Property appraisal/homestead exemption

[Borachio 417]

My girlfriend bought her home in July of 2021 in Westlake.  She immediately applied for the homestead exemption to receive the 10% cap on yearly property value increases.   The 10% cap did not go into affect until January 1st 2023 since you have to be in your home for 12 months for the homestead exemption to go into affect. 

During this period the price of her home's property value and all the ones in her neighborhood doubled between 2021 and 2022.  While her neighbor's homes only increased by 10%, she got no break. 

Is she just screwed?  Poor timing on buying her home?  Is it worth talking to a lawyer to see if the 10% property value cap can be retroactively applied for the year 2021-22?

She had a formal hearing with Austin's central appraisal district last week and they took off $100,000 from her property value,  but could do nothing about the 10% cap that didn't get applied until 2023.

[Pato del Muerto 52616]

If she bought the home on the open market, the 22 value must be set at the sales price per law. The 23 value, or at least taxable value, should be no more than 10% of that value. 
 

and as far as poor timing, I’d say buying a house right before it doubles in value over 2 years is fucking outstanding timing. 

Edited September 24, 2023 by Pato del Muerto

[NeverMarryAStripper 21943]

I'm sure she did what everyone does and filed the request for the sales/purchase price information in the trash

[Judge Roybeanbag 11821]

6 hours ago, Borachio said:

My girlfriend bought her home in July of 2021 in Westlake.  She immediately applied for the homestead exemption to receive the 10% cap on yearly property value increases.   The 10% cap did not go into affect until January 1st 2023 since you have to be in your home for 12 months for the homestead exemption to go into affect. 

During this period the price of her home's property value and all the ones in her neighborhood doubled between 2021 and 2022.  While her neighbor's homes only increased by 10%, she got no break. 

Is she just screwed?  Poor timing on buying her home?  Is it worth talking to a lawyer to see if the 10% property value cap can be retroactively applied for the year 2021-22?

She had a formal hearing with Austin's central appraisal district last week and they took off $100,000 from her property value,  but could do nothing about the 10% cap that didn't get applied until 2023.

I’m not sure that 12 month thing is right.  She should have gotten the exemption at least starting the 2022 tax year, not 2023.  

[Borachio 417]

Yeah,  good timing as far as the value of the home doubling, but instead of paying property taxes on say 650,000, she is paying taxes on 1.2 because the value of the property value doubled, before the 10% cap went into effect. 

According to this link,  since she filed for the homestead exemption right when she bought the house in 2021, she had to wait a year for it go into effect.  And she gets the 10% cap for 2023 only. That's the way I read it. 

https://www.trinityoaksmortgage.com/homestead-exemptions-in-texas/

Prior to January 1, 2022, homestead exemptions could not be filed until the year after a home was purchased. As of 2022, homeowners may file for a homestead exemption immediately upon closing on their property, so long as an exemption has not yet been filed for that tax year.

 

[Pato del Muerto 52616]

Ok so she bought it in July 2021, when 2021 values were already finalized.  She paid her portion thereof when the bill came out. For the 2022 valuation, she should have provided the appraisal district with a settlement statement showing she bought the home less than a year before, and they have to use that value for that year.  Provided it was on the open market, establishing the final sales price as market value. 
I don’t believe they are allowed to upvalue it from the sales date to 1/1/22.  So the 2022 valuation should have been 650k using your number. 
now for 2023 the HS cap should apply and the taxable valuation should be 110% of 650k.  Though they will maintain an actual value valuation. 
 

i believe that is all correct. If that’s not what happened, I have no idea if there is anything that can be done to affect taxes retroactively. 

[horn4life 3783]

Her purchase price was the value of the home at the time of sale.  Property taxes are paid in Texas on the prior year instead of in advance.

You need to appeal the appraised price, as it was the value at the time of sale. And the increase in appraised value may indeed be $600,000 more, but she should only babe on the hook for a 10% increase per year.  But this also should have been done the second she received the proposed value letter.  I don't know what you are talking about with a 12 month anything related to homestead.  It's either your homestead or it is not.  

Did she buy the home and not move in as her homestead?  If not I don't see how the value should not have been the purchase price.  Unless she should have protested the error sooner and there is some clock on that legally.

I had a high appraisal on a house I bought at Auction.  I went to the appraisal district, showed the documentation of the sale price and they adjusted it to the lower price.

YOu might also asked for this to be moved over to the all encompassing real estate thread.

[horn4life 3783]

13 hours ago, Borachio said:

Prior to January 1, 2022, homestead exemptions could not be filed until the year after a home was purchased. As of 2022, homeowners may file for a homestead exemption immediately upon closing on their property, so long as an exemption has not yet been filed for that tax year.

 

Well that sucks.  The amount of Tax increases the Texas government has created via fees, sales tax on restaurant liquor sales, snowpocolype consumer pass through, and shit like this is why the coffers are overflowing with tax revenue.  Shit like this is fucked.  Especially when we allow ridiculous Ag exemptions for the super rich to avoid property taxes.

Sorry.

[Catpfish 618]

15 hours ago, Borachio said:

Yeah,  good timing as far as the value of the home doubling, but instead of paying property taxes on say 650,000, she is paying taxes on 1.2 because the value of the property value doubled, before the 10% cap went into effect. 

According to this link,  since she filed for the homestead exemption right when she bought the house in 2021, she had to wait a year for it go into effect.  And she gets the 10% cap for 2023 only. That's the way I read it. 

https://www.trinityoaksmortgage.com/homestead-exemptions-in-texas/

Prior to January 1, 2022, homestead exemptions could not be filed until the year after a home was purchased. As of 2022, homeowners may file for a homestead exemption immediately upon closing on their property, so long as an exemption has not yet been filed for that tax year.

 

Maybe I am mis-remembering, but it wasn't really a waiting period of 12 months.  You had to be the owner/living in the house as of January 1st to claim the exemption.  Buying in 2021 means that you couldn't claim the exemption until January 1, 2022.  The tax appraiser still gets one bite at the apple before the homestead would kick in, meaning that even though homestead is filed, they aren't limited to a 10% increase that first year.  That could be where a big part of the surge in taxable value comes from.  

Also, I don't think there was ever a rule that said you HAVE to get a valuation equal to what you paid for the house.  As a matter of fact, I know someone that bought in 2021 and when the valuations came out, the Williamson county appraisal district used their own purchase price (plus an estimated increase in value of about 20%) as a direct comparable against them.   

 

 

[Catpfish 618]

To further expound, let's say that home was on the tax rolls for $650,000 when she bought it.  That value was "established" on 1/1/2021.  Your friend bought in 7/2021 and still kept the original homestead exemption from the previous owner for the rest of the year.  However, when she filed the homestead on 1/1/2022, there was no homestead protection because the old exemption had "expired" and hers was just taking effect.  That is what I mean by the tax appraiser gets one bite at the apple to catch up.  Her 10% cap would come into play as of 1/2023.

 

[Borachio 417]

1 hour ago, Catpfish said:

To further expound, let's say that home was on the tax rolls for $650,000 when she bought it.  That value was "established" on 1/1/2021.  Your friend bought in 7/2021 and still kept the original homestead exemption from the previous owner for the rest of the year.  However, when she filed the homestead on 1/1/2022, there was no homestead protection because the old exemption had "expired" and hers was just taking effect.  That is what I mean by the tax appraiser gets one bite at the apple to catch up.  Her 10% cap would come into play as of 1/2023.

 

Yes,  I belive this is what happened.  She had no protection from the appraisal value increase until her 10% cap kicked in. 

[Pato del Muerto 52616]

4 hours ago, Borachio said:

Yes,  I belive this is what happened.  She had no protection from the appraisal value increase until her 10% cap kicked in. 

That’s so that when a property changes hands, the prior homestead caps are erased and the district gets to bring the taxes up to current value before the cap limits their value again. Otherwise they’d be stuck at 10% in perpetuity other than someone buys it as non-HS. 

 

6 hours ago, Catpfish said:

Also, I don't think there was ever a rule that said you HAVE to get a valuation equal to what you paid for the house.

I could have sworn I found that online, and my discussion in 2022 with the county appraiser I thought confirmed it. He did make an adjustment from the closing date to 1/1/22 but I thought that was only because my house was never listed on mls so it didn’t meet the criteria of market sale as defined by Texas. 
but now I can’t find anything of the sort, so yeah work off of the idea that it can define the market value at close but they can apply an adjustment for changes from close to 01jan of the next year. 

[Surly Bevo 25173]

Pics of girlfriend?

[El Tri 412]

she should have submitted her closing documents to protest 2022 values and have them change the assessed value to what she paid for the house

[Catpfish 618]

11 minutes ago, El Tri said:

she should have submitted her closing documents to protest 2022 values and have them change the assessed value to what she paid for the house

Not to pick nits, but there is no guarantee that they'll accept the sales price.  I've seen several times that they will adjust the sales price (one instance +20%) based  on the time of the year bought and I've seen them take the sales price as the taxable value when the house was "undersold".  It really depends on the situation and, probably, how they are feeling that day because not a lot of what they do makes sense.

[El Tri 412]

19 minutes ago, Catpfish said:

Not to pick nits, but there is no guarantee that they'll accept the sales price.  I've seen several times that they will adjust the sales price (one instance +20%) based  on the time of the year bought and I've seen them take the sales price as the taxable value when the house was "undersold".  It really depends on the situation and, probably, how they are feeling that day because not a lot of what they do makes sense.

there is an automatic way to protest this, it's called a quick protest (at least it is in williamson county) and you put the purchase price and upload your closing docs. I remember doing something similar in travis county, and my friend who lives in pflugerville did this as well (althought it was beyond the year, so they backdated the assessed value and added like 2% for the past 2 years)