Midland homeowners will probably be paying a higher property tax bill in 2018, but not for the reason you might think. We take a look in this week’s news roundup. (more…)
Midland homeowners will probably be paying a higher property tax bill in 2018, but not for the reason you might think. We take a look in this week’s news roundup. (more…)
Midland and Odessa ponder property tax rate increases, Odessa police warn about a phone scam, and Midland ISD will be sending a giant chunk of change to the state next year, in this week’s news roundup.
If a Tree Falls …
Midland city officials threw a public hearing, and nearly nobody came.
The Midland Reporter Telegram reports that a hearing regarding the proposed city tax rate for the upcoming fiscal year was planned for the evening so that more citizens would be able to attend, but it wasn’t attended any better than previous meetings held during the day.
The city held three public hearings, and only two people spoke cumulatively at those hearings.
The proposed tax rate is $0.408389 per $100 valuation – an increase from the current effective The general fund budget for the next fiscal year is $111.8 million, an increase of $5.361 million.
Meanwhile, Odessa is mulling over its first tax rate increase in 15 years.
The Odessa American reports that while the city council has not made any changes yet to the proposed $86.6 million general fund budget, or voted on a property tax rate, the measure was supported by three councilmen and Mayor David Turner.
The Odessa Board of Realtors argues that homeowners and tenants would be adversely affected by a combination of property tax increases – city and school – as well as a potential school bond election and increased insurance rates.
The proposed property tax rate is about 49.3 cents per $100 valuation – an increase of around $43 per fiscal year for someone with a $150,000 home, the newspaper said. The proposed general fund budget for the next fiscal year increases spending by about 3.3 percent over last year.
A public hearing is scheduled for Sept. 12, and the final vote on the tax rate is slated for Sept. 26.
Community Development Scam Hitting Odessa Residents
Odessa police said several residents have called after receiving phone calls from someone claiming to be awarding community development funds.
NewsWest 9 reports that one victim said she received a phone call from someone who said his name was Patrick Elliott, who said she won an award from the Community Development Organization. The call came from a Chicago area code. She was then told to receive the funds, she would need to wire $500 to a Debra White in Guntersville, Ala.
OPD recommends that anyone receiving a call from someone with Community Development Organization not send any money, or provide personal information. If there are more victims or near victims, they are encouraged to call Odessa police.
Midland ISD Could Give Up $61M to Recapture
Midland ISD found that it will be sending a recapture payment to the state to the tune of $61 million during the 2018-2019 school year, the Midland Reporter Telegram reports.
The figure represents a nearly $20 million increase from the 2017-2018 payment of $42.138 million.
Recapture is part of the long-detested Robin Hood system of school funding in Texas. Recapture payments are collected from districts with bigger property tax revenues and distributed to districts with lower revenues.
More than 400 districts are subject to recapture, and collectively they send more than $1.5 billion back to the state for distribution.
Midland’s recapture payment next year will account for almost 28 percent of the district’s revenues. The district expects to be at a deficit in 2018-2019, largely because of the payment. The excess will be covered by the district’s $43.4 million fund balance.
In this week’s news roundup, we talk Midland ISD property taxes, Ector ISD’s TEA improvement and a change in leadership with the West Odessa Volunteer Fire Department.
Midland ISD’s 2016 Tax Rate Decrease Comes Back to Haunt Budget
A decision to lower the rate on a portion of its property tax last year now has the Midland ISD Board of Trustees back at almost square one. (more…)
The end of sales price non-disclosure might be near, if the suit filed by the City of Austin against the Texas comptroller’s office is any indication. Austin Mayor Steve Adler, who submitted the 10-page suit on Monday, argued that the ad-valorem taxation system is unconstitutional because it isn’t “equal and uniform.”
Texas is one of the few states that, instead of relying for sales figures for tax purposes, employs an appraisal system. However, with skyrocketing values for residential properties in Travis County, commercial valuations haven’t grown nearly so much. It’s becoming a big problem, the suit suggests.
“The lack of sales disclosures has made it nearly impossible for appraisal districts to comply with their statutory and constitutional duty to assess all properties at market value so that taxation is equal and uniform,” the lawsuit states.
You have a few more days to protest your property taxes, then it’s all over for another year. While he sifts through the late-comers who decide they need a pro to help them lower property values before the May 31 deadline, I asked Rob Wheelock to give us the low down on property tax rates across North Texas. I knew that life in the Park Cities was a pretty good deal — low taxes and great schools. No wonder those property values barely dip! Live in Preston Hollow, pay .79700 per $100 valuation, and oh yes, send your kids to private school. Another shocker: Irving FCD1 has the highest property tax rate. No wonder Tony Romo is moving to North Dallas!
PS: One of my North Dallas properties got a smidgen of an increase, but I am sending it to Rob to nip right in the bud!
Here is the North Texas property tax rate low down, 4 days and counting ’till you can protest no more:
“There are several entities that make up the total property tax rate depending upon where you live. Everyone in Dallas County pays County and School Equalization at the 2012 rate of .253037% and Parkland Hospital and Dallas County Community College District at the 2012 rate of .390375% for a combined total of 0.643412%, but then there’s City and School taxes plus a few Special Districts. Those vary, and the difference can be significant. To give you an idea, I’ve highlighted a few below;
|City||Estimated Tax Rate 2013|
|School||Estimated Tax Rate 2013|
*Plano is in Collin County
As you can see, the Park Cities enjoy a lower rate on both city and school taxes than other neighborhoods. Highland Park has the lowest city tax rate in the County, but property values are among the highest. Wylie has the highest city rate at 0.8889, with Lancaster and Cockrell Hill close behind.
On School taxes, again Highland Park ISD has the lowest rate in the County at 1.1342, with Grand Prairie and Irving having the highest school tax rate at 1.465.
So what’s all that really mean? Let’s take a look at a home valued at $1,200,000. Assuming the property is your Homestead (which gives you a 20% reduction), if it was in Preston Hollow or anywhere in Dallas ISD you would be paying $26,212.48 in property taxes. In University Park your tax bill would be $19,735.39 and in Highland Park $19,174.27. In Plano you’d be looking at paying $22,384.71.
The highest tax rate in Dallas County belongs to property owners in the Irving area that are part of the Dallas County Flood Control District #1. Their total rate is a whopping 5.757012. That same $1,200,000 home owner in this area would be paying $55,267.31. Remind me not to move into that neighborhood!
(Editor’s note: Geeze Louise!)
On a different subject, homeowners that are over 65 and are considering downsizing need to remember to transfer their Over 65 Homestead Exemption from their old home to the new one. It’s something I’ve seen several people forget and could cost you thousands of dollars. When you turn 65 your school taxes basically freeze at that dollar amount, as long as you don’t make improvement to the property. When you move, the percentage savings can transfer to the new property, but only if you request it.
Property taxes are high in Texas, but remember, we don’t have a State income tax.”
(Editor’s note: yeah, yeah yeah.)
If you have any other property tax questions or would like to have your property taxes monitored each year, please call me at 214-212-6910 or contact me at [email protected] . For more information visit www.PropertyTaxManagers.com
For many, a home is their biggest single investment. So why NOT do what the big boys do and scrutinize every expense on your home, from repairs and maintenance to property taxes? We reached out to Rob Wheelock for a sneak peak at how the pros keep those taxes down.
CD: Rob, are you telling me that owners of commercial properties look at their appraisals every year?
Rob:Yes, at least the biggest majority of them do. Commercial is different from residential, in that there are no exemptions or caps, which leads to some potentially large swings in value. I work with Alliance Tax Advisors in business development and every once in a while, I’ll speak to an owner that hasn’t used a consultant, but for the most part, all the big boys use someone. It’s just smart business. Remember the three methods of appraisal the Appraisal Districts use:
1. Sales Approach (the price at which a property would transfer for cash or its equivalent under prevailing market conditions).
2. Cost Approach (Preferred method for special use properties, new construction, limited sales data, or limited income data).
3. Income Approach (Capitalization rates based off net operating income).
Licensed Property Tax Consultants look at all three approaches and work the one that produces the lowest valuation. Let’s say you own a small strip center with three tenants and one tenant moved out and their space has been sitting empty for 6 months. A Tax Consultant would probably look at the income approach because income would be down for the year, which leads to a lower valuation.
CD: Smart. But at what cost point in a residential property is this cost-effective?
Rob: I say there’s no amount too small to save, so I would have my valuation looked at every year, regardless of the value. Property Tax Managers works on a contingency basis and looks at every opportunity to find savings. We have a client that lives behind the Pink Wall in a small condo that was valued at $79,450 last year that we were able to reduce to $36,320 saving her $998 in property taxes. Not bad. And the good news is, they left her alone this year, so she’ll save another $998. Since she has a Homestead Exemption, the most they can increase her value in any year is 10%, so she will be saving for a minimum of 8 more years. Bottom line is, why pay more than your fair share, if someone like us will do all the work for you? Our service shouldn’t be viewed as a cost; we save our clients’ money. It only cost them money if they don’t use our services. Maybe I’m cheap (OK, I know I’m cheap), but I’d rather save money than pay more than my fair share.
CD: I concur! Don’t get me started! What are some other tricks we can learn from the commercial guys?
Realize there are others who knows more about the property tax code, appraisals and valuations than a typical developer/investor. Utilize the professional services available that help bring value and savings to your bottom line. Realize that you are not a licensed property tax consultant, and that a trained team, that works billions of dollars in property values, will always out perform an individual, and save you time and money in the process.
I have to give a plug to Alliance Tax Advisors where I work in business development. This year they will review over $24,000,000,000 (yes Billion) in assets, saving developers and commercial property owners millions of dollars. If commercial property owners leave it to the pros, why shouldn’t a home owner?
We welcome our new Tax Doctor on Candy’sDirt.com, Rob Wheelock of PropertyTaxManagers.com. (His ad is on this page, click on it and wander over to his website.) Rob is a tax fighting veteran with more than 10 years of experience who also works on special assignment for the Texas State Comptroller’s Office as an Arbitrator, settling property tax disputes between property owners and Appraisal Districts throughout the State. So he definitely has “an inside edge”. He will be here throughout the next couple crucial tax rendition weeks to help you whittle that tax bill down as much as humanely possible.
CD: Rob, there is always good news and bad news. Our property values are going up in Dallas but that means, our property taxes be may heading north, too. Have you seen any evidence that valuations are jumping this year?
Rob: Notices of Appraised Value are just beginning to hit property owners mailboxes and an early review shows pretty mixed results. After several years of declining values the DFW area has turned around and the slide in values is over. Most properties that were revalued in 2013 will remain the same or show a slight increase. I haven’t seen any valuations that declined, but have heard many did. The ones that did increase, seemed to get tagged pretty hard. I’ve seen several with 15%+ increases, but so far for the most part there running in the 5% to 8% range.
CD:What areas of town do you think will be hit the hardest?
Rob: The Dallas County Appraisal District is responsible for 4500 residential neighborhoods, and by law, have to reappraise each property every three years. They do that by working a portion of each area (approximately 1/3) each year rather than trying to do the whole area at once. According to DCAD, this year out of approximately 642,000 properties, approximately 140,000 properties will see a decreased value, 415,000 did not change, and about 87,000 will see an increase. There’s no data available to indicate which areas are hit or missed, but from what I’ve seen it’s real spotty. I think if you protested in the past couple of years you are more likely to see an increase to bring your property back up and in line with those who failed to monitor and protest their values. I have a couple of properties in Highland Park that received increases of over $500,000, that we had worked down in 2011 and 2012.
CD: OK, so what, if anything, can homeowners do?
Rob: I recommend that every property owner have their valuation looked at every year by a professional that knows the Tax Code and the system. Way too many property owners get their Notice and put it aside to check on later, but don’t check on it in time to file a protest. If you fail to file a protest by the deadline, you’re stuck with the proposed value for another year. By allowing a licensed property tax professional to handle it there’s no more missing the deadline, or wondering if you’re paying more than your fair share. We work on a contingency basis so there’s no fee earned unless we save the property owner something.
CD: Should we call you the moment that notice comes in the mail?
Rob: Yes, but we’ve tried made it even easier than that! Our goal is to become the property owners’ Property Tax Watchdog. Sign up once, and we will monitor the valuation each and every year, comparing the proposed valuation with recent sales and neighboring properties using aggressive appeal strategies to save our clients’ money. Commercial property owners have been doing this for years and it make good sense. Most high end properties have used the services of property tax consultants for years. We want to bring that same service to all property owners.
CD: So our property tax moniroing would be on autopilot?
Rob: Yes. Also, the Appraisal District does not mail out Notices of Appraised Value unless the value increases. Just because you don’t receive a notice doesn’t mean your property is valued fairly. You still need to have a professional Property Tax Consultant review and monitor your value.
CD: OK so my house didn’t go up this year, does that mean I’m in for a double whammy next year?
Rob: Some properties were reappraised and didn’t go up. Section 25.18 of the Property Tax Code states that the Appraisal Districts have to reappraise all real and personal property in the district at least once every three years, so you may get lucky and get skipped again next year. Then again, maybe not. If sales continue at their current pace, the appraisal districts will have more reasons to increase valuations next year.
I’ll bet Jenna Bush Hager and her cute hubby, Henry, sure wish they had bought a place in Dallas. They would get a bigger home to bring home baby Mila, and mom and dad would be nearby. Instead, because of work, they bought a cute townhome in the Federal Hill area of Baltimore back in 2008, shortly after they married. They tried to sell the 3 bedroom, 3 bath historic home that dates back to the 1880’s in late 2010, to no avail They lowered the price to $449,000, only $9,000 more than they paid, according to Curbed. Still no action. So they did what any smart young couple does who wants to move to New York but owns real estate: they leased it.
Lo and behold, intrepid reporters at The Baltimore Sun decided to go all out “Woodward and Bernstein”-style: they discovered that Jenna and Henry were still getting a homestead exemption on their property taxes for owning the house, even though they had moved away. Get this:
That month, The Sun reported that the couple had moved out of their end-unit home in the 1300 block of S. Charles St. after 21/2 years and put it on the market. Days later, The Washington Post reported that the Hagers had decamped for New York so Jenna could be close to her twin sister, Barbara, and the “Today” show, where she’s a correspondent. Tax-credit activist Matt Gonter quickly alerted state assessors to the development. A month later, though, Henry Hager notified the state assessments agency in writing that the house was still the couple’s residence, Charles said. In an interview, Hager said that until July of last year he was living in the house during the week working at Constellation Energy and traveling to New York on weekends to be with his wife.
But then, oops: when the new tax year began, the Hagers got their tax break of a whopping $296, a break they should not have “enjoyed” because the house was now a rental.
“That is an honest mistake on my part,” said Hager, adding that he called the state assessments agency Monday trying to set things right. “I wasn’t familiar enough, quite frankly, with the tax credit and its existence. I’ll repay whatever I owe.”
That $296 is really going to plump up the Maryland economy. All this complication with property taxes is enough to drive a young person to rent!