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How to Pay Less in Central Texas Property Taxes

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Follow these three steps to making sure you’re not overpaying for your home.

By Jenny Hoff

On The Money - Pay LEss in Central Texas Property Taxes

As the Austin real-estate market continues to boom, you’ll likely find yourself paying more in property taxes as the value of your home increases. Travis County boasts one of the highest property tax rates in Texas, which is why many people are moving to neighboring counties. While there is no insider secret on paying less in property taxes, there are some steps you can take to make sure you’re not overpaying. And, if you’re currently house hunting, pay attention to more than just the price of the property, as the property tax rate can vary dramatically within a few miles’ radius.

1. When considering a location, look for areas with a lower tax rate.

Of the approximately 400,000 homeowners in Austin, one-third of them protest their taxes and the majority win.

The two drivers of your tax bill are what the property is worth and the effective tax rate. If you can find a home that is on the lower end of your budget, you’ll pay less in taxes. If there is a set price you’re looking for, then search various zip codes you’re considering to find their rates; you might be shocked at the difference. When searching for a home, another way to minimize taxes is to look at older developments instead of new ones. “The newer, more recently developed areas tend to have the higher rates because a lot of that has to be funded through property tax bonds,” says John Krueger, CEO of Five Stone Tax Advisers.

2. Protest your property taxes—every year.

If you own a home, you’re likely already getting ads in the mail from companies offering to help you get a lower valuation for your home, which will lower your tax payments. These agents usually only charge you if they’re successful and they often are. “Last year, we served 20,000 clients in the Austin area and got relief for 85 percent of them,” Krueger says. According to him, out of the approximately 400,000 homeowners in Austin, one-third of them protest their taxes and the majority win. If hiring a company sounds too daunting, you can also protest yourself. There are forms available on your county’s website to protest online. In some cases, just submitting screenshots of similar houses within a couple miles’ radius that are priced lower (using an app like Redfin or Zillow) will do the trick. Krueger says you should make sure to also request the county’s evidence for the valuation they gave you when protesting—the software they use is not much different from Zillow’s and can be inaccurate.

3. File for every exemption available to you.

For most people, the homestead exemption, which gives you some of your tax money back, is the only one they will qualify for. However, you need to make sure you file it every year and on time. (The Travis County deadline for 2020 is April 30.) Also look at your county’s website to see if you qualify for any other exemptions, most notably those for people 65 years and over and disabled veterans.

As you prepare for tax season, use the tools available to keep your property taxes affordable, so as Austin continues to grow, you’ll be able to grow with it.


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