Recently I was asked to explain some large differences in the reported property taxes on the MLS form of some homes.  As you may know, Texas has no personal income tax and so the majority of funding for schools and government comes from property taxes.  Thus, property taxes can be a major issue when shopping for a home. 

The rates vary between taxing districts (the Bexar County Tax Office collects taxes for 43 taxing entities) but a good rule of thumb for Bexar County is about three percent (3%) of the new purchase price.  This can be confusing because a home listed for sale in the MLS for $200,000 may only show $3,000 in property taxes.  Remember, the MLS is reporting the CURRENT property tax situation on the home.  The home may not have been re-appraised in some time and may have tax exemptions (see below) that you may not qualify for when you purchase the property.  If the home is purchased, a new valuation will be assigned by the Bexar Appraisal District based on the sales price less any exemptions.

Exemptions reduce the taxable value of your property.  This lowers the tax amount.
Some of these exemptions are:

• Residence Homestead Available for all homeowners who occupy and own the residence as of January 1 of the tax year.
• Disabled Homestead can be taken in addition to the homestead exemption; available to those who qualify according to specific guidelines. Generally, this means disabled to the extent that the applicant is unable to obtain gainful employment.
• Disable veteran or survivor can be taken in addition to the homestead exemption in accordance to the applicants disability rating established by the Veterans Administration. This exemption can be taken on any property in Texas; it is not limited to the homestead property.
• Age 65 or Older can be taken in addition to a homestead exemption on their primary residence effective in the year they become 65 years of age or the year they acquire the property.

Some jurisdictions have limitations of taxes on homesteads of the elderly or disabled. These are commonly called "tax freezes." Taxes are limited to the amount paid on the homestead in the qualifying year plus the value of any additions to the property made after the qualifying year.

These limitations currently exist for all school districts. The limitation is also effective for the Flood Control Fund, Alamo Community College, Bexar County, City of San Antonio, Shavano Park, Leon Valley, and Live Oak.

You may defer or postpone paying taxes on your homestead if you are 65 years of age or older or disabled for as long as you occupy the residence. A homeowner must file a deferral affidavit with the Bexar Appraisal District. The deferred status only postpones the liability and therefore does not cancel the tax obligation. Interest accrues at the rate of 8 percent per year. Once a property owner no longer lives or owns the home, past taxes and deferred interest become due after the 181st day.    
    

So, when home shopping, be careful that you do not base the taxes you will be paying on what is currently reported.  Rather, take the three percent of the sales price as a rule of thumb or call the Bexar Appraisal District at (210) 224-2432 and they can give you a more exact figure based on the property address, sales price, and any exemptions you may qualify to have.

Christina Whipple
Alamo Home Team
www.AlamoHomeTeam.com
Christina@AlamoHomeTeam.com