Dallas County Property Tax

Dallas County is the second-largest county in Texas and one of the largest in the United States. Property taxes are collected to fund a variety of essential services, such as schools and emergency services. Calculating your property tax can become quickly complex. Here are five things investors and homeowners need to know about property taxes in Dallas County.

5 Things Investors and Homeowners Need to Know About Dallas County Property Taxes

1. How Dallas County Calculates Property Tax
2. Tax Rates
3. When Property Taxes are Due and Other Important Dates
4. How to Pay Property Taxes
5. Ways to Lower Tax Liability

Dallas County is the second-largest county in Texas and the ninth-largest in the United States. With an area of 909 square miles and a population over 2.6 million, Dallas County has 832,174 parcels of property as of 2018. Dallas County is comprised of 61 districts such as county hospital and community college districts as well as independent school districts (ISD), cities, and special districts. These taxing units levy property taxes based on the value of property in the county.

Property in Dallas County has a total market value of over $321 billion, $245 billion of which is taxable property. Dallas County is home to 31 cities and towns, including the city of Dallas, Irving, and Garland. A single parcel of property can be subject to multiple districts which can impact the total tax bill. Business and other personal property may also be assessed a value and taxed.

5 Things Investors and Homeowners Need to Know About Dallas County Property Taxes

In 2018, Dallas County revenue was $25.3 million. The funds raised through taxation go to fund public works such as roads, emergency services, schools, and more.

1. How Dallas County Calculates Property Tax

Unlike most states in the U.S., Texas does not have state income tax or state property tax. Instead, local governments oversee taxation by local taxing units. These taxing units are organized by districts which include real estate and other property. A single parcel of property may be taxed by multiple districts, such as school, city, or municipal utility districts (MUD). Property tax is typically assessed as a portion of the property value. This type of tax is called an ad valorem tax since it is based on the value of the property itself.

However, some districts may assess a flat fee each year instead. The value of property in Texas is most often based on the fair market value of the property and any improvements. The value can also be based on the value of similar homes nearby. Texas tax laws specify that taxpayers have the right to equitable taxation for their area. Recent tax law changes have also given property taxpayers more ways to fight tax increases.

Property taxes in Dallas County are determined by a few main components. First, the property value is assessed by the Dallas County Appraisal District (DCAD). The appraisal district will assess the value of property every one to three years. The DCAD is also responsible for applying changes in home value due to a variety of factors. This includes changes caused by market fluctuations, changes in ownership, improvements to the property, and damages. The appraisal district is also who you would contact to apply for exemptions and credits to reduce the property taxable value.

Once the appraisal period has ended, the property values will be set. However, taxpayers have the right to protest and appeal the assessment. In fact, a tax attorney may advise you to protest annually to keep your tax burden as low as possible. Be aware that you only have a limited amount of time to protest property tax appraisals, and your appeal must be filed before the deadline posted on your tax statement.

Once the Appraisal Review Board hears any scheduled protests and makes a decision, the taxable values are presented to the local taxing units. These local units consider the budget needed for their districts and determine the local tax rates. The property tax bills are then sent out and collected by the Dallas County Tax Assessor-Collector.

2. Tax Rates

Property tax rates in Dallas County are set by local taxing districts. Multiple tax districts can overlap on parcels of property, which will impact the total property tax bill. Examples of tax districts can include independent schools, community colleges, libraries, and essential services, such as fire and rescue emergency and hospital services. Because Dallas County doesn’t collect income taxes, taxing units must raise the necessary funds through other methods.

In recent years, Texas has seen incredible growth, which has caused significant property values increases and increased the need for vital services provided by the county. As a result, many counties have also been forced to raise the real estate taxes, which places an increasing burden on property owners.

3. When Property Taxes are Due and Other Important Dates

Property taxes are assessed based on both the value of the property and the owner of the property as of January 1st each year. This means that if the property is sold or transferred after this date, the seller may still receive a bill from the tax office. Before any transaction is made, it is important to agree ahead of time what portion of the property tax bill the seller and buyer are each responsible to pay. Usually, this is calculated using the date the property actually changes hands. The seller often agrees to pay the prorated property taxes up to the sell date, and the buyer pays the rest. In some cases, a mortgage company will tax care of the property taxes or a different agreement can be made. Be sure to work out the details, so you don’t have to pay penalties for missing a payment.

As the value of Texas property continues to grow, local taxing units have increased tax rates as well. These increases in tax rates have sparked protests, resulting in recent changes to Texas property tax laws.

Property tax bills are usually mailed out in October and taxpayers must pay by January 31st or face penalties and interest. If the county has to hire an attorney to collect a tax debt, extra fees will be assessed, usually as a percentage of the total bill.

4. How to Pay Property Taxes

There are many ways to pay property taxes in Dallas County, Texas. First, taxpayers can access records and calculators online through the Tax Assessor-Collector’s website and the Dallas Central Appraisal District. You can pay online using electronic transfers from a bank or by using credit cards and debit cards. Extra fees and charges may apply depending on the method of payment used. For example, credit card networks usually charge a convenience fee as a percentage of the total charge.

It is also possible to take the necessary forms and payments to a local Dallas County tax office or make a payment over the phone. You can also mail in a check or money order. It is important that the payments are submitted by the due date to avoid penalties and interest mandated by state law.

Also, be aware that your mortgage company may not handle every tax bill. Even when your mortgage company handles property tax payments, it may still be possible to receive an additional tax bill from the assessor’s office. If you receive an additional tax bill, contact your mortgage company for more information or reach out to a knowledgeable tax attorney.

5. Ways to Lower Tax Liability

There are many ways you could lower your property taxes in Dallas County. First, when the home’s value is appraised, it may be possible to have the value lowered through appeal. It’s always possible that the value may have been incorrectly assessed. A tax attorney can determine if your appraised value is correct and help look for other ways to lower your tax liabilities across the board.

If the property is your primary residence, you may be able to claim a homestead exemption, which will reduce the taxable value. Disabled veterans and property owners who are over 65 or disabled may also qualify for an exemption. Businesses can benefit from freeport exclusions, as well as charitable, religious, and pollution control exemptions.

If your tax bill is too high to manage, you may be able to set up payment arrangements or even have your tax bill settled for less than the total value. Reach out to Anderson Advisors today to find out what solutions are available for you. Remember that deadlines for protesting and appealing an appraisal come quickly—in some cases less than 30 days from when the bill was sent.

Another way to lower liability is by protecting your property or business. There are a variety of ways to do this, such as setting up an LLC or creating a trust. These options may also let you protect your identity as well as provide liability protection.

How Does Dallas County Compare to Other Cities in Texas and the United States?

Dallas County and most of Texas have high property taxes compared to other states. While Texas doesn’t have the highest rates in the U.S., the rapid growth in this state is leading to higher property values and thus higher property tax bills. One reason the tax rate is so high in Texas is because the state does not collect income tax. There are other tax benefits as well, such as exemptions for capital gains when selling a residence.

Other states typically have income tax and other taxes to provide revenue. The lack of other tax revenue sources in Texas forces local taxing units to raise more through property taxes. Recent tax laws across the state have limited how much these values can be raised without triggering elections. Texans can protest appraisals to keep their property values equal to the surrounding area.

All things considered, Texas taxes may be lower than some states, such as California. Residents of California face a slew of other taxes and receive little to no state tax relief when selling property. For this reason, flipping houses is a strategy that may work better in some states than others.

Dallas County Property Taxes

Dallas County is the second-largest county in Texas after Harris County. While Harris County has a total market value of $574.3 billion, Dallas County weighs in at $292.4 billion. In Texas, there is no income tax or state-levied property tax. Instead, property tax is overseen by local taxing units. The Dallas County Appraisal District (DCAD) is responsible for assessing the value of property in the county. Once the property value is determined—including any exemptions or changes in value—the Appraisal Review Board (ARB) will hear any protests about the property values.

After the ARB concludes its hearings, the final property values are fixed and forwarded to the local tax units, which determine the property tax rate. These tax rates are based on the budget the district requires and spread across the total taxable property within that district. A single parcel can be subject to multiple jurisdictions, so parcels near each other could still see wildly different total property tax rates. These tax bills are then sent to the owners on file as of January 1st. The tax must be paid, or penalties and interest will apply.

For more information on Dallas County property taxes, or to see what exemptions you might be eligible to receive, contact the experienced tax attorneys at Anderson Advisors. We can help you lower your property taxes, as well as provide a host of other benefits, such provide asset protection and federal income tax planning.