The Texas Association of Appraisal Districts (TAAD) announced last week historic growth in Texas real estate values.
According to the association, regions throughout the state have seen increases in values between 10% and 50% since last year.
“The Texas real estate market is growing as fast as we have ever seen it in the state’s history,” said Alvin Lankford, president of the association. “We have all seen the countless stories about people who move 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 also said that according to state law, appraisal districts are to appraise property at its market value.
“We are regulated by the state of Texas to make sure we do our jobs fairly and accurately,” Lankford said. “We follow the law, state regulations and the reality of real estate market sales when making our determinations.”
Since Texas does not have personal income tax, cities, counties, hospitals, school districts and community colleges rely heavily on property taxes. Taxing entities set the tax rates that determine the amount of taxes paid by homeowners and businesses.
According to a TAAD news release, an increase in property taxes is sometimes needed to keep vital services, such as police and fire departments, schools and hospitals, adequately funded.
The state of Texas also receives about $5.6 billion in a two-year budget cycle. In the most recent budget passed by the legislature, the state expected property tax collections would increase by 6% in the two-year budget period.
“For many of us, our home is our largest investment, an increase in market value can be considered a blessing,” Lankford said. “However, many people equate an increase in market value to mean an equal increase in property taxes, which is not always the case.”
The increase in what an individual owes in property taxes is unlikely to be proportional to the increase in home value, Lankford said.
There is a cap of 10% on the amount the assessed value can go up for properties with a homestead exemption and homeowners over the age of 65 and disabled veterans have additional protections.
Lankford also said there are caps limiting how much additional revenue from property taxes a taxing unit can collect without going to the voters for approval.
Collin County Chief Appraiser Bo Daffin said the Collin Central Appraisal District is continuing to analyze market data as it prepares to mail 2022 appraisal notices, which go out April 15.
“We are anticipating an average home value appraisal increase toward the middle of the range shown,” Daffin said. “We are expecting an average increase of 28% to 30%, comparing 2021 to 2022 average home appraisals for the county.”