Here’s three ways to save money on your property tax bill in Austin, Texas. Â If you’re an Austin homeowner or you’re thinking about moving to Austin, the reality is you’re going to have high property taxes. Austin is the most expensive city in Texas. And as a result, our property taxes are going to be higher than other cities around the state.
Here’s three things you can do to reduce that overall costs. The first thing is that if you’re a primary resident, meaning that this is the main home that you live in and it is not an investment property. You can file a homestead exemption. You can do this by going to your county appraisal district website, most of them have an online form that you can fill out, you only need to fill out the exemption in one time and it saves you roughly 20% on your overall tax bill. So to put it in perspective, if your property tax assessment is $500,000, you will get taxed as if your home is only worth 400,000. Now on top of that, if you are over 65, or you’re a disabled veteran, you can apply for specialty exemptions, which can give you even a bigger discount. A homestead exemption also puts a cap on how high the county can raise your taxes every year. So you’re capped at a 10% increase every year. If you’re an investor, you don’t have that cap. So when prices started to go up drastically in 2021, it hurt a lot of our landlords because their taxes went through the roof. So as a result, we saw an increase in rent or a lot of landlords selling their homes and investing elsewhere.
Now the second thing that you can do is to protest your taxes every year. So even with your homestead exemption, if your taxes have stayed the same or they went down, we still protest every single year. And we’ve been successful, I think there was only one time in the last eight years that we’ve owned our home where our tax bill didn’t go down. But we always protest, you can do it every single May, by going to that same appraisal district website and filing a protest. Now there’s a couple of different ways you could do this, you could do it by yourself, it’s a little more time-consuming and tedious and you may need the help of a realtor to help you figure out the sales data. But basically, you can find comps in your neighborhood that would show a lower value, and then set up a time to go to the appraisal district and protest your case in front of them to try to get that lower rate. What we typically do just because it’s so much easier and saves time is we hire a third-party company to do the protesting for us. So we’ve used several different companies, we’ve got a couple that people are really happy with that we can recommend. And they only charge you if you are successful, and they’re able to lower your tax bill.
Now the third thing is when you’re first shopping for a home, be mindful of the tax rate of where you buy. The tax rate varies all over the city. Generally, newer construction communities have higher tax rates, we’ve seen some as high as 3.15%. A lot of times, that’s because you’re paying for the infrastructure, building all the roads, the water and so on. Older more established communities generally have lower tax rates. But it’s possible to also get a newer construction community that where they were able to tie into existing water lines, and so they don’t have those extra high tax bills. So we can help clients shop by tax rates. So if you don’t want to be up in the threes, or you know the high twos, we can say let’s find you something that’s two and a half percent or under and that can make a huge difference for all the years that you own the home. In our opinion, why not pay for a little more house and a little less taxes?
If you have questions about property taxes in Austin, shoot us an email.
