Property tax appraisals

Property tax appraisals

By Terry Hanley and Rob Heidrick Friday, 06 March 2009

As Travis and Williamson county residents submitted their 2008 property tax payments in early February, county appraisers were concluding the districts’ first round of property evaluations for the coming year. The analyses of local home values over the next several months will ultimately be used to determine property tax rates for all residences in the two counties.

Alvin Lankford, the incoming chief appraiser at the Williamson Central Appraisal District, or WCAD, said that while it is too early to predict how this year’s home values will compare to last year’s, Central Texas has thus far managed to avoid the sharp price declines plaguing other areas of the nation.

“Texas has been fortunate that we haven’t taken that kind of hit,” Lankford said. “But it’s a little early in the process to know how we’ve been affected.”

Patrick Brown, chief appraiser for the Travis County Central Appraisal District, or TCAD, said though the trend is up from last year in Travis County, he thinks home appreciations are generally slowing down.

“Even last year we were seeing some slowdown, no change, maybe even slightly negative value changes by the county line [in] Elgin, Manor and Del Valle,” Brown said. “I think they are going to continue to slow, and I think we are going to continue to find more and more pockets of no change and maybe even slightly decreasing values this year.”

Calculating home values

The appraisal districts base the value they set for each home according to the actual selling prices of similar homes in the area.

District officials draw boundaries around neighborhoods with homes of comparable value. Each property is evaluated based on its estimated sales price, as well as factors such as age, size and structural condition of the home.

TCAD appraises new homes and lots Jan. 1, whereas WCAD appraises new homes when they are built. Both reappraise every property in their counties annually. However, Lankford and Brown both said that district employees do not inspect each property in-person every year. Appraisers frequently use market statistics to project a home’s appreciation or depreciation, but because Texas is one of a handful of states that does not require home sellers to disclose pricing information, the district must consult property owners, real estate agents and real estate listings to gather figures.

WCAD and TCAD do not give advance notice of an inspector’s arrival because of the disproportionate ratio of appraisers to homes, but Lankford said WCAD appraisers knock on doors and speak with property owners if they are home.

Appraisal inspectors confirm lot measurements, evaluate new improvements and check for damages that could devalue a home. Homeowners are not usually required to report improvements such as additions or remodels unless the appraiser documents the upgrades upon visiting the property.

“If you’ve got new roof, new HVAC, you’ve re-carpeted, you’ve repainted, you’ve gotten the kitchen remodeled, you’ve added fixtures … you’ve probably done enough there that you have actually changed the quality of the property,” Brown said. “So you may have improved it enough that, through a building permit, we might recognize that as an increase in value.”

Tax rate calculation

Analysts compute the total taxable value for each area, and local taxing authorities, including city governments, school districts and public utility providers, use the information to calculate their respective tax rates for the coming year.

“They make their decisions on what kind of tax rate they need based on the values that they’ve got to handle their budget,” said Joe Pondrom, chief deputy tax assessor-collector for Williamson County.

The assessor-collector’s office gathers tax rates and property information from each district and bills residents accordingly. Cities use property tax revenues to fund public services, such as police, parks and recreation and community development.

Appraisal caps

Increases in home values generally lead to higher tax bills, but Texas law limits the amount that a house’s taxable value can increase from one year to the next. Under the state’s 10 percent appraisal cap policy, even if a home’s actual market value goes up by more than 10 percent from one year to the next, the homeowner will not have to pay taxes on any increase beyond that amount.

Notifications of homes’ appraised values will be mailed to residents by mid-April.