How Can a Successful Value Appeal Result in a Higher Tax Bill Than Estimated?
The Texas Constitution in Article 8, Section (1e) prescribes how the local option homestead exemption is to be calculated:
(e) The governing body of a political subdivision, other than a county education district, may exempt from ad valorem taxation a percentage of the market value of the residence homestead of a married or unmarried adult, including one living alone..…
This calculation usually gives the maximum benefit available under the law. However, when the value of a homestead is capped below the market value, protesting your property’s value and receiving a market value reduction can lessen the homestead exemption amount and actually increase its taxable value. How can this be? If the market value is reduced, the resulting calculated exemption amount is less and results in an increase in tax amount.
Below is an example of a situation such as this:
Beginning Value | ||||||||
Taxing Units | Market Value | Assessed Value (Last Yr's Appr value +10%) | State Mandated HS Amount | Local Option HS % | Calculated Local Option HS Amount (Market Value times local option %) | Taxable Value (Assessed Value - HS Exemption Amount | Tax Rate | Calculated Tax Amount |
Bexar County Road and Flood | $300,000 | $220,000 | $3,000 | 20% | $60,000 | $157,000 | 0.023668 | $37.16 |
| San Antonio River Authority | $300,000 | $220,000 | 4% | $12,000 | $208,000 | 0.018300 | $38.06 | |
| Alamo Community College | $300,000 | $220,000 | 1% | $3,000 | $217,000 | 0.149150 | $323.66 | |
| University Health | $300,000 | $220,000 | 20% | $60,000 | $160,000 | 0.276235 | $441.98 | |
| Bexar County | $300,000 | $220,000 | 20% | $60,000 | $160,000 | 0.276331 | $442.13 | |
| City of San Antonio | $300,000 | $220,000 | 20% | $60,000 | $160,000 | 0.541590 | $866.54 | |
| Northside ISD | $300,000 | $220,000 | $140,000 | $80,000 | 1.004900 | $803.92 | ||
| Total | $2,953.45 | |||||||
After a Reduction in Market Value | ||||||||
Taxing Units | Market Value | Assessed Value (Last Yr's Appr value +10%) | State Mandated HS Amount | Local Option HS % | Calculated Local Option HS Amount (Market Value times local option %) | Taxable Value (Assessed Value - HS Exemption Amount | Taxing Units | Calculated Tax Amount |
Bexar County Road and Flood | $275,000 | $220,000 | $3,000 | 20% | $55,000 | $162,000 | 0.023668 | $38.34 |
| San Antonio River Authority | $275,000 | $220,000 | 4% | $11,000 | $209,000 | 0.018300 | $38.25 | |
| Alamo Community College | $275,000 | $220,000 | 1% | $2,750 | $217,250 | 0.149150 | $324.03 | |
| University Health | $275,000 | $220,000 | 20% | $55,000 | $165,000 | 0.276235 | $455.79 | |
| Bexar County | $275,000 | $220,000 | 20% | $55,000 | $165,000 | 0.276331 | $455.95 | |
| City of San Antonio | $275,000 | $220,000 | 20% | $55,000 | $165,000 | 0.541590 | $893.62 | |
| Northside ISD | $275,000 | $220,000 | $140,000 | $80,000 | 1.004900 | $803.92 | ||
| Total | $3,009.89 | |||||||
| Difference | $56.45 | |||||||
This situation still results in a significantly lower tax bill in comparison to not having a homestead exemption or the entity not having adopted one in the first place. A market value reduction does not always provide a financial benefit to the owner as in the example above. Please consider this when deciding whether or not to appeal your value.
Need help or have questions?
We’re here to help, so don’t hesitate to reach out if you have any questions!
Contact Information:
Bexar Central Appraisal District
411 N Frio St
PO Box 830248
San Antonio, TX 78283-0248
Phone: 210-242-2432
Fax: 210-242-2454 or 210-242-2453
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