Property Tax Transparency in Texas
The budgets adopted by taxing units and the tax rates they set to fund those budgets play a significant role in determining the amount of taxes each property owner pays. In 2019, the Texas Legislature passed legislation to help Texans better understand tax rates in their home county. You can access timely information about how local tax rate decisions affect your tax bill on your county’s Truth in Taxation website.
What is Truth in Taxation?
Truth in Taxation is a concept embodied in the Texas Constitution that requires local taxing units to make taxpayers aware of tax rate proposals and to afford taxpayers the opportunity to limit or approve tax increases. The type of taxing unit determines its applicable Truth in Taxation requirements.
What information will I find on the Truth in Taxation website?
The website provides information from your local appraisal district and local taxing units to determine a property tax estimate for properties in your county. Taxpayers can see how the changes between the no-new-revenue rate and proposed tax rates would affect the amount of taxes they would have to pay. The current year’s information will be available online beginning in early August 2021 and updated regularly as each taxing unit updates their information.
Taxing units must hold a public hearing on the proposed budget and tax rate and publicize the date, time, and location. The website includes details on the public hearings for your county and their proposed budget and tax rate. Additionally, the website gives you an opportunity to provide feedback to your taxing unit.
What does each of these tax rate terms mean?
Here are some key terms you’ll find on the site:
No-new-revenue tax rate (NNR): The NNR tax rate is the rate the taxing unit needs to generate about the same amount of revenue they received in the previous year if the rate was applied to the same amount of properties in both years. If property values rise, the NNR tax rate will go down and vice versa.
Voter-approval tax rate: Taxing units need to get voter approval before they exceed the tax rate. The maximum rate varies based on the type of jurisdiction:
Cities and counties can increase the tax rate three and half percent for operating expenses.
Junior college districts, hospital districts, and special taxing units can increase their tax rates up to eight percent for operating expenses.
School district funding calculations and the debt tax rate influence the voter-approval tax rate for school districts.
Who sets my property tax bill?
Texas has no state property tax. Local governments set tax rates and collect property taxes that they use to provide local services including schools, streets, roads, police, fire protection, and more. Your locally elected officials (school trustees, city council members, county commissioners) decide your property tax burden. These local officials can also help answer questions and respond to inquiries.
The Texas Legislature does not set the tax amount of your local taxes nor does your local appraisal district.
How is my tax bill calculated?
Multiple taxing units like your school district, county, and city tax each property. Most taxpayers will get only one bill from the local assessor-collector that combines the taxes owed to each taxing unit. For property owners with a mortgage, the tax bill will be sent to your mortgage company to be paid from your escrow account.