Posts Tagged ‘government’

Benefits of Property Taxes

Published by Research Editor on August 12th, 2013 - in Taxes

Property taxes are high, especially in Texas, where we have the 14th highest property tax rate in America.

But when you factor in your entire tax burden, including sales, property, and income taxes, Texas ranks 6th lowest in the nation.

You already know that property taxes bring revenue to the government, which pays for all sorts of benefits. But what other benefits are there to property taxes? Charles Gilliland, David Adame, and Michael Oberrender answered our question in an excellent article entitled “In Defense of the Property Tax.”

Stable Revenue

In the article, the authors state, “Because property values change slowly, the property tax base is more stable than income and sales taxes.” A stable revenue means a stable government, which is beneficial all around.

To compare, a study found that sales taxes varied by more than 40% between 2000 and 2011. It would be hard for a government to function well on such wildly varying revenue.

Lower Taxes

Even though property taxes are high, our overall tax burden is nearly the lowest in America. How can this be? The article quotes a report that suggests that, if sales tax were to completely replace property tax, the sales tax would have to be 25% just to maintain current revenue.

A lower sales tax–of 11%–would be possible, but only if the tax base was expanded by taxing everything not currently taxed, including food, medicine, and real estate.

Either way, a skyrocketing sales tax would offset any savings from eliminating a property tax.

Economic Growth

Furthermore, the “In Defense of the Property Tax” article examines a study by the Organization for Economic Co-operation and Development on 21 countries, which suggests that higher sales taxes would not benefit the economy. “Property taxes, and particularly recurrent taxes on immovable property, seem to be the most growth friendly,” the study concludes.

Beneficial for All

Even though property taxes are high, they benefit Texas by providing a stable revenue, keeping taxes lower, and sparking economic growth.

Tax Bills Are Heading Your Way

Published by Research Editor on October 3rd, 2011 - in Tax Penalties, Taxes
Today is the day your tax assessor will mail your 2011 property tax bill, according to the state’s property tax calendar.

Will you be able to pay your bill?

If, like most people, there’s financial insecurity in your home or business, there’s no need to default on your property taxes and suffer the drastic penalties. Consider a property tax loan to cover your complete property tax obligations, including interest and fees.

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The local services you provide through your property tax

Published by Research Editor on August 17th, 2011 - in Taxes, The Basics
outline of tree stoplight, police badge, dog, taxes pay for these
There is no state property tax in Texas. Your property tax is a local tax, going straight to the governing bodies near you. Nearly 4,000 local governments in Texas are the ones collecting and using your property tax, including cities, counties, school districts, and special districts.My home, for example, is taxed by my city, of course, but again for the county, the regional water district, the school district, and the college district.

The different districts use the money for their local needs. Streets, fire protection, police departments, schools, colleges–property taxes are the largest single funding source for these community services. But just what are, exactly, the services you are paying for with your property taxes?

Consider just some of the functions and services of the common governments that use your property taxes:

County

  • Restaurant inspections
  • Disease control
  • Water sanitation
  • Courts
  • Jails
  • Sheriff’s office
  • Public buses
  • Elections: managing elections and counting ballots
  • Animal care and control
  • Emergency management
  • Emergency planning services
  • Trails, parks, and open space
  • Wastewater management

City

  • Aviation
  • Local cable channel
  • Animal control
  • Consumer health
  • Garbage and recycling
  • Code compliance
  • Provides equipment servics to other city departments
  • Fire protection
  • Libraries
  • Municipal courts
  • Parks
  • Athletics
  • Community centers
  • Forestry
  • Graffiti abatement
  • Building permits and plans
  • Inspections
  • Neighborhood education
  • Police
  • Public events
  • Streets, lights, signals, markings
  • Parking meters and city-owned parking garages
  • Storm water, including high water warning flashers, drain cleaning, maintaining drainage canals
  • Tap water

School district

  • Elementary education
  • Secondary education
  • School buildings
  • Teachers
  • Supplies
  • Utilities/maintenance
  • Administration
  • School counselors
  • Staff development/training
  • Extracurricular activities
  • Computers and technology
  • Library
  • School buses
  • Nurses
  • Security
  • “Improve the lives of homeless and at-risk families” in the school district, sometimes including free meals during summer vacation for the children of such families.

Community college

  • College education
  • Small business development, including counseling and mentoring
  • Continuing education
  • High school outreach
  • Dual enrollment/early high school
  • Instructors
  • Academic support
  • Student services
  • Scholarships and fellowships
  • Maintenance of property
  • Tuition discounts
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Dissatisfied with the ARB’s decision? You have options.

Published by Research Editor on August 17th, 2011 - in Protest, Taxes

balance scales with text 'dissatisfied with ARB's decision?'

So you’ve gone through the ARB hearing, presented your evidence, made your case. Eagerly, you awaited the ARB’s decision to arrive by certified mail.

But it was disappointing. Dissatisfying.

Is that it? Since you’ve already gone through the hearing, is this really the final word on it?

No. You have options: a binding arbitration, an appeal to a state district court, or an appeal to the State Office of Administrative Hearings. First consult with an attorney to determine if you have a case.

Binding Arbitration

If your property is worth $1 million or less (or is a residential homestead, regardless of value), and you are disputing the decision on market or appraised value, you can appeal the ARB’s decision through binding arbitration. Disputes on unequal appraisal determinations cannot be appealed in a binding arbitration.

Fill out the form quickly–the deadline is 45 days after you get the ARB’s order in certified mail. Along with the form, pay a deposit of $500 in money order or a cashier’s check, made payable to the Comptroller. If the arbitrator ends up setting the value of your property closer to your opinion of value than the ARB’s, you’ll get $450 back.

Alternatively, you can pay $250 for expedited arbitration–which limits you to one hour of argument. It also limits the appraisal district to one hour.

Once your form is processed, the Comptroller’s office will send you a website to choose an independent arbitrator. You and the appraisal district must agree on who the arbitrator will be. If you cannot agree, the Comptroller’s office will chose for you.

State District Court

File for a petition for review no later than 60 days after the ARB’s order comes to you in certified mail. You may ask to have your appeal resolved through arbitration, by a jury or a judge.

State Office of Administrative Hearings

If your property is worth more than $1 million and is in Bexar, Cameron, El Paso, Harris, Tarrant, or Travis county, you can appeal to the State Office of Administrative Hearings (SOAH) in a special pilot program. The SOAH is limited to 3,000 appeals and runs through 2012.

Fill out the form and submit it to the chief appraiser of your appraisal district by 30 days after the certified mail with the ARB’s decision arrived, along with a $300 filing fee payable to SOAH. “What form should I fill out,” you ask? The chief administrative law judge will prescribe the form.

Don’t Forget the Taxes

No matter what type of appeal you choose, remember that you must pay your taxes before the delinquency date. Usually, you can make a partial payment of taxes–the amount that is not in dispute. For example, if your property is, in your opinion, worth $100,000, but the ARB determined it was worth $200,000, you must pay the property taxes on the $100,000 worth of property before the delinquency date while you pursue arbitration or appeals.

If you are unable to pay the undisputed property taxes, consider a property tax loan.

Rollback Rate: Your Chance to Limit Taxes

Published by Research Editor on August 2nd, 2011 - in Protest, Taxes
The rollback rate is last year’s tax revenue spent, plus 8%. Why should you care about it?If your taxing unit wants to raise taxes above the rollback rate, you have the power to stop them.

You, in other words, have the power to limit the rise of the tax rate on your property taxes.

First, create a petition. It must include specific legal wording that your attorney will be able to help you with. It must be signed by 7-10% of the registered voters (the specific percent depends on how many dollars are collected in taxes).

Next, present the petition to the taxing unit’s governing body within 90 days of adopting the higher tax rate.

Last, If the petition is valid, an election will be held where voters can choose the rollback rate or the higher tax rate. Should the rollback rate be chosen, that rate will be put in place immediately.

I can only imagine a few, rare, extraordinary situations where the people would choose a higher tax rate. The hardest part of this whole scenario is getting the 7-10% of voters to sign the petition. But remember, this is only 7-10% of registered voters. It’s estimated that only about 70% of the adult population is registered. When all is said and done, this works out to about 5 of every 100 adults in your area that need to sign the petition.

You will know when the governing body is trying to raise the taxes above the rollback rate because they are required by law to inform the public by at least a ¼ page in the local newspaper.

Keep your eye out, stay informed, and take action if your governing body is trying to raise your property tax rates.

Property Tax Basics: the Official Document

Published by Research Editor on July 28th, 2011 - in Taxes, The Basics

official basics of property taxes

Texas Flag
Property Tax Basics is a 33 page document from the Comptroller of Public Accounts. It’s a ver

y useful document and I recommend you flip through it. If you like to have all the basic information in one tangible place, this docu

ment is for you.

The language, as befitting a government document, is occasionally a bit thick, but not as bad as you might expect. It’s not the Tax Code or anything like that.

And the calendar is for 2010, but you can get the 2011 Property Tax Calendar here.

The Property Tax Basics document gives basic information on property taxes, how they work, and how to protest–the same things we cover on this blog, only more official, since the document comes straight from the Texas State Comptroller of Public Accounts, not via your humble FYP LLC Research Editor.

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What is a Rendition and Do I Need to Make One?

Published by Research Editor on July 28th, 2011 - in Taxes

A rendition is a report of your taxable property, sent to your appraisal district. A rendition is a form that identifies and describes your property.

Do I need to submit a rendition?

Are you a business owner? You must report your personal property on a rendition.

Does your property produce income? You must report it on a rendition.

None of the above? You can submit a rendition if you like, but it is not required.

Advantages

If I’m not a business owner and my property does not produce income, are there any advantages to submitting a rendition?

“If you file a rendition, you are in a better position to exercise your rights as a taxpayer,” according to the website of the Comptroller of Public Accounts.

A rendition includes your opinion of your property’s value. When you submit it, your opinion is on record with the district.

If the appraisers then place a higher value on your property than you did, they must send you notice.

How do I submit a rendition?

You can find the rendition forms online. Submit them after January 1 and before April 15.

Renditions are kept confidential.

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What Mass Appraisal Means for You

Published by Research Editor on July 28th, 2011 - in Protest, Taxes

Does your property tax seem too high? In all likelihood, the appraisers didn’t look at your property specifically as they assessed taxes.

In an appraisal method called mass appraisal, the district gathers detailed information on the property, then puts it in a group with similar properties, based on factors like size, use, and type. Computer programs help with categorizing properties.

The appraiser takes a typical property from that group of similar properties and then figures out the value–and thereby the property tax. How your property compares to the typical property in age or location then determines your property’s value.

Whenever you deal with stereotypes and the “typical” anything, there’s always room for unique situations. If your property is overvalued, it may be inadvertently caused by mass appraisal. Consider protesting the overvalue to lower your property taxes. In the meantime, a property tax loan might help you.

Property Appraisal: the Basics

Published by Research Editor on July 28th, 2011 - in Protest, The Basics

Before your county or taxing authority can tax your property, they must know how much your property is worth. Appraisal is the process of determining your property’s value.

You have the right to have your property correctly appraised: your property cannot be taxed significantly differently from similar properties in your area.

But how does this appraisal process work? Should you be watching out for some Man From the Government in a black suit and bowler hat slinking around your backyard?

Three Methods

No, our tax money does not pay for mysterious government agents to visit every single piece of property. Instead, three common methods to value property are:

  • Market Data Comparison
  • Income
  • Cost

Market Data Comparison

This is by far the most common method of appraisal for residential property. The tax authority looks at the selling prices of properties similar to yours. Did your neighbor just sell his home for $100,000? Same with the other people in your neighborhood who recently sold homes? If their homes are about the same as yours, your home will be valued at $100,000.

This gives you a good opportunity if you feel like you’re taxed too much. When protesting your appraisal rate, look at the market value of the properties around you.

To compare your home’s appraisal to others, look for homes similar in location, lot size, improvements, age, condition, access, amenities, views, easements, deed restrictions, and legal burdens affecting a property’s ability to be sold.

Income

For properties that make money–like offices, hotels, or retail stores–the income approach to appraisal looks at how much money an investor would be willing to pay for this property as he or she anticipates future income from the property.

In other words, for an office that generates $1 million in income each year, how much would an investor pay to own that office? That amount is the appraised value.

Cost

Some properties are not sold frequently or–like new buildings–are still under construction and therefore have no data on anticipated income or market comparison. For these, the cost method of appraisal is used. The appraiser calculates how much it would cost to replace this property with one equally useful.

Protesting Appraisal

Over-appraisal (making your property taxes higher) is forbidden by law, so you have the right to protest.

To protest your appraisal, look at our post series on how to protest your property’s value.

Video: How to Protest Property Taxes

Published by Research Editor on July 28th, 2011 - in Protest, Taxes

If you are not satisfied with your property taxes, you can protest them. The state has prepared a slideshow to walk you through the process. The 24 slides are searchable, and the notes section has the narrator’s words written out.

The slides are titled:

  1. Slide 1 (introduction)
  2. Notice of Appraised Value
  3. What do You do Now?
  4. The ARB
  5. What Can You Protest?
  6. Filing a Protest
  7. What to Expect?
  8. What to Expect? (cont.)
  9. Preparing for the ARB Hearing
  10. The Hearing–What to Expect
  11. Protest Hearing Rules
  12. Prepare Your Evidence
  13. Value Evidence
  14. Value Evidence (cont.)
  15. Presentation of Evidence
  16. Presentation of Evidence (cont.)
  17. Be Persuasive, Not Emotional
  18. Be Persuasive, Not Emotional (cont.)
  19. Burden of Proof
  20. Closing or Rebuttal
  21. ARB Reaches a Decision
  22. What Now?
  23. Evidence Checklist
  24. Conclusion

What further questions do you have about protesting property taxes? We’ll cover protesting property taxes more in an upcoming article series.

© 2013 FYP, LLC.