Rising tax values vex payers, payees

So you've always wanted to live in a $200,000 home. Or a half-million dollar home.

This could be your lucky year.

You'd love to sell it for top dollar when it's time. But, meanwhile, that value is way over what you want to pay taxes on.

Tax values are up across the state of Texas this year and Orange County is no exception.

Scott Overton, Chief Appraiser for the Orange County Appraisal District, said preliminary tax values were up an average of 16 percent over last year.

But those values aren't final, he was quick to say.

Taxpayers have until June 1, 30 days after their appraised values were mailed to them, to file a protest. Information on how is available on the OCAD website, orangecad.net .

"We have a few different options to file a protest," Overton said. "You can mail it to the office. You can email it to the office, or you can go to our online protest portal and file it online."

This is the time of year when all elected government officials try to explain to their constituents that they do not set the tax values.

That is done by appraisers who work in the county appraisal district office, based on the condition of your home on Jan. 1, 2021.

You could go farther and say that they're set by new homebuyers and real estate agents who know how to get top dollar for your neighbor's old house.

"We look at the sales data from prior years and based on what the home market is doing," Overton said.

A lot of elected officials pass the blame to the Appraisal District Board, saying they have nothing to do with the values.

And, while elected officials do, in fact, elect the Appraisal District Boards, board members have no direct say on property values.

Their primary job is to hire the Chief Appraiser and make sure he runs his office by the book. But they also appoint the Appraisal Review Board, the folks who hear the protests, consider the evidence and issue the final valuation.

One of the top officials in Orange County told me recently the tax values are determined by the Texas Comptroller deciding how much money the state needs to operate for the next two years. Overton didn't totally discount that.

"The comptroller does a property value study every two years, and our values were on the low end, based on what they're selling for," OCAD's boss said. "We have to increase the appraisals to get back to market value."

Appeals of property valuation are in order if you're being valued for more square footage than your house has, or say you discover you're getting valued for a swimming pool you removed years ago. If similar homes in your neighborhood aren't selling for what yours is valued for, protest.

But take documents to back up your claims. Photos, maybe. Dated photos.

Overton says the first step should be what he calls "an informal appeal," a phone call or personal visit to the OCAD office to discuss the case with the county appraisers.

Often, favorable resolutions are as easy as an informal appeal. And the success of ARB appeals is high.

Speaking of values, the OCAD website calls attention to a printing error in the Notice of Appraised Value that omitted the Homestead Cap amount. By law, the taxable value of a homestead property can only increase by 10 percent from one year to the next.

So that website note tells you to go deeper into the OCAD website and access the Homestead Cap for your property.

The "Assessed Value" is where the rubber meets the road. It's the value that a property owner will be taxed on, the Appraised Value less exemptions such as homestead, over 65 or disabled.

Most of the 22 taxing entities that are members of OCAD have different types of exemptions.

Overton reminds that homes that had damage from last year's Hurricanes Laura still unrepaired on Jan. 1 are due adjustments on their 2021 valuations, if "they can show us what damage they had on January 1."

The frequency of national disaster storms in Southeast Texas is one reason the increase for 2021 is so high. Many area homes were not fully valued in 2020 because of damage done by Tropical Storm Imelda in 2019.

"The market is pretty high in Orange County," Overton said. "We've had some new construction built, but we've had a lot of property sold since the storms.

"And a lot of them remodeled."

So, how much will taxes – the amount you have to pay by Jan. 31, 2022 – go up?

It seems certain that most tax rates – rates, set by cities, school districts and the county, times assessed value equals your tax bill -- will go down.

But the amount the taxpayer writes on his annual check to the Tax Assessor-Collector (who then distributes it to all the entities) will most likely go up at a somewhat inverse rate.

Governments expect to feel the squeeze.

"The State Legislature has capped how much we can increase property tax revenue," Orange City Manager Mike Kunst said.

"So if the values go up, the tax rate has to go down. What that may be or may not be, we do not know at this point.

"We can only by law only increase our property tax revenue without an election 3.5 percent and we've all got to keep in mind as we see in the general economy right now, everything is going up."

School districts and counties have different ways to figure out their cap in revenue "without an election," but the bottom line's the same.

"Costs are going up," Kunst said. "So even if we have more revenue, if the costs go up, we are capped on the things that we can buy. So it's a concern."