Author: Joseph

Important News Regarding Property Tax Deductions on Federal Income Taxes

Late yesterday afternoon, the IRS issued guidelines regarding the deductibility of 2018 prepayments. While tax bills sent and paid in 2017 are still deductible (nothing has changed for 2017), the new guidelines from the IRS indicate that 2018 taxes held in escrow until the 2018 tax bill is calculated in October are not deductible.

The Austin American Statesman covered this story in this morning’s paper at http://www.statesman.com/news/local/irs-statement-dampens-austin-area-rush-prepay-property-taxes/aWByiUkSJo0xKkcqWZPbPO/ and the IRS provides examples at https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-assessed-and-paid-in-2017.

If you have additional questions about your federal income taxes, we strongly recommend contacting your CPA.

I just got my tax bill! Is it too late to file a protest?

Many homeowners are being hit with sticker shock at the size of their tax bills. If you did not file a protest by May 31st this year, it is most likely too late but there are still a few options open if you qualify for one of the late protests below.

Clerical/Characteristic Error (25.25c)

You can back-file a protest for up to 5 tax years if the Appraisal District has a qualifying error on your property.  You must pay your taxes on-time in order to qualify. These types of errors consist of:

1. Clerical/data entry error – such as transposing numbers, entering an 8 instead of a 5, etc.
2. Multiple appraisals of your property – such as taxing you for two identical houses when you only have one on your property.
3. Inclusion of property that does not exist in that form or location – such as taxing you for your neighbor’s pool because of faulty satellite imagery or for a garage that does not exist.
4. Appraisal District failing to update ownership information leading to a tax bill you are not responsible for.

Substantial Error (25.25d)

You are eligible to file this type of protest if your property was substantially over-appraised. In order to qualify for this protest type, you first have to prove that your property was one-third over-appraised. Multiply your appraised value by 0.75 – you must prove that your property is worth less than this value in order to qualify. (Example: You just paid $300,000 for a property but the Appraisal District appraised it for $400,000.)

You must file your protest before January 31st. You must pay your taxes on-time in order to qualify. There is a 10% penalty for filing a successful 25.25d protest.

Failure to Receive Notice (41.411)

If the Appraisal District never sent you a copy of your Notice of Appraised Value (usually mailed in April) then this could be an option for you. You may qualify if:

1. You provided the correct mailing address to the Appraisal District and they failed to update it.
2. Mail was returned to the Appraisal District.
3. You were a victim of mail theft and have documented evidence from the USPS to prove it.

There are other potential options that are even more rare. If you have any questions please don’t hesitate to contact our office at 512-339-6671 or email us at info@texasprotax.com.

Storm Damage Information

Update: As of September 18th, Montgomery and Fort Bend Counties each unanimously voted to reappraise property.

We hope this message finds you safe as we know the dramatic impact we have all faced in the aftermath of Hurricane Harvey.  Even if the storm did not directly affect your property we all have friends and family members that are dealing with the devastation.  Our thoughts go out to each of you as you working to replace, rebuild and come out of this disaster.

During this difficult time of transition and rebuilding, we are here to answer any of your questions about your property value and how your property’s value might be impacted by the storm.  Some of our clients have already reached out to ask a few questions.  This is email is an attempt to try and help answer some of the questions we have already received as well as some additional questions you might have.

One question that has been raised concerns how the storm affects your value for the current tax year (2017).  Specifically if your value for 2017 can be lowered due to the flooding and damage caused by the storm?  The answer at this point is – maybe!  Since the Governor declared Harris and most of the surrounding counties a disaster area it does open the door for a reappraisal of your property.  However, neither the taxpayer, Texas Protax nor the Appraisal District has the authority to request or conduct a reappraisal after a disaster on their own.  The authority to request a reappraisal is in the hands of the local taxing jurisdictions.  If a taxing jurisdiction requests for the properties within their boundary to be reappraised, then the appraisal district must comply with that request.  Furthermore, some of the taxing jurisdictions could request a reappraisal while others may not.  For example, the Houston Independent School District can call for the reappraisal for all property within their boundary, but the new value determined by the reappraisal would be limited to only the Houston ISD’s taxing authority and does not extend to Harris County, the City of Houston or any other jurisdiction that levies taxes on your property.  Also, if the value is lowered based on the reappraisal request, then the taxes based on the lower value would be prorated from the date of the reappraisal through the end of the year.  Therefore you would be taxed from January 1^st to August 24^th at the full market value as of January 1 and then from August 25^th to December 31^st on the new reappraised value.  If all or more than one jurisdiction requests the reappraisal, then the new value would apply to any jurisdiction that has requested the reappraisal.

We do not think the value based on a reappraisal is one that can be protested.  State law does not require the appraisal district to send a notice of new value if the appraisal district lowers the value, therefore, the appraisal district may not have to send notices of the new valuations.  If the appraisal district is ordered to reappraise property, then after the reappraisals, the appraisal district will submit the new values directly to the taxing jurisdiction.

The second question we have been asked is whether or not evidence of the flooding and loss can be used as evidence for this year’s (2017) hearing to show the loss of value of your property?  The short answer is no.  If the taxing jurisdictions do not request a reappraisal, then the value of your property is based on the condition as of January 1, 2017.  Any damage or change that occurs after January 1 of the current tax year is not considered relevant as evidence at a hearing for 2017.

Although any evidence of damage may not be able to affect the value for 2017, we can definitely use your information for 2018!  A few things to remember for 2018:

• Take pictures and keep all receipts for repairs or insurance claims.  This information is very helpful at the hearings.  We will send you a Request for Information email in March 2018.  Our annual questionnaire an excellent time to share information with us concerning your property’s condition as of January 1.
• If you have not completed your repairs, please make sure we know when the work was completed.  We will need to know which repairs were made before or after January 1.
• If you make all repairs to your property prior to January 1, 2018, please still send us the information.  Your repair information could be helpful in differentiating between a repair and a remodel.

For property that is your homestead, please know there are special rules concerning the cap and reappraisal in the year after a disaster.  If you have to replace your home, and the new structure does not exceed the original square footage of your home and the exterior of the replacement is of similar quality as your original home, then the appraisal district cannot change your homestead qualifications or increase your cap value by more than the allowed 10%.  If you replace your home with a bigger or higher quality home, then the appraisal district can declare new value and add additional value to your previous cap value.  If you have specific questions concerning your homestead eligibility, please do not hesitate to contact us!

We understand the stress and urgency during this time of disaster and will continue to be available to help in any way we can with the appraisal and assessment of your property.  However, as we have tried to explain, the reappraisal process is entirely out of our hands, but we will strive to keep you informed as soon as we know more information.  As government agencies are coming back on line we will look for announcements and information and keep you up to date on any changes that may come.    We have included a bulletin from the Comptroller’s office with some additional information about Disaster Reappraisals.  The letter from the Comptroller also includes a link to the Comptroller’s website with more information.

Thank you for being a valued Texas Protax client and we are committed to working with you during this difficult time of repair and rebuilding.  If you have any questions or concerns please let us know and we will gladly address them.

• Please see attachments from the Texas Comptroller of Public Accounts and also the Texas Property Tax Code concerning this issue.

Comptroller PDF

23 PDF

Sincerely,
Your Texas Protax Team

Property Tax Exemptions

Great news for procrastinators! The Texas legislature passed a law this summer extending the deadline to file certain exemptions.

Homestead/Over 65: The deadline has been extended to two years after the delinquency date of the taxes for that year. For example, you have until January 31, 2018 to file for the 2015 tax year.

Disabled Veteran: The deadline has been extended to five years after the delinquency date of taxes for that year. For example, you have until January 31, 2018 to file for the 2012 tax year.

Below is a list of exemptions that we deal with most often. A complete list can be found on the Texas State Comptroller Website here.

Homestead

You are eligible to claim a Homestead Exemption on your primary residence as long as you are: 1) living there as of January 1^st of that year and 2) List that address on your driver’s license. This exemption gives you discounts on many taxing jurisdictions that lower the taxable value of your home. It also puts a 10% limit on how much the taxable value of your home can increase from one tax year to the next.

Example: Your property had a homestead exemption in 2015 and was valued at $100,000. In 2016, the market value jumped up to $200,000 – you would only be taxed on a 10% increase from 2015 or $110,0000 ($100,000 + 10% = $110,000). This is an extremely valuable exemption in our booming market.

The deadline to file for the Homestead Exemption is one year after taxes became delinquent for that tax year. For example, the deadline to file an exemption for the 2015 tax year is January 31^st, 2017 (one year after the deadline to pay your 2015 tax bill).

Over 65

You are eligible to claim an Over 65 Exemption on your homestead the year that you turn 65. The Over 65 exemption entitles you to bigger discounts from taxing entities than a normal Homestead exemption. It also puts a tax ceiling on the dollar amount that you pay to your local school district.  The freeze amount will remain, unless additional “value” is added to your property. 

For example, if you turned 65 in 2015 and paid Austin ISD $5,000.00 you would never pay more than that dollar amount to Austin ISD. Your tax freeze also stays with you as long as you move somewhere in the state of Texas.

The Over 65 Exemption also allows you to defer paying property taxes for as long as you own the property. You will still accrue 8% interest each year which will be collected once the property has sold or transfers ownership.

Disabled Person

The benefits of this exemption are similar to the Over 65 exemption including bigger discounts from certain taxing entities and a tax ceiling on the school district jurisdiction. You must meet the Social Security Administration’s definition of disability in order to qualify.

Disabled Veteran

Veterans of the US Armed Forces qualify for a Disabled Veteran exemption if they have a disability rating of 10% or more. The discounts vary depending on your disability rating.

Solar and Wind-Powered Energy Devices

If you have solar or window-powered energy devices on your property, please contact our office about this exemption. You are eligible to claim the exemption if you have solar or wind-powered devices on your property but in some cases the exemption will not benefit you. The exemption removes the value of the device(s) from the taxable value of your property. This application is due by April 30^th but will remain in effect on your property unless there are any changes to the equipment.

Historical or Archaeological Sites

If your property is a designated historic building or archaeological site or has historical significance, you may be eligible for the Historical Exemption. This gives discounts for the jurisdictions that choose to grant the exemption and the discounts are different for every property. Contact our office for more information or refer to the Comptroller regulations here.

When is the deadline to file a protest?

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas in finibus neque. Vivamus in ipsum quis elit vehicula tempus vitae quis lacus. Vestibulum interdum diam non mi cursus venenatis. Morbi lacinia libero et elementum vulputate. Vivamus et facilisis mauris. Maecenas nec massa auctor, ultricies massa eu, tristique erat. Vivamus in ipsum quis elit vehicula tempus vitae quis lacus.

Williamson CAD Publishes Notices of Appraised Value Online

Williamson Central Appraisal District published their 2016 Notices of Appraised Value online! View yours by searching their database here.

Storm Damage Information

At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quasnim.