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REAL ESTATE
TAXES
What About Taxes?
Our Constitution is in actual operation; everything appears to promise that it will last; but in this world
nothing is certain but death and taxes.
Benjamin Franklin
Information Provided by Texas American Title Company
Real Estate Taxes in the Houston Metropolitan Area
In the greater Houston metropolitan area,
there are more than one thousand taxing authorities who assess and/or
collect ad valorem real estate taxes. Within incorporated areas, like the
City of Houston, there are generally two tax collectors;
- The Houston Independent School District (HISD)
and
- The City of Houston which is collected in the
Harris County tax bill.
In unincorporated areas outside the city limits there
is also a Water District or Municipal Utility District (MUD) under whose
authority real estate taxes are collected for water and sewage
services.
While the Texas Constitution provides for
uniformity of taxation on like properties, there can be a substantial
disparity in the annual taxes paid on one property in comparison to
another similar property located elsewhere in the area. These differences
generally relate to three primary factors:
- The tax assessor’s appraised value of the
proeprty;
- The number of taxing authorities assessing taxes
for that property; and
- The tax rate assessed by the various
authorities.
Below is a comparison of the taxes on three properties,
each with an appraised value of $150,000.00.
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SUBDIVISION |
AREA |
TAX
AUTHORITIES |
TAXES
1993 |
TAXES WITH
EXEMPTIONS* |
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Memorial Cove |
West |
Spring Branch ISD |
$2,670.00 |
$2,047.00 |
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Hunters Creek Village |
345.92 |
345.92 |
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Memorial Village Water |
146.22 |
146.22 |
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|
Harris County |
975.00 |
780.00 |
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|
TOTAL: |
$4,137.14 |
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Ponderosa Forest |
FM 1960 |
Spring ISD |
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Ponderosa UD |
930.00 |
930.00 |
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Harris County |
975.00 |
780.00 |
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TOTAL: |
$4,455.00 |
$4,175.00 |
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Kelliwood Terrace |
Far West |
Katy ISD |
$2,445.00 |
$2,363.50 |
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Fort Bend Count |
989.70 |
792.00 |
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Cinco MUD #3 |
1,125.00 |
1,125.00 |
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Will\ow Fork DD |
1,125.00 |
1,125.00 |
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TOTAL |
$5,684.70 |
$5,405.50 |
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*Taxes With Exemptions
An exemption removes part of the valuation
of your property from taxation and thereby lowers your taxes. If the home
is your residence, you will qualify for a $5,000.00 homestead exemption on
your home’s value for school taxes. In addition, any taxing unit may
offer an additional homestead exemption of up to 20% of the home’s
value; each taxing unit decides whether it will offer the exemption and at
what percentage. Spring Branch I.S.D., for example, offered a 20%
homestead exemption ($150,000.00 — 30,000.00 = $120,000.00) + an
additional $5,000.00 exemption on its 1993 taxes. That homestead
exemption resulted in a tax savings of $623.00. Harris County presently
offers a 20% homestead exemption. The total savings in this Memorial Cove
subdivision example as a result of homestead exemptions was $818.00. The
homestead exemption savings in Kelliwood Terrace, however, was only
$279.20. In order to qualify for a homestead exemption for a particular
year, an individual must own the home as of January 1, and the home must
be used as the principal residence as of January 1.
Water Districts, MUDS, UDS and
DDS
In each of the above tax examples there is at
least one MUD or other Water District taxing authority. The need for a
Water District or MUD arises when a municipality is unable to provide
water, sewage and drainage services either because of physical capacity or
because the development is so remote that the cost to provide services
would be prohibitive. A MUD (Municipal Utility District) or an UD
(Utility District) or a DD (Drainage District) may provide such diverse
services as water supply, conservation, drainage, fire fighting, solid
waste collection and disposal, sewage treatment and/or recreational
facilities.
Additional Information
In the Houston area, taxes are paid in
arrears. The taxing authorities generally mail their tax bills in October
and the deadline for the payment of same is January 31 of the following
year. Taxes for the previous year that remain unpaid on February 1 are
considered delinquent and penalty and interest charges are added to the
original amount. Most mortgage companies pay taxes in October, and the
amount required in the escrow account will be computed as if taxes were
paid in October.
Have your Realtor contact Texas American Title
Company for specific tax information on any home in the Houston area.
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