Northwest Austin Edition | March 2022

Travis County ASSESSING APPRAISALS Prior to 2021, the median appraisal value for a single-family home in Williamson and Travis counties rose steadily. Then, in 2021, the average appraisal value jumped by more than 15% in both counties. Experts predict an even larger increase this year. Williamson County

property taxes for the coming year. However, experts said the increase in what a person owes in property taxes is unlikely to be proportional to the increase in home value due to the homestead exemption and caps on howmuch revenue a taxing entity can make from property taxes in a year. Residential ramications Last year, property valuations increased more than 15% in both Tra- vis and Williamson counties, accord- ing to data fromthe appraisal districts. Prior to that, both Travis and Wil- liamson County residents saw apprais- als increase on average between 1%-8% each of the last ve years. Despite the expected increases in property tax appraisals, the homestead exemption caps the amount a prop- erty’s taxable value can increase in a year at 10%. To qualify for the home- stead exemption, the propertymust be a person’s primary place of residency, according to the Texas comptroller. Additionally, property values are only one factor in the tax formula. The other is property tax rates, which are set by taxing entities, including school districts, cities and counties, during their annual budgeting process. A 2019 Texas law capped the rev- enue counties and cities can make from property tax increases to 3.5% on existing properties without needing voter approval, according to the Texas

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residents in mid-April and aim to show a home’s value as of Jan. 1. “What people don’t realize is that we are a mere reection of the market sales transactions that happen,” Lank- ford said. “Our job is to appraise at the market level that we are seeing.” Real estate professionals said these property value increases are not sur- prising given current real estate con- ditions—low inventory coupled with a high demand for houses have contin- ued to drive prices up. “The concern we have as Realtors is if we continue to have a low num- ber of new active listings, but also increasing demand, then we are going to see steep increases again in valua- tions,” said Realtor Drew Grin, who works primarily in Northwest Austin and surrounding communities. In January, the median price of a home sold in Northwest Austin was $531,250, up 14.25% from the median sales price in January 2021, according to data from the Austin Board of Realtors. Meanwhile, Travis County as a whole saw median home prices rise 23.9% to $530,000 in January. Neigh- boring Williamson County saw even larger increases, with median sales prices increasing 42.53% to $460,000. These steep increases in home sales prices and, subsequently, prop- erty values could aect homeowners’

+15.61%

$500K

+7.64%

$400K

$300K

+17.82%

+2.23%

$200K

2018 SOURCES: TRAVIS CENTRAL APPRAISAL DISTRICT, WILLIAMSON CENTRAL APPRAISAL DISTRICT COMMUNITY IMPACT NEWSPAPER 2019 2017 2020 2021 2016

Association of Counties. A 2.5%capwas also implemented for school districts. Therefore, Lankford said if the tax- able value of homes in a jurisdiction increases by 10%, the property tax rate will have to decrease so that total revenue does not exceed these limits. “Even though property owners will see their market values go up substan- tially, there are numerous protections in place so that they will not feel that com- plete impact in their taxes,” TCAD Chief Appraiser Marya Crigler said. Despite these caps, Grin said 10% increases in the taxable value of a property adds up over time. “If you do a tax increase of 10% every year for ve years … the taxes that [someone is] going to pay this year are going to be signicantly higher than maybe ve or especially 10 years ago,” Grin said. “It could potentially impact aordability in the near future for a lot of people.” Ashomevalues goup, Crigler said the number of protests led with TCAD has historically increased. However, she encouraged residents to understand the appraisal district only sets the mar- ket value for the home, not the amount of property taxes a resident owes. ABoR President Cord Shiet said

tax rates and potential property tax bill payments are something buyers are taking into account when deciding where and whether they are able to purchase a home. “Added expenses of property taxes can price someone out of an area,” Shiet said in an email. “It is import- ant to work with a Realtor that can help you understand that your hous- ing payment isn’t just principle and interest; it’s those things plus insur- ance, taxes, potentially mortgage insurance, any [homeowners’ associ- ation] fees and more.” Rapid real estate growth Crigler said the rising home prices are a simple side eect of supply and demand. The Northwest Austin area has seen an inux of technology jobs, with Apple planning to move a rst phase of employees into its new $1 billion campus in 2022 and continued growth near The Domain. Additionally, housing inventory levels have also been at record lows. In January, Travis County had 0.4 months of housing inventory and Williamson County had 0.3 months, according to ABoR data.

WHOQUALIFIES FOR THE HOMESTEAD EXEMPTION?

Property owners may qualify for the general homestead exemption and homestead cap if the property is their primary residence.

CALCULATING PROPERTY TAXES The assessed value of a property is only half of the equation used to calculate the property taxes a homeowner owes. The other half is the tax rate. The following tax rates apply to scal year 2021-22. ASSESSED VALUE X TOTAL TAX RATE100

ENTITY*

TAX VALUE

$0.541

City of Austin:

$1.0617

Austin ISD:

$1.388

Pugerville ISD:

$1.1336

Round Rock ISD:

= PROPERTY TAXES OWED

$0.357365

Travis County:

*THIS LIST IS NONCOMPREHENSIVE AND DOES NOT INCLUDE MUNICIPAL UTILITY DISTRICTS OR EMERGENCY SERVICES DISTRICTS. SOURCES: TEXAS ASSOCIATION OF COUNTIES, TEXAS COMPTROLLER’S OFFICE, WILLIAMSON CENTRAL APPRAISAL DISTRICT COMMUNITY IMPACT NEWSPAPER

$0.440846

Williamson County:

DID YOU KNOW?

In 2019, state lawmakers passed legislation capping the amount of revenue local entities can make in property taxes from existing properties as 3.5% for cities and counties and 2.5% for schools.

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