The State of Texas does not have provisions for state property tax. Instead, the Texas constitution and statutory regulations allows local governments to set and collect property tax.
Texas mandates taxing units to offers various total (absolute) or partial property tax exemptions from values of appraised property. Below is an overview of the findings.
How are Property Tax Calculated in Texas?
In essence, property taxes are local taxes that are used by local governments to pay for streets, schools, fire protection, law enforcement, and schools, among other local services.
The calculation of property tax in Texas is a complicated process involving several local government entities. Each county has an appraisal district that determines the property value through the chief appraiser.
All dissatisfied property owners can file their appeal with the appraisal review board which can either revise or maintain the value. In case the property owner is still dissatisfied, he can arbitrate further through the court process.
All local governments in Texas are required to allow between May and July for appraisal arbitration. The final appraisal amounts are determined after tax exemptions are subtracted.
Thereafter, tax rates are adopted by county governments. Local taxing units (including county governments, junior colleges, school districts, cities, and special districts, among others) determine the minimum amount needed for the uninterrupted provision of public services within a financial year and property tax rates are set based on the budgets of the taxing units.
What are some exemptions to Property Tax Payments in Texas?
Texas mandates taxing units to offers various total (absolute) or partial property tax exemptions from values of appraised property. The former exemption excludes the entire property from being taxed while the latter reduces a fixed dollar amount or a percentage of the appraisal amount.
The state sets certain mandatory exemptions but allows the taxing units to decide locally whether to offer some exemptions (local option). Local official also extend certain exemptions to "solar and wind-powered energy devices" and charitable businesses and organizations.
Here are some of the more common property tax exemptions:
School districts in Texas are mandated by statutory laws to provide a "$25,000 exemption on residence homesteads." Also, taxing units collecting flood control or farm-to-market taxes are mandated to provide a $3,000 on residence homestead tax. Additionally, taxing units are allowed to decide locally whether to provide a "separate residence homestead exemption of up to 20% of a property's appraised value."
Disabled and/or Senior Citizens
School districts in Texas are mandated by statutory laws to provide an additional $10,000 tax exemption from the appraised value of residence homesteads owned and occupied by disabled citizens and/or persons aged over 65 years. Additionally, taxing units are allowed to decide locally whether to provide a separate residence homestead exemption of not less than $3,000. This exemption applies to a surviving spouse as long as they are aged over 55 years.
Texas statutory laws allow partial exemptions for any type of property owned by "disabled veterans and surviving spouses and children of deceased disabled veterans." Also, residence homesteads that are donated to disabled veterans by charitable organizations are eligible for partial exemptions.
The exemption amount is dependent on the percentage of service-connected disability, for example, a person eligible to 100% disability compensation, or is rated 100% disabled, or is considered 'unemployable' due to service-related disability is eligible for a 100% exemption. The exemption extends to an unmarried spouse of a disabled veteran. Unmarried surviving spouses of U.S. soldiers killed in action are eligible to absolute exemption on residence homestead taxes.
Active Military Personnel
While there is no special provision for tax exemptions for active military personnel (unless they meet they aforementioned criteria), they are not charged any penalties or interests on delinquent payment of property taxes if they were serving on active due at the time the tax was due.
What are the different payment options for the Property Tax Payments in Texas?
- Taxing units in Texas are allowed to offer discounts to property owners who complete their tax payments early. Two types of discounts are allowed: 3-2-1 or October-November-December.
- The 3-2-1 discount is allowed if a taxing unit mails the tax bills after September 30. A 3% discount is allowed if the property tax is paid "before or during the next full calendar month following the date the tax bills were mailed." 2% and 1% are allowed discounts if the property taxes are paid within the second and third calendar months.
- The October-November-December discount allows taxing units to offer 3%, 2%, and 1% discounts if the taxes are paid within October, November, and December, respectively, regardless of the mailing date.
- Texas statutory laws allow all the aforementioned persons who qualify for property tax exemptions to pay their taxes in four equal installments without no interests or penalties. First installments and requests for installment plans should be made before the set delinquency dates.
- Additionally, business and residence homestead property taxes can be paid in four equal installments if they are within a disaster area and have directly suffered damages due to the disaster.
- Texas statutory laws allow taxing units that collect their own taxes to allow property owners to pay in two installments: the first half by November 30 and the second half by June 30 the next year.
- Texas statutory laws allow property tax collectors to accept partial payments. However, acceptance of partial payments does not change the predetermined delinquency dates and interest and penalties are charged on any portions that are unpaid after the delinquency date.
Pay your Property taxes in Texas online here.