How About a New Way to Calculate Property Taxes?

Photo via cityofkyle.com

In the August edition, it was suggested that Texas eliminate the property taxes because they are so high. They are the seventh highest in the nation, and they are no longer fairly justified. At the time of origination, they were based on the usage of the family-owned property as an income, but not much of Texas land is used for farming or ranching today.  

There needs to be a difference in the way taxes are calculated. The changes around the house should not affect the homeowner’s taxes. 

It should be based on what is done to the house and its property lines. Here are three examples of why. 

  • A person buys a home at $50,000. The value of the home and its land will go up in value over the years, and let’s say it has gone up in value to $75,000, which is fine while the owner is working. But, how about those who pay off the mortgage and retire? Now they have limited income which is sometimes less than they earned. How can the owner possibly afford the taxes based on the property value increase? 
  • Then there is the house that gets built around. When the house was purchased, it was worth $50,000. However, after investors develop other houses around it, the property then becomes worth around $250,000. Can that person afford the taxes now on the $250,000 home? 

How about a house that was originally purchased for one family for $50,000, but the owner splits it up to make it into a four apartment rental? The taxes do not change, on that $50,000 house, but the amount of taxes that area will collect will be affected. 

  • This is because now only one landlord will pay the tax on the $50,000 property and there are four families in the residence. So, basically, one tenant is paying the property tax for the house and the other three families are not paying any property taxes at all, which leads Texas to lose money or increase taxes to compensate. 

Texas taxes are currently calculated based on (Appraised Property Value − Exemptions or Special Appraisals) × Property Tax Rate ÷ 100. This needs to change. How about basing the taxes on (Expenses ÷ Population = %), or something similar? Then, if there is a change in a house like the third example, the taxes would have already been calculated for the year and stayed the same amount, but they would be divided among the four apartment residents.

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