Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.
Q. I hear property tax rates may go down in the Dallas-Fort Worth area, yet the word isI may actually end up paying more. How is this possible?
A. The property tax rate in the Dallas area is set to go down to 22.8 cents per $100 of assessed property value, from 23.9 cents last year, according to the county government.
The Dallas County Commissioners Court approved the rate Wednesday, with the fiscal year set to begin on Friday.
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Although the rate is the lowest it has been in 11 years, the county is set to collect more in property taxes next year.
“This budget will raise more revenue from property taxes than last year’s budget by an amount of $29.4 million, which is a 5.13% increase from last year,” according to the 2021-22 budget.
That’s because property values have risen.
The median price of a residence in the Dallas, Fort Worth and Arlington area was $349,381 in the second quarter, a 22.4% jump compared to the same time last year, according to the most recent data available from Texas Realtors, the largest professional group in the state.
That means higher home values—and property tax appraisals—for existing home owners as well, and government officials are taking notice.
In 2019, Texas Gov. Greg Abbott signed a bill that caps annual revenue increases in municipalities to 3.5%, with some exemptions for new infrastructure projects. Voters would have to approve an increase over that 3.5%, according to Jim Popp, a partner at the Austin, Texas-based law firm Popp Hutcheson.
Other Texas politicians have made lowering property taxes a priority.
A bill that would provide about $200 of tax relief for all homeowners in Texas passed the state Senate last week. The bill allows for part of state revenue in excess of $8.35 billion to help lower school tax rates.
The state’s House of Representatives is now considering the bill. If passed, the savings would be available in the 2022-23 fiscal year.
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