Tarrant County Property Tax

Tarrant County has the highest number of property tax accounts in the state of Texas. Property taxes can be complex and may differ from area to area, depending on many factors. Here are some of the basic things to know about property taxes in Tarrant County, Texas.

5 Things Investors and Homeowners Need to Know About Tarrant County Property Tax

1. How Tarrant County Calculates Property Tax
2. Tax Rates
3. When Property Taxes are Due
4. How to Pay Property Taxes
5. Ways to Lower Tax Liability

Tarrant County is the third-largest county in Texas by population and boasts the highest number of property tax account in the entire state. There are around 1,811,688 parcels of property in Tarrant County. With an area of 902 square miles, this county is located just west of Dallas County, which is the second largest in Texas after Harris County.

Tarrant County has a population of over 2,084,931 spread across 41 cities. The largest cities include Fort Worth, Arlington, and Grand Prairie. This county also has 21 independent school districts (ISD). To get a feel for the size of Tarrant County, the estimated market value is over $194 billion. However, after factoring in exemptions, credits, and other exclusions, the total taxable property value sits around $174 billion. Between the county and related taxing units, 41 cities, and 21 ISDs, there are 70 taxing units that contribute to property tax rates for parcels within their districts. In 2018, Tarrant County collected annual revenue from taxing entities totaling $23,262,414.

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

In recent years, Texas has seen growth in many areas which have impacted the fair market value of property in Tarrant County. In tandem with this growth and increased value of property, local governments have faced increased pressure to provide services which require funding. Because of these factors, many taxing units have also increased the tax rates applied to property. This combination has led to increased real estate taxes for property owners.

1. How Tarrant County Calculates Property Tax

There is no state property tax levied in Texas. However, the state has laid out how local taxing entities may levy property tax. Local governments can assess and levy taxes based on state law. Generally, an appraisal district will handle the assessment of property for value and apply any exemptions to create a list of property by taxable value. Keep in mind, these values can be protested. Any protests will be heard by an Appraisal Review Board. The tax list is then sent to local taxing units, such as a school district, which determine the budget needed for the year and then calculate the necessary property tax rate.

Property taxes in Tarrant County are calculated through a process which starts when the property is appraised for its current value. This is usually the fair market value, which is what the property could sell for to a reasonable buyer. Certain situations can impact the value of a home, such as major home improvements or damage caused by a storm. When investing in real estate, you may want to protect your investments from a variety of issues. Ways to protect your assets can include setting up an LLC and buying real estate with land trusts.

The price that a home sells for is often used to determine the assessed value for property taxes. The assessors will also apply an annual percentage increase in value each year for the property. Recent tax reform aims to limit how fast the value of property can increase each year for the purpose of taxation. One component of this reform streamlines the process of protesting an appraisal, allowing taxpayers to argue the assessed value for a variety of reasons. After the review board has heard any cases, the final property tax roll is forwarded to the local taxing units in the county. These taxing units determine the final tax rates.

2. Tax Rates

Property tax rates in Tarrant County are set by local taxing units based on their budgetary needs. Tax units levy taxes on property in their jurisdiction. A single parcel of property can be in multiple jurisdictions and taxed by multiple entities. Taxing entities include the county, county hospital, school districts, police and fire, hospitals, emergency medical services (EMS), and more. The funds also pay for many public services, such as road and street maintenance, courts, and even water, sewage, and drainage services.

Once the taxing units determine how much money they need to raise to meet budget, they determine the tax rate for their jurisdictions. Parcels of property that are subject to multiple jurisdictions will see higher overall tax bills. Tax reform has limited how much taxing units can raise tax rates each year before they must call for an election to let voters decide. The tax reform was necessary because rapid growth in Texas has caused property taxes to skyrocket in recent years. This is largely due to the fact that Texas does not have a statewide property tax or even income tax levy. Without other tax revenues, local governments must rely on property taxes which are quite high compared to counties in other states.

All of these factors lead to Texas having some of the highest property tax rates in the U.S. However, the overall tax burden in Texas may not be the highest in the U.S. since there is no income tax or capital gains tax.

To determine the property tax rates for a parcel of land, you can check with a local real estate agent, the Tarrant County Tax Assessor-Collector, or an experienced tax attorney. Tax rates vary by taxing unit depending on budgetary needs. The City of Fort Worth may have an estimated tax rate of 0.785, while the City of Benbrook only has a tax rate of 0.64. Since multiple taxing units can levy a property tax on a single parcel, trying to calculate your final property tax bill can be difficult to do accurately. It may be best to consult with an experienced tax professional.

3. When Property Taxes are Due

Tax bills for property taxes are sent out each October and are due by January 31st. Penalties and interest will start to accrue after February 1st. Property tax records that remain unpaid after the deadline become delinquent and can quickly add penalties and interest. Taxpayers can expect to pay a 6% to 7% penalty in February, including interest. Penalties can quickly escalate to 18% by July, with an additional 1% interest added to each additional month.

If the county decides to employ an attorney to collect the debt, there may be additional fees assessed. This additional collection penalty can range from 15% to 20% on top of the other penalties and interest. It is the responsibility of the property owner to pay any property taxes due, even if you did not receive a bill.

4. How to Pay Property Taxes

There are many ways to pay your property taxes in Tarrant County. Taxpayers can pay online using a credit card, debit card, or direct transfer from a bank through ACH withdrawals. Be aware that there may be additional fees when using certain methods of payment, such as a credit card. Residents can also pay by phone, or by visiting Tarrant County tax office locations in person. These locations may have self-service kiosks as well as drop boxes during busier months. Taxpayers making payments in person at a Tarrant County Tax Office can use cash and checks or money orders on top of the already mentioned methods. Checks and money orders can be mailed as long as they are post-dated before the due date.

5. Ways to Lower Tax Liability

There are many ways to lower your tax liability. In Tarrant County, Texas, you may be able to protest the appraised value of your home with the Tarrant Appraisal District. The district will also apply any exemptions, credits, and other exclusions. Property taxpayers in Tarrant County have the right to equitable taxation between similar properties, and protesting can be an effective way to lower your tax bill. A professional tax attorney can help you prepare your case and even represent you when you meet with the Appraisal Review Board (ARB). Even if the ARB denies your protest, an attorney may be able to help appeal the decision. The appraisal district may not apply exemptions you qualify for so you must ask or protest.

There are other ways to lower your tax liability. Taxpayers can claim certain property tax exemptions, such as the homestead exemption, which can lower the taxable value of personal property. There are exemptions available for homeowners who are over 65, as well as a disability exemption for people with a qualifying disability, including disabled veterans. Some businesses in Texas can also claim a Freeport exemption if the business is transitional or only in the state temporarily. And residents and businesses may also seek exemptions for pollution control measures, green energy initiatives, and for historic sites.

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

Tarrant County is the third-largest county in Texas after Harris and Dallas Counties. To get a feel for the differences in size, Harris County is the largest in Texas and one of the largest counties in the United States, with an estimated value of $574.3 billion. In contrast, Dallas County is the second largest in Texas, with a value of $292.4 billion. Tarrant County comes in third with $194 billion and it has the highest number of property tax accounts in Texas—over 1,811,688 accounts.

This high number of taxable accounts may carry the benefit of allowing the Tarrant County taxing units to maintain constant tax rates, compared to nearby counties. There is no statewide property tax or income tax in Texas, which means higher property taxes are required to offset the budgetary needs. Other states, such as New Jersey, have high property taxes on top of other taxes. Take California, for example. Like Texas, California has implemented property tax reform in recent years to limit tax increases. Still, Californians have multiple taxes to consider which Texans do not, such as income and capital gains tax.

These additional taxes can have a major impact on real estate investors. For example, a common real estate investing technique is to flip a home. Depending on the length you own the property, some states may give preferential taxation to longer investments. Typically, capital gains tax on a long-term investment is better than a short-term investment. Texas has a capital gains tax exemption, while California does not. Due to the beneficial taxation in Texas, many businesses have been moving there to take advantage of the exemptions.

Tarrant County Property Taxes

Tarrant County is the third-largest county in Texas, with the highest number of taxable property accounts. Property taxes are based on the value of property, which is known as an ad valorem tax. There is no state property tax in Texas, so local governments—like the Tarrant County Appraisal District—oversees the assessment of property value each year.

Taxpayers have the opportunity to protest a property value appraisal if the homeowner feels it is unreasonable. This is where a tax professional can really help. You may want to retain a firm to protest on your behalf each year, especially if you own a business or rental property. The appraisal district will apply property tax exemptions and forward protests to the Appraisal Review Board to make final decisions.

Once these property values are finalized, they are sent to the local taxing units who then determine additional property tax rates based on their budgets. The final property tax due is then mailed out to taxpayers on record. These bills must be paid on time or additional penalties and interest will be added. There are many ways Anderson Advisors can help you with property taxes in Texas. Our tax attorneys can help you understand the taxes and how to minimize them. Reach out to us today to learn more about ways to lower your tax liability and protect your assets.