Texas Association of Appraisal Districts issues guidance

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AUSTIN – Today the Texas Association of Appraisal Districts announced historic growth in Texas real
estate values.

According to the association, regions around the state have seen increases in values between 20-50%
since last year. Alvin Lankford, president of the association and chief appraiser of Williamson County
said, “The Texas real estate market is growing as fast as we have ever seen it in the state’s history. We
have all seen the countless stories about people moving to Texas from other states. This increase in
population contributes to a shortage of homes available and to the increase in prices paid for homes.”

Lankford added, “As a reminder, according to state law, appraisal districts are to appraise property at its
market value. In fact, we are regulated by the State of Texas to make sure we do our jobs fairly and
accurately. But, keep in mind, we are not responsible for setting the tax rate. We follow the law, state
regulations, and the reality of real estate market sales when making our value determinations.”

In a state without a personal income tax, cities, counties, hospitals, school districts and community
colleges all rely heavily on property taxes. These same political subdivisions set the tax rates that
determine the amount of taxes paid by homeowners and businesses. The State of Texas also benefits from property taxes to the tune of over $5.6 billion in a two-year budget cycle. That’s 75% more than the state makes from the lottery. Also, in the most recent budget passed by the legislature, the state assumed that property tax revenue collected (not appraised amounts) would increase by 6% over a two-year period.

Lankford concluded with, “Considering for many of us our home is our largest investment, an increase in
market value can be considered a blessing. However, many people equate an increase in market value to
mean an equal increase in property taxes which is simply not the case. An increase in property taxes is
sometimes needed to keep the police and fire departments adequately funded, along with our schools,
hospitals, and other vital services for our communities.

However, the increase in what a person owes in property taxes is unlikely to be proportional to the
increase in home values. First, there is a cap of 10% on the amount the assessed value can go up for
properties with a homestead exemption. Second, caps limit how much additional revenue from property
taxes a taxing unit can collect without going to the voters for approval will limit the increase in taxes. It
has never been more important to have a homestead exemption and the resulting 10% cap in assessed
value than it is today.”

Texas A&M Real Estate Research Center information on Texas housing market as well as major
metropolitan areas:
• Amarillo MSA up 13.78% year over year
• Austin-Round Rock MSA up 35.35% YoY
• Dallas-Fort Worth-Arlington MSA up 23.55% YoY
• El Paso MSA up 14.40% YoY
• Houston-The Woodlands-Sugarland MSA up 15.19% YoY
• San Antonio-New Braunfels MSA up 18.37% YoY
• Sherman-Denison MSA up 24.53% YoY

https://www.recenter.tamu.edu/data/housing-activity/#!/activity/State/Texas
https://www.recenter.tamu.edu/data/housing-activity/#!/activity/MSA/Austin-Round_Rock
https://www.recenter.tamu.edu/data/housing-activity/#!/activity/MSA/Dallas-Fort_Worth-Arlington
https://www.recenter.tamu.edu/data/housing-activity/#!/activity/MSA/Houston-The_WoodlandsSugar_Land
https://www.recenter.tamu.edu/data/housing-activity/#!/activity/MSA/San_Antonio-New_Braunfels

The Erath County housing market has also experienced unprecedented increases in the sales
prices of homes, land, and commercial property. We, at the appraisal district, are in the process
of analyzing the sales data we have.

Preliminary indications are producing increases in value like we have never experienced in Erath County. Residential property value, as well as land values will probably average around the 30% mark, with some properties increasing as much as 50% or more. Appraisal notices are due to be mailed out around mid-April.

Keep in mind, a 30% increase in value does not mean a 30% increase in the tax you pay. Caps are in place for homesteaded properties and on the amount of revenue a taxing jurisdiction can receive. The
Over 65 exemptions are frozen tax dollars for the county and school districts. Agricultural values will not see these kind of value increases in the taxable value, if, an Ag exemption is maintained.

As noted in the TAAD release above, this is taking place statewide. As always, contact the Appraisal District office with any questions or concerns you may have regarding your appraisal at 254-965-5434.

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