good rule is what you pay for the house though.
Rates will vary based on city, school district, county, and any other taxing jurisdictions that can tax the house.
Our property taxes are much higher than many other places as we do not have a state income tax.
Generally they will be from 2.5 to 3% of the "tax value" of the house, just to give you an idea.
Web Reference:  http://www.dfwSnapshot.com
0 votes
Dave Buske, Agent, Burleson, TX
Sat Sep 5, 2009
Hi Kurt,
A home is taxed on the appraised value set by the county appraisal district using the combined tax rate of the schools, city, county, etc. The value may be appealed if one can show that the value is too high. When you purchase a home such as a foreclosure, often times the current tax appraised value is much higher than the purchase price and then you can appeal the value of the home for the next taxing cycle. If your friend's taxes made a large jump, he might be able to appeal the value of his home if it seems appraised too high.
I hope this answers your questions but if not please let me know and I will try to answer them
Dave Buske
Web Reference:  http://www.DaveBuske.com
0 votes
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