Your Money

How Property Taxes Work in Harris County

Your tax bill has 5 to 7 line items. You can fight every one of them.

Most people who protest their property value get a reduction. Here is how.

When you get your property tax bill, it looks like one big number. It is not. It is 5 to 7 separate taxes from different government entities, each with their own tax rate.

Here is what is on a typical Houston homeowner's bill:

- City of Houston: funds police, fire, streets, parks - Harris County: funds sheriff, flood control, roads, courts - Houston ISD (or your school district): usually the biggest line item -- funds public schools - Houston Community College: funds community college system - Harris Health (Hospital District): funds the public hospital system including Ben Taub - Port of Houston Authority: funds the ship channel and port operations - Sometimes: MUD (Municipal Utility District) or TIRZ (Tax Increment Reinvestment Zone)

Each entity sets its own tax rate. Your total tax bill = your assessed property value x the combined rate of all entities.

The Harris County Appraisal District (HCAD) determines the market value of every property in Harris County every year. They do this by January 1.

HCAD uses 3 methods: 1. Comparable sales: what similar homes in your area sold for recently 2. Cost approach: what it would cost to build your home from scratch minus depreciation 3. Income approach: for rental and commercial properties, based on rental income

In April, HCAD mails you a Notice of Appraised Value. This is not your tax bill -- it is what HCAD thinks your property is worth. Your tax bill comes later, after all the taxing entities set their rates.

If HCAD's number looks too high, you can protest. More on that below.

If you own your home and it is your primary residence, you qualify for a homestead exemption. You must apply -- it is not automatic.

What you get: - $100,000 off your assessed value for school district taxes (state law) - 20% off your assessed value for other taxing entities that offer it (varies) - A 10% cap on annual increases in your assessed value (your market value can go up more, but your taxable value can only increase 10% per year)

How to apply: 1. Go to hcad.org 2. Download the homestead exemption application (Form 50-114) 3. Attach a copy of your driver's license showing your home address 4. Mail or upload it

You only apply once. The exemption stays until you sell or move.

Deadline: April 30 for the current tax year. But you can file up to 2 years late and get retroactive credit.

If you are 65 or older, or if you have a disability, Texas law gives you additional protections:

- School tax freeze: your school district taxes are frozen at the amount you paid the year you turned 65 or became disabled. They never go up, even if your property value increases. - Additional exemption: $10,000 off your assessed value for school taxes, on top of the $100,000 homestead exemption - Tax deferral: you can defer (delay) all property tax payments until you sell your home. Interest accrues at 5% per year, but no penalties or foreclosure while you live there. - Surviving spouse: if your spouse was receiving the over-65 freeze and passes away, you can continue the freeze if you were 55 or older at the time.

Apply at HCAD with proof of age (driver's license) or disability (SSA letter).

Most people who protest get a reduction. Here is the process:

1. File a protest by May 15 (or 30 days after your notice, whichever is later). File online at hcad.org or mail the form.

2. Informal hearing: HCAD will schedule a phone or in-person meeting with an appraiser. Bring your evidence: - Recent sales of similar homes in your area (check hcad.org or Zillow) - Photos of any damage, deferred maintenance, or problems that reduce your home's value - A recent appraisal if you have one - Your home's condition vs. what HCAD has on file (check for errors -- wrong square footage, extra bathroom they think you have)

3. If the informal hearing does not work, you go to a formal hearing before the Appraisal Review Board (ARB). This is a panel of 3 citizens. You present your case. HCAD presents theirs. The panel decides.

4. If you still disagree, you have 3 options: - Binding arbitration ($550 fee, refunded if you win by a certain amount) - District court (more expensive, for high-value properties) - State Office of Administrative Hearings (for properties over $1 million)

The whole process is free through the ARB stage. No lawyer needed.

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