Believe it or not, the Texas constitution actually places various restrictions on the ability of the Legislature and local governments to impose taxes. Most of these restrictions concern local property taxes, with section 1-e prohibiting statewide property taxes.
The Texas Constitution sets out five basic rules for property taxes in our state. They are:
- Taxation must be equal and uniform. No single property or type of property should pay more than its fair share.
The property taxes you pay are based on the value of property you own. If, for instance, your property is worth half as much as the property owned by your neighbor (after any exemptions that apply), your tax bill should be one-half of your neighbor’s. This means that uniform appraisal is very important.
- Generally, all property must be taxed based on its current market value. That’s the price it would sell for when both buyer and seller seek the best price and neither is under pressure to buy or sell.
The Texas Constitution provides certain exceptions to this rule, such as the use of “productivity values” for agricultural and timberland. This means that the land is taxed based on the value of what it produces, such as crops and livestock, rather than its sale value. This lowers the tax bill for such land.
- Each property in a county must have a single appraised value. This means that the various local governments to which you pay property taxes cannot assign different values to your property; all must use the same value. This is guaranteed by the use of county appraisal districts.
- All property is taxable unless federal or state law exempts it from the tax. These exemptions may exclude all or part of your property’s value from taxation.
- Property owners have a right to reasonable notice of increases in their appraised property value
If you know your rights and assert the remedies available, you can play an effective role in the property tax appraisal and assessment process.