Texas is one of the fastest growing states in America, with many new residents moving in each year looking for jobs, opportunities, and warmer weather. If you’re considering moving to a state where everything is bigger (and better), then it’s vital to understand how property is taxed here.
Ad valorem taxes are taxes whose amounts are determined by the value of a property. Ad valorem taxes are usually collected and paid over by the individual property owner but sometimes can be assessed against the business operating at said property. These taxes can include everything from local sales tax all the way to real estate tax.
In most cases, especially in Texas and other southern states, the county appraisal district is responsible for determining what a newly developed piece of real estate will be valued at when it first goes on the market or is officially sold. But who governs this appraisal district, and how are they chosen? Let’s find out.
A local board of directors governs an appraisal district.
The governing bodies of taxing units (county, city, school) vote for appraisal district directors. If the county tax assessor-collector is not chosen for the director position, the county tax assessor-collector works as a non-voting director.
Each taxing unit in an appraisal district pays its share (pro rata) of the budget. The amount of taxes levied by each unit versus the total taxes imposed by all units determine the taxing unit’s share.
The Appraisal Review Boards (ARB) govern Local County Appraisal Districts. An ARB is a board of directors the taxpayers elect to represent their interests. The ARB’s purpose is to hear appeals from property owners whose property values have been appealed by the chief appraiser and voted on whether or not their appeal should be approved or rejected.
The review board members are appointed by the board of directors of each appraisal district.
An individual must meet specific qualifications, including:
- Be a district resident for 2+ years
- Directors, employees, or officers of an appraisal district, tax office, or the Comptroller office are disqualified
- Closely related relatives to paid tax agents are also disqualified
Texas property values are set yearly by each county’s appraisal district based on a review by the chief appraiser. The appraisal district board of directors appoints a chief appraiser for the job, while local taxing units elect the directors and fund the appraisal district.
The ARB also exists to mediate conflicts between property owners and the appraisal district about the taxability and value of their real property. Citizens from the community are often called on to act as ARB members.
School districts, counties, cities and special districts are local taxing units that determine how much money they need to provide public services like schooling, road maintenance, etc.
Property tax rates are set according to budgets proposed by local units. Some taxing units receive funding from local sales tax as well.
The State Comptroller’s office performs a yearly Property Value Study (PVS) with each school district to determine state funding needs. This study ensures that property values are at or near market value for equitable school funding. If a district cannot raise money locally, it may receive additional funding.
In Texas, a local board of directors governs an appraisal district. The board appoints the review board members.
- Texas property values are set yearly by each county’s appraisal district
- The appraisal district board of directors appoints a chief appraiser
- Local taxing units elect directors and fund the appraisal district
- The ARB mediates conflicts between property owners and the appraisal district
- School districts, counties, cities and special districts are local taxing units that determine how much money they need to provide public services
- Property tax rates are set according to budgets proposed by local units
- Some taxing units receive funding from local sales tax
The Ray Tax Group is Texas’ Premiere Property Tax consulting firm. We are a team of seasoned professionals, licensed attorneys, real estate agents, and property tax consultants with knowledgeable support staff.
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