Thursday, May 2, 2024
Following the skyrocket of home appraisals in Texas, citizens might be left wondering how much they will pay in property taxes this year.
As of Sept. 12, local tax authorities have approved the budgets and corresponding property tax rates for the 2023-2024 fiscal year. In order not to raise taxes, Coryell County Tax Assessor Collector Justin Carothers explains that tax authorities must establish a rate that produces the same revenue as last year based on the new value of properties assessed by the Coryell Central Appraisal District. This calculation is also known as the no new revenue tax rate.
“If (property) values go up, then rates must go down to raise the same amount of money,” Carothers said.
He adds that even if the tax rate is the same as last year, taxes will increase if a home’s value also increases. “Even though the number is small, it’s actually more taxes being collected,” Carothers said. “No matter what your rate was last year, that’s a tax increase.”
According to data from Texas A&M University Real Estate Center, the average sale prices of homes in Texas have increased by 87% since January 2018.
The appraisal district is responsible for appraising local properties, or how much they estimate a home will sell for as of Jan. 1 each year. Chief Appraiser of Coryell Central Appraisal District, Mitch Fast, said the rise in home values is mainly attributed to low supply and high demand for properties in Texas.
“Properties sell, and you have a sale price. You compare that sale price to properties one year ago and it’s much higher the following year than it was the previous year,” Fast said. “And why is that? Well, people are moving to Central Texas, and there is a supply of homes that are available and a supply of commercial properties that are available. When demand is increasing for that amount of supply, that typically drives prices up.”
Despite the rise in appraisals, most homeowners are eligible to apply for tax exemptions that can help lower property taxes, such as the homestead exemption that can remove up to $40,000 of a home's value from taxation.
County tax rate
The Coryell County Commissioners Court approved a property tax rate of .37328 cents for every $100 of a home’s estimated value, which is about 2 cents higher than the county’s no new revenue tax rate.
Although the proposed tax rate is a 6.6% decrease from last year’s rate of .39994 cents per $100, taxpayers still might see an increase in county taxes following the rise in home values.
According to a notice of the 2023 tax increase posted on the Coryell County website, average homestead values in Coryell County have increased by 12.66%, rising from $166,172 in 2022 to $187,212 in 2023.
“Say (for example) they appraised your house at $100,000 last year, and then appraised it at $120,000 this year. Last year, you paid .39 cents on $100,000 but this year you’re paying .37 cents on $120,000,” said County Commissioner Scott Weddle. “Even though the rate goes down, you could still end up paying a little more depending on what your house is appraised at.”
Weddle said the county’s 2024 budget will raise more revenue from property taxes by 10% this year. The additional tax is expected to generate $1,776,456 more money compared to last year’s budget.
According to Texas Comptroller, total property taxes are normally divided into two rates: the maintenance and operations rate that supports day-to-day expenses and operation costs such as salaries, and the interest and sinking fund that supports bond debt from facility construction.
Following nationwide inflation and pressure to increase workforce wages, Weddle said most of the revenue from property taxes will cover maintenance and operations, such as salary increases for law enforcement and the county road and bridge department.
“One of the reasons we are sitting down and proposing a rate that is higher than the no new revenue rate is anybody who watches the news knows the wage pressures. I think the best and greatest asset that the county has are its employees,” Weddle said during a Sept. 12 public hearing on the tax rate at Commissioners Court.
Of the tax rate, .04450 cents cover debts, such as the expansion of the new Coryell County Jail that will add 47 new beds to the facility.
“This was the money that was determined that we need to make ends meet for our new obligations,” Weddle said.
City tax rate
The City of Gatesville approved a property tax rate of .56000 cents for every $100 of a home’s valuation, which is the same rate as last year’s tax rate.
City Manager Scott Albert said approximately 51 cents of the tax rate is allocated for maintenance and operations, while the remaining 5 cents covers debt payments.
“The only reason why a homeowners city tax bill would increase this year compared to last year is due to the increased value of their property,” said City Manager Scott Albert in an email. “The value of property is established by the Chief Appraiser and the Coryell Central Appraisal District Board, rather than the city.”
A notice on the tax increase published by the city says that average homestead values in Gatesville have increased by 11.15%, rising from $144,191 in 2022 to $160,269 in 2023.
The city’s 2024 budget will raise more revenue for maintenance and operations from property taxes by 8.2% this year. The additional tax is expected to generate $208,706 more money for this fund compared to last year’s budget.
Mike Halsema, Finance and HR Director for the City of Gatesville, said in an email that the city’s maintenance and operations fund receives revenues from not only property taxes, but also sales tax and other fines and fees. These revenues fund the Gatesville Police Department, Gatesville Volunteer Fire Department, Gatesville Public Library, parks, courts, streets and other administration activities.
“The total tax rate remained the same as last year at 56 cents per $100 valuation. However, since valuations increased over last year, the larger values multiplied by the same overall tax rate generate more in property taxes,” Halsema said.
Property tax relief
Despite potential property tax increases for some entities, there is a chance local property owners will find a decrease in their overall tax bill this year.
Over the summer, Gov. Greg Abbot signed an $18 billion property tax cut that includes lowering school district tax rates and raising state homestead exemptions from $40,000 to $100,000. If voters approve the amendment on Nov. 7, some taxpayers could see a decrease in their property taxes of more than 40%, according to an article by the Texas Tribune.
Darrell Frazier, Chief Financial Officer of Gatesville ISD, explains that for every $1 local taxpayers pay to Gatesville Independent School District, the state would give $3 if voters approved the legislation in local Nov. elections.
Gatesville Independent School District adopted a total property tax rate of .8992 cents per $100 property valuation for the 2024 fiscal year, which is lower than last year’s total rate of $1.0546 per $100. About 20 cents is allocated toward debt and .6992 cents covers maintenance and operating (M&O) costs, such as school supplies and materials and teacher salaries.
The property tax cut will help reduce the school district M&O tax rate. Currently, Gatesville ISD’s M&O tax rate is 19 cents lower than last year’s M&O rate.
For those living in the city, Carothers said about 50% of property taxes go toward the school district. It’s about 70% for those who live outside of the city.
“(This bill) is a wise investment for local people, which helps the local community and local district,” Frazier said.
Learn more about local property taxes by visiting the Texas Comptroller website or coryellcountytax.com.
