https://thetexan.news/texas-house-and-senate-strike-deal-on-property-tax-reform-ending-months-long-stalemate/

New homeowner here. Can someone explain this to me like I'm 5? TIA

Maybe it's still TBD pending final language but I thought the 100k homestead was only ISD?

That's awesome. Thank you the explanation. I do have a homestead exemption. Looks like I'll be saving more than just a few dollars!

JobSecurity said:

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Maybe it's still TBD pending final language but I thought the 100k homestead was only ISD?

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To my knowledge - I believe it's $100K on the general homestead, see the language below and the link to the Comptroller.

"For the $40,000 general residence homestead exemption, you may submit an Application for Residential Homestead Exemption (PDF) and supporting documentation, with the appraisal district where the property is located. Once you receive the exemption, you do not need to reapply unless the chief appraiser sends you a new application. In that case, you must file the new application. If you should move or your qualification ends, you must inform the appraisal district in writing before the next May 1st. A list of appraisal district addresses and phone numbers is available online."


https://comptroller.texas.gov/taxes/property-tax/exemptions/residence-faq.php

At least you'd be paying taxes on actual cash flow to your point. Taxing something that doesn't generate any income for most people makes my accounting brain hurt.

if you stand on one foot and point to the north, you'll be able to determine your new tax and tax savings.

Something that should be so simple made overly complicated.

Just eliminate property tax and add a flat income tax.

Looks like a good year to do the extensive home reno. Larger exemption amount and lower rate. Hurts a little less.

Of course the CAD will just say my house is worth that much more bc the property taxes are so low!

I bleed maroon said:

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Why the apples and oranges, Mr. Pear? Shouldn't you include or exclude homestead exemptions in both the before and after scenarios? I don't think it affects your overall point, but overdramatizing expected savings isn't really helpful, in my mind.

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That was just me trying to wear the "Luke Dealwalker" hat!

jagvocate said:

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Are we sure income taxes capped at 5% aren't a better way than property tax? At least it's honest. This whole "paying value taxes yearly on something that hasn't sold" system is ripe for corruption

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Agree. At least with income, me and the state can agree (in theory) on what I made.

The CAD said my home improved at a rate of about $500/day between when I bought it and the year end. Magically the next year it didn't increase at all.

AgGrad99 said:

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jagvocate said:

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Are we sure income taxes capped at 5% aren't a better way than property tax? At least it's honest. This whole "paying value taxes yearly on something that hasn't sold" system is ripe for corruption

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I used to be 100% against a State Income tax, but these days, Im inclined to agree with you.

At least people can retire, and actually own the house they paid for. I hate that senior citizens are paying thousands in property taxes for houses they long paid off.

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One option for Seniors that are property rich but cash poor is the file for a defer n their property taxes until their estate is settled.

The Texas Tax Code, Section 33.06, allows taxpayers 65 years of age or older to defer their property taxes until their estates are settled after death. You can contact the Comptroller of Public Accounts and your county tax assessor/collector's office for information about property tax deferment and exemptions on homesteads for elderly homeowners.

Country appraisal district will try to avoid telling you of this offer as it takes the property taxes off what is collected annually.

I think the interest rate charge the estate is 6%.

woodiewood1 said:

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AgGrad99 said:

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jagvocate said:

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Are we sure income taxes capped at 5% aren't a better way than property tax? At least it's honest. This whole "paying value taxes yearly on something that hasn't sold" system is ripe for corruption

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I used to be 100% against a State Income tax, but these days, Im inclined to agree with you.

At least people can retire, and actually own the house they paid for. I hate that senior citizens are paying thousands in property taxes for houses they long paid off.

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One option for Seniors that are property rich but cash poor is the file for a defer n their property taxes until their estate is settled.

The Texas Tax Code, Section 33.06, allows taxpayers 65 years of age or older to defer their property taxes until their estates are settled after death. You can contact the Comptroller of Public Accounts and your county tax assessor/collector's office for information about property tax deferment and exemptions on homesteads for elderly homeowners.

Country appraisal district will try to avoid telling you of this offer as it takes the property taxes off what is collected annually.

I think the interest rate charge the estate is 6%.

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It pretty much means the heirs have to sell the house when they die. Know somebody whose mother did this. After the back taxes and mortgage were paid off she got very little.

techno-ag said:

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woodiewood1 said:

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AgGrad99 said:

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jagvocate said:

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Are we sure income taxes capped at 5% aren't a better way than property tax? At least it's honest. This whole "paying value taxes yearly on something that hasn't sold" system is ripe for corruption

---

I used to be 100% against a State Income tax, but these days, Im inclined to agree with you.

At least people can retire, and actually own the house they paid for. I hate that senior citizens are paying thousands in property taxes for houses they long paid off.

---

One option for Seniors that are property rich but cash poor is the file for a defer n their property taxes until their estate is settled.

The Texas Tax Code, Section 33.06, allows taxpayers 65 years of age or older to defer their property taxes until their estates are settled after death. You can contact the Comptroller of Public Accounts and your county tax assessor/collector's office for information about property tax deferment and exemptions on homesteads for elderly homeowners.

Country appraisal district will try to avoid telling you of this offer as it takes the property taxes off what is collected annually.

I think the interest rate charge the estate is 6%.

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It pretty much means the heirs have to sell the house when they die. Know somebody whose mother did this. After the back taxes and mortgage were paid off she got very little.

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Possibly, but not necessarily. The most important thing is that they can't be evicted and lose their house due to back taxes which occurred. The heirs have the option of paying the taxes, selling the house and paying the taxes and keeping the balance, or just walking away from the house if it's upside down on value.

If the house is worth anything significant in a good area it would be very many years for the taxes to be higher than the value of the house. Let say the current market value is $490,000 and the owners are 65. Taxes frozen at $4,440. Interest accrued the first year would be $266 at 6% and go up from there based on the additional deferred taxes each year.

But homes in good areas are going up in market value higher than 6% annually and probably will for the next few decades at least. If this is the case, the equity in the house is still going up so the heirs would still be gaining value, just not as much.

The owners can always pay a portion every year or every other year as they can to keep their equity higher.

Also, if the owners could put the annual tax amount, or a partial amount, into an interest bearing account gaining 3 to 6% to minimize the property tax interest accruing.

The key to deferring property taxes is giving the person the ability to stay in their house and not to maximize inheritance amounts.