FAQ

FREQUENTLY ASKED QUESTIONS ABOUT PROPERTY TAXES

Property taxes are locally assessed taxes. Every qualified property owner pays property taxes to help pay for services provided by local government, such as public schools, libraries, parks and playgrounds, city streets, county roads, police, fire protection, emergency responsive medical service and many other services provided by local government. The county appraisal district appraises property located in the county, while local taxing units set tax rates and collect property taxes based on the values set by the appraisal districts.

HOW DOES THE PROPERTY TAX SYSTEM WORK?

There are three main parts to the property tax system in Texas:

  • An appraisal district in each county sets the value of property annually.
  • A citizen board, called the appraisal review board (ARB), hears any disagreements between a property owner and the appraisal district about a property’s value.
  • Local taxing units, including city, county, school and special districts, decide how much money they will spend by adopting a budget. Every property is taxed by the county and the local school district. If the property is located inside a city’s boundaries, you may also pay city taxes. Special taxing units, such as junior college, hospital district, road district, water, fire, and others may also tax your property. In August or September, each taxing units elected officials determine and adopt tax rates to raise the revenue needed to fund their budgets for their operations and debt payments. The adopted budgets, and applicable tax rates set to fund the budgets, determine the total amount of taxes that each person pays.

SHOULD I PROTEST?

The ARB must base its decisions on evidence it hears from both you and the chief appraiser.

Protest issues that an ARB can consider include:

  • The proposed value of your property is too high.
  • Your property is valued unequally compared with other similar property in the appraisal district.
  • The chief appraiser denied an exemption.
  • The chief appraiser denied agricultural appraisal for your farm or ranch.
  • The chief appraiser determined that you took your land out of agricultural use.
  • The appraisal records show an incorrect owner.
  • Your property is being taxed by the wrong taxing units.
  • Is your property incorrectly included on the appraisal records?
  • The chief appraiser or ARB failed to send you a notice that the law requires them to send.
  • The appraisal district or ARB took any other action that affects you.

APPRAISAL PROTESTS AND APPEALS

One of your most important rights as a taxpayer is your right to protest to the appraisal review board (ARB). You may protest if you disagree with the appraisal district’s value or any of the appraisal district’s actions concerning your property.

The chief appraiser must publicize, annually, the rights to and methods for protesting before the ARB, in a manner designed to effectively notify all appraisal district residents. However, residents and/or their agents generally try to discuss their protest issue(s) with the appraisal office in advance. They usually are able to work out a satisfactory solution without appearing before the ARB.

If residents, or their agents, are dissatisfied with the ARB’s findings, they have the right to appeal the ARB’s decision. Depending on the facts and type of property, they may be able to appeal to the state district court in the county in which your property is located; to an independent arbitrator; or to the State Office of Administrative Hearings (SOAH).

  • If the appraisal district appraises your property at a higher amount than in the previous year, Tax Code Section 25.19 requires the appraisal district to send a notice by May 1, or by April 1 if your property is a residence homestead, or as soon as practical thereafter.
  • If you are dissatisfied with your appraised value or if errors exist in the appraisal records regarding your property, you should file a notice of protest with the ARB. In most cases, you have until May 15 or 30 days from the date the appraisal district notice is delivered on whichever date is later.
  • After filing your protest, you will receive written notification of the date, time, and place for a formal hearing with the ARB. At the formal hearing, the ARB listens to both the taxpayer and the chief appraiser. You may discuss your objections about your property value, exemptions and special appraisal in a hearing with the ARB. Most appraisal districts, however, will informally review your protest with you to try to resolve your concerns prior to a hearing. Check with your appraisal district for details. The ARB’s decisions are binding only for the tax year in question.
  • If you lease property and are required by the lease contract to pay the owner’s property taxes, you may appeal the property’s value to the ARB. You may make this appeal only if the property owner does not. This appeal right applies to leased land, buildings and personal property. The appraisal district will send the notice of appraised value to the property owner, who is required to send a copy to you. If you appeal, the ARB will send any subsequent notices to you.
  • State law prohibits the Comptroller’s office from advising a property owner, agent or appraisal district about a matter under protest. State law also prohibits the Comptroller’s office from intervening in a protest.
  • Once the ARB rules on a protest, it sends a written order by certified mail. If you are dissatisfied with the ARB’s findings, you have the right to appeal its decision to a district court in the county where the property is located. Alternatively, you may appeal the ARB’s determination to binding arbitration or to the State Office of Administrative Hearings (SOAH) provided certain criteria are met.

PROPERTY TAX EXEMPTIONS

There are several types of exemptions you may receive.

(RESIDENCE HOMESTEAD)

Only a homeowner’s principal residence qualifies for the homestead exemption. A homestead can be a separate structure, condominium or a manufactured home located on owned or leased land, as long as the individual living in the home owns it. A homestead can include up to 20 acres if the land is owned by the homeowner and used for a purpose related to the residential use of the homestead. To qualify, a home must meet the definition of a residence homestead: The home’s owner must be an individual (for example: not a corporation or other business entity) and use the home as his or her principal residence on January 1 of the tax year. (If you are age 65 or older, or disabled, the January 1 ownership and residency are not required for the age 65 or disabled homestead exemption.) You may file for any homestead exemption up to one year after the delinquency date, which is normally February 1st. Once you receive the exemption, you do not need to reapply unless the chief appraiser sends you a new application. In that case, you must file the new application. If you should move or your qualification ends, you must inform the appraisal district in writing before the next May 1st.

(SCHOOL TAX EXEMPTION)

All residence homestead owners are allowed a $25,000 homestead exemption from their home’s value for school taxes. You may file an Application for Residential Homestead Exemption (PDF) with your appraisal district for the $25,000 homestead exemption up to one year after the taxes on the homestead are due.

(COUNTY TAX EXEMPTION)

If a county collects a special tax for farm-to-market roads or flood control, a residence homestead is allowed to receive a $3,000 exemption for this tax. If the county grants an optional exemption for homeowners age 65 or older or disabled, the owners will receive only the local-option exemption.

(OPTIONAL PERCENTAGE EXEMPTION)

Any taxing unit, including a city, county, school, or special district, may offer an optional percentage exemption of up to 20 percent of a home’s value. But, no matter what the percentage is, the amount of an optional exemption cannot be less than $5,000. Each taxing unit decides if it will offer the exemption and at what percentage. This percentage exemption is added to any other home exemption for which an owner qualifies. The taxing unit must decide before July 1 of the tax year to offer this exemption.

(TEMPORARY MOVE)

If you temporarily move away from your home, you may continue to receive the exemption if you do not establish a principal residence elsewhere, you intend to return to the home, and you are away less than two years. You may continue to receive the exemption if you do not occupy the residence for more than two years only if you are in military service serving inside or outside of the United States or live in a facility providing services related to health, infirmity or aging.

(PARTIAL EXEMPTION)

If you qualify for a homestead exemption and are not the sole owner of the property to which the homestead exemption applies, the exemption you receive is based on the interest you own. For example, if you own a 50 percent interest in a homestead, you will receive only one-half, or $12,500, of a $25,000 homestead offered by a school district.

AGE 65 or OLDER or DISABLED PERSONS

 Age 65 or older and disabled exemptions: Individuals age 65 or older or disabled residence homestead owners qualify for a $10,000 homestead exemption for school taxes, in addition to the $25,000 exemption for all homeowners. If the owner qualifies for both the $10,000 exemption for age 65 or older homeowners and the $10,000 exemption for disabled homeowners, the owner must choose one or the other for school taxes. The owner cannot receive both exemptions. Additionally, any taxing unit may offer an additional exemption amount of at least $3,000 for taxpayers age 65 or older and/or disabled.

VETERANS

  • Tax Code Section 11.131 entitles a disabled veteran who receives 100 percent disability compensation due to a service-connected disability and a rating of 100 percent disabled or of individual unemployability to a total property tax exemption on the veteran’s residence homestead. This exemption extends to a surviving spouse who was married to a disabled veteran who qualified or would have qualified for this exemption if it has been in effect at the time of the veteran’s death provided:
  • Tax Code Section 11.132 provides a partial exemption for residence homesteads donated to disabled veterans by charitable organizations that also extends to surviving spouses who have not remarried. The amount of exemption is determined according to the percentage of service-connected disability.
  • Tax Code Section 11.22 provides partial exemptions for any property owned by disabled veterans and surviving spouses and children of deceased disabled veterans.
    • the surviving spouse has not remarried;
    • the property was the residence homestead of the surviving spouse when the veteran died and;
    • the property remains the residence homestead of the surviving spouse.
  • Tax Code Section 11.133 entitles a surviving spouse of a member of the U.S. armed services killed in action to a total property tax exemption on his or her residence homestead if the surviving spouse has not remarried since the death of the armed services member.

CHARITABLE ORGANIZATIONS AND BUSINESSES

  • Texas law allows for a number of exemptions for charitable organizations and businesses. Please refer to the Comptroller’s publication Texas Property Tax Exemptions(PDF) for more information about these exemptions. Most of these exemptions have specific application forms that can be found through the exemption forms link in the box above.

PAYING YOUR TAXES

Each person who owns taxable property on Jan. 1 is liable for all taxes due on the property for that year.

  • Taxing units usually mail their tax bills in October. Tax bills are due upon receipt. Most property owners pay their property taxes before the year’s end so they can deduct the payments from their federal income taxes. In most cases, the deadline for paying your property taxes is Jan. 31.
  • Taxes that remain unpaid on Feb. 1 are considered delinquent. Penalty and interest charges are added to the original amount. If Feb. 1 is drawing near and you have not received a tax bill, contact your local tax offices. Find out how much tax you owe and make sure your correct name and address are on record. Failure to receive a tax bill does not affect the validity of the tax, penalty or interest due, the delinquency date, the existence of a tax lien or any procedure the taxing unit institutes to collect the tax.
  • If taxes go delinquent, the tax collector adds a six percent penalty and one percent interest on Feb. 1. Penalty continues to accrue at one percent per month until July 1. On July 1, the penalty becomes 12 percent. Interest will be charged at the rate of one percent per month, with no maximum. Private attorneys hired by taxing units to collect delinquent accounts can charge an additional penalty of up to 20 percent to cover their fees. If the delinquency date is postponed, penalties and interest begin accruing on the postponed delinquency date.
  • Your tax bill may include taxes for more than one taxing unit if these taxing units have combined their collection operations. Both the property owner and the owner’s designated agent must be mailed tax bills. If your mortgage company pays the property taxes on your home, the mortgage company will receive the tax bill.
  • If you appeal your value to a district court, binding arbitration or the State Office of Administrative Hearings, you must pay your taxes usually, the amount that is not in dispute – before the delinquency date. You may ask the court to excuse you from prepaying your taxes by filing an oath of inability to pay the taxes in question and arguing that prepaying the taxes restrains your right to go to court on your protest. The court will hold a hearing and decide the terms or conditions of your payment.
  • The tax collector must give you a receipt for your tax payment if you ask for one. Receipts are useful for federal income tax purposes and for ensuring that your mortgage company has paid the taxes on your home. In addition, your tax receipt is evidence that you paid the tax if a taxing unit sues you for delinquent taxes.
  • You could encounter the following situations if you fail to pay your taxes:
  • You will receive delinquent tax notices.
  • You may have the option to set up an installment plan with the tax collector.
  • You may be sued. Anyone who owned taxable property on Jan. 1 can be liable and sued for delinquent taxes even if the property has been sold or transferred during the tax year.
  • You may face problems in selling your property.