Texas homeowners receive the Notice of Appraised Value every year. This notice informs homeowners of their assessed property value for the tax year. Your property tax bill is based on this value, which is determined by Texas appraisal districts.
It is possible for your property’s assessed value to change from year to year, even if you don’t make improvements to your home. We’ll explain what factors can cause your property’s assessed value to increase, and what you can do if you disagree with the value.
Did you make improvements to your home?
First, did you complete any large renovations? Some home improvement projects can increase your property’s assessed value. Examples could include adding a detached garage, another bedroom or bathroom, or an in-ground pool.
Such major renovations can increase your property’s market value, and thus your appraised or assessed value.
Other factors that can influence assessed value
Even if you did not make any improvements to your home, your assessed value can still increase due to factors beyond your control.
Nearby home sales
If your neighborhood has had a lot of home sales, this could influence your assessed value. As sale prices of comparable properties go up, so can the value of your home. Appraisal districts will often use recent sales in their assessment.
New home construction
In addition, new home construction or nearby amenities can also increase your home’s assessed value. Such factors are a good indication that the neighborhood or location is desirable.
Market conditions can also influence pricing. High demand and low supply are likely going to increase your property’s assessed value. When property values change on the market, you’ll see this reflected in your assessed value.
How often are properties reassessed in Texas?
The Texas Property Tax Code requires that appraisal districts reassess properties at least once every three years.
The appraisal district uses the mass appraisal system, which involves one of three approaches to appraise property: sales comparison approach, income approach, and modified cost approach. All of these approaches are widely accepted. But they can be unreliable because they aren’t examining properties individually in the way that a fee appraiser does.
Is there a maximum increase that applies to residential properties?
Taxable property must be appraised 100% of market value as of January 1. Fortunately, there is a cap that applies to properties with a homestead exemption. This cap means that assessed value can only increase 10% from year to year, even if the market value increases more than 10%.
How to Protest Appraised Value
If you disagree with the value set by your appraisal district, you can file a property tax protest. If you win your appeal, you can reduce your home’s assessed value and lower your property tax bill. You can file an appeal every year, even if your home’s value doesn’t change.
The process to appeal is simple, but in order to achieve maximum savings, you may want to hire a property tax consultant. Learn more about North Texas Property Tax Services and how our firm can help you save.