Are you a Texas homeowner looking for information about property taxes? Look no further! In this blog post, we’ll be exploring everything you need to know about Texas property taxes – from how they’re calculated to how you can reduce them. Whether you’re a longtime homeowner, a new homeowner, or just curious, this post has all the information you need to understand Texas property taxes. So, let’s dive in!
Property Taxes
In the Dallas Fort Worth area property taxes are comprised of County taxes, City Taxes (unless you’re outside city limits), school taxes, and a variety of other small ones depending on where your home is located.
For the most part, if you buy in Dallas – Fort Worth and its immediate suburbs you will probably have a property tax rate of 2-3% of your property’s value. The average is close to 2.7%
Let’s run through an example.
4021 Dakota Trail, Lake Worth, Texas 76135 – Purchase price $285,000
You can go to the county tax assessor’s website, in this case, Tarrant County, and look up the entities that make up the property taxes and the total property tax rate. (2.4604%)
Doing some simple math the taxes for the following year would be… $285,000 x 2.4604% = $7,012.14 or ~$585 per month.
Property Tax Exemptions
In most cases, there are many different exemptions you can file to reduce your property taxes. To get the exemption you simply fill out the corresponding form and submit it to the county tax assessor. Here is a list of exemptions for Tarrant County.
More than likely you will be able to add a homestead exemption to your property if you plan to live there. In our example, this would be $40,000.
If you are over the age of 65 the Lake Worth ISD gives a $50,000 exemption.
Let’s say you add both of these exemptions. From the example above we would have
($285,000 – $90,000) x 2.4604% = $4,797.78 or ~$400 per month.
Property Tax Loopholes
With anything the government runs, there are always inefficiencies. In 2022 this property was assessed at $197,001.
Let’s say that you purchase this property and put a homestead exemption on it. While they can reassess the value of the property, they can only raise the taxes you pay by 10% per year. This is a big advantage if you buy and renovate a house. Continuing our example ($197,001 – 90,000) x 0.024604% = $2,632.65 or $219.38 per month
Calculating out a 10% increase each year this is what your monthly would look like each year. This could be a significant break over a few years.
Year 1 $219 / mo.
Year 2 $241 / mo.
Year 3 $265 / mo.
Year 4 $291 / mo.
Year 5 $321 / mo.
Texas Property Tax Summary
Living in a place like Granbury you could see property taxes as low as 1.6% whereas living in a suburb of Dallas Fort Worth you could see 3%. On a $300k that means your property taxes could be as high as $750 per month or as low as $400 per month before exemptions.
Calculating Monthly Payment
I recommend using https://www.mortgagecalculator.org/ to calculate monthly payments. A quick example:
- $400k purchase price
- 25% down
- 6.5% interest rate
- $2000 / year for homeowners insurance
$2,062 / month before property taxes
If you still have questions about Texas property taxes, please do not hesitate to reach out to us by either giving us a call or filling out our contact form. We are more than happy to answer any questions you may have!
