Texas Property Tax

[RWB]

I have always been told that renters pay their fair share of property tax via their rent that the homeowner uses to pay property tax on the property.

We have an RV park that is full of long term renters right down the street.

My home appraised value is $810K with homestead its tax value is $698.5K resulting in a tax bill of $12.9K

The RV Park has a value of $1.27M no homestead exemption resulting in a tax bill of $23.6K

This park has 85 sites that each get $600 per month so I estimate annual revenue of $300K (50% Occupancy) to $600K (100% Occupancy)

So a single home that creates no income and only 1 child enrolled in school pays $13K in taxes, while an RV park that creates $300K to $600K in revenue and sends 20+ kids to our district pays $26K? Does not seem like in this instance renters are paying their share of the tax bill.

Just thought I would share another perspective on Texas Property Tax inadequacies.

[bcmuzzy]

Texas sucks, when it comes to property taxes.


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[EarleyBird]

Yes! It's an even bigger racket than the DWI thread.

[Dr. Evil]

Originally Posted by bcmuzzy

Texas sucks, when it comes to property taxes.


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Try living in a state with state and local income taxes.

[Drycreek3189]

Originally Posted by bcmuzzy

Texas sucks, when it comes to property taxes.


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Yes it does, but all states have something in lieu of property taxes, like state income taxes, etc. They all want their piece of the pie and we get to supply the ingredients, bake it, and serve it up. Oh joy !

[BrianL]

Their homes are RVs, not property, so they don't pay property taxes just sales tax when they buy. They probably should revalue the RV park to get more $$$....

Sell your house and buy a Prevost. Join the park

[voke]

And our forefathers went to war over a 2% tax on stamps and tea.

[Uncle_Milty]

Problem is the park itself is valued at 1.2 so they are taxed off that value. The revenue that it generates is not part of the property so it is not taxed via property tax.

Never been a fan of the TX Property Tax system myself but I am thankful to live in an area where the valuations aren’t as high as your area

[Pintail45]

Originally Posted by RWB

I have always been told that renters pay their fair share of property tax via their rent that the homeowner uses to pay property tax on the property.

We have an RV park that is full of long term renters right down the street.

My home appraised value is $810K with homestead its tax value is $698.5K resulting in a tax bill of $12.9K

The RV Park has a value of $1.27M no homestead exemption resulting in a tax bill of $23.6K

This park has 85 sites that each get $600 per month so I estimate annual revenue of $300K (50% Occupancy) to $600K (100% Occupancy)

So a single home that creates no income and only 1 child enrolled in school pays $13K in taxes, while an RV park that creates $300K to $600K in revenue and sends 20+ kids to our district pays $26K? Does not seem like in this instance renters are paying their share of the tax bill.

Just thought I would share another perspective on Texas Property Tax inadequacies.

In Texas RVs are considered personal property (as opposed to Real) so yes, they aren't taxed like homes are.

Similar thing happens when you have 5 kids living in a 50k house going to school while the couple down the street in a 500k house only has one or two kids but pays 10x more in property taxes.

[kdm015]

if my house was that nice, i wouldnt want to be next to an rv park. the tax man is about 40% behind market value on the tax rolls

[Pintail45]

Originally Posted by voke

And our forefathers went to war over a 2% tax on stamps and tea.

The issue there wasn't the taxes themselves but "taxation without representation."

Britain f'ed around and found out.

[coker737]

I was paying $9k in Grapevine. Moved to Casper Wyoming and bought a larger home on acreage and pay $1700.00.

[Bullseye07]

Property tax is essentially a tax on unrealized gains based upon estimated current value. Not on revenue or income generated.


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[flywise]

Originally Posted by bcmuzzy

Texas sucks, when it comes to property taxes.


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Word
We will never own our homes in Tx.....at least not in the since that i pay it off and never pay anther dime to keep it

[Pintail45]

Originally Posted by Bullseye07

Property tax is essentially a tax on unrealized gains based upon estimated current value. Not on revenue or income generated.


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It’s based on “market value,” unrealized gains don’t matter till you go to sell it. And then you get hit with a whole ‘nother tax.

[W E H]

Originally Posted by Pintail45

In Texas RVs are considered personal property (as opposed to Real) so yes, they aren't taxed like homes are.

Similar thing happens when you have 5 kids living in a 50k house going to school while the couple down the street in a 500k house only has one or two kids but pays 10x more in property taxes.

Probably paying a lot more than 10x with exemptions on a $50000 homestead.

[Mitchell8]

Problem is your paying over 1k a month in taxes till you die to send your 1 kid to a school plus all the other county stuff. 13k is a lotttt of money

[curtintex]

Don’t forget you get to pay income tax on the profits realized from the RV park. Uncle Sam gotta get his too.


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[Bullseye07]

Originally Posted by Pintail45

It’s based on “market value,” unrealized gains don’t matter till you go to sell it. And then you get hit with a whole ‘nother tax.

I was using it as a reference. Gains become realized once you sell.


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[EarleyBird]

Originally Posted by Dr. Evil

Try living in a state with state and local income taxes.

Try moving out of that state, just don't bring the BS when you do.

[Jon B]

Originally Posted by Pintail45

The issue there wasn't the taxes themselves but "taxation without representation."

Britain f'ed around and found out.

Yes they did!

[RWB]

Originally Posted by curtintex

Don’t forget you get to pay income tax on the profits realized from the RV park. Uncle Sam gotta get his too.


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Kirk, no doubt and thank you and your company for the new HEB right around the corner from my house and the RV park. Seriously every time I went by the HEB construction site your guys were getting it, even late into the night. I total understand running buisness and everyone wants their cut. I just think Texas system is antiquated and needs to adjust. There should be some kind of adjustment for multifamily income producing families.

[curtintex]

Originally Posted by RWB

Kirk, no doubt and thank you and your company for the new HEB right around the corner from my house and the RV park. Seriously every time I went by the HEB construction site your guys were getting it, even late into the night. I total understand running buisness and everyone wants their cut. I just think Texas system is antiquated and needs to adjust. There should be some kind of adjustment for multifamily income producing families.

I totally agree with you. I owned duplexes for a while, my property tax bill was ridiculous and then I got to pay federal taxes on my gains. I got to keep what was left over. Oh yeah, then I sold it and got to pay taxes on those gains.

Thanks for the compliment on my guys. Those guys work hard and take a lot of pride in what they do. Enjoy the new HEB.

[Darton]

I have the same value house that I did in Texas here in Oklahoma and make more money than I did in Texas. After paying both property tax and state income tax I am still coming out $6k ahead.

[Hogmauler]

No state income tax has always been Texas claim to fame. They make it up in property tax. I think when you turn 65 your tax rate is frozen. But they get around that by continually raising the value of your property. Somebody has to pay for the invasion down south.

[Mertzon Man]

It’s totally off the rails! I have a 7 acre lot no house, that was taxed at 98k last year, they upped it to 250k in one year.

[AntlerCollector]

Originally Posted by Mertzon Man

It’s totally off the rails! I have a 7 acre lot no house, that was taxed at 98k last year, they upped it to 250k in one year.

If you’re not protesting every year you should be. They dropped mine by $48,000 this year when I protested it.

[hopedale]

OP, I feel your pain.

Already told the wife when we retire we are going to have to move. I can see us fast approaching a $12K property tax bill the way things are currently going.

[Dusty Britches]

By comparision, Texas property taxes aren't the worst.

My brother lives in Connecticut and that state has some serious property taxes - they tax your land, your house, your vehicles, your trailers, your boats, and a general "furnishings" tax, all property every year, and that's after you pay the state sales tax when you buy these things. Then they have a significant state income tax in which no property taxes can be deducted.

I suspect that California is along the same lines.

So yes, our land / home property taxes seem high but by comparison, Texans do not pay as much as many states. On the other hand, many states pay less but they also have income taxes.

[RWB]

Originally Posted by Dusty Britches

By comparision, Texas property taxes aren't the worst.

My brother lives in Connecticut and that state has some serious property taxes - they tax your land, your house, your vehicles, your trailers, your boats, and a general "furnishings" tax, all property every year, and that's after you pay the state sales tax when you buy these things. Then they have a significant state income tax in which no property taxes can be deducted.

I suspect that California is along the same lines.

So yes, our land / home property taxes seem high but by comparison, Texans do not pay as much as many states. On the other hand, many states pay less but they also have income taxes.

I dont disagree with you at all check out this link which shows Texas in the middle of the pack.

https://wallethub.com/edu/states-wit...x-burden/20494

I honestly dont think the problem is the tax amount we pay in total, the problem is how much is being driven by property tax. My post was just to highlight one way that the property tax system in Texas is antiquated and that it is burdening single family households unfairly.

[Dusty Britches]

So considering we are #32 / 50, I'd say we are doing well. And the best part - they do not punish the producers with an income tax.

I would like to see our taxes restructured to take the bulk of local support off of the landowners by the state reallocating more O&G funds to education.

[Briar Friar]

Originally Posted by AntlerCollector

If you’re not protesting every year you should be. They dropped mine by $48,000 this year when I protested it.

Thank you!

Im trying to figure when do the bonds get paid off where all this tax monies go to pay. I understand infrastructure improvements need funding. I understand those improvements and existing infrastructure will need continued funding of servicing and maintaining. Whereas at some point the divided lands leading to increased volume of tax roll should pay off the debts and tax burden decrease because it has been spread loaded across the land.

Otherwise Im gonna make a killing buying tax liens in the near future.

Good push MrRWB.

[Bigfootwolff]

I am in no way supporting a state income tax, but at least if you lose your job or end up earning less income in a given year, you pay less in taxes due to decreased income. If you live in a state with higher sales tax rates, and choose to alter your buying practices (i.e. buy fewer things, buy used items off of Craigslist, FB Maketplace, or garage sales, etc) you can reduce your annual tax liability. In Texas, as your home values continue to rise year after year, you have no way to control the ever increasing tax bill, even if you lose your job and cut your spending, your property tax requirements will continue to increase. I am not sure what the answer is, but I do think the current property tax system needs to be overhauled.

I heard an idea floated years ago, that for your homestead, you pay property taxes based upon the price you purchased your home . Same amount year after year unless the elected officials vote to increase property tax rates to generate additional tax revenue. This way a homeowner knows his annual property tax liability at the time of purchase and can budget accordingly. The current system allows for homeowners to potentially be taxed out of their homes due to ever increasing taxes. In this proposed system, when the homeowner chooses to sell the home there is a post sale property/home sales tax based upon the sales price/capital gains made by the seller of the home. Think of owning stocks that increase in value year after year. You are not taxed on the stock value increases annually, instead you are taxed one time on the realized gains when the stocks are sold. Similar premise with the above noted system.

I have relatives that live in Tennesse, and their house is worth approximately $350,000. They pay I believe about $1500 per year in property taxes ($900 county and $600 city). Their sales tax is 9.75%, and they have no state income tax. I know some people say their public education system is not as good as other states, but if you are retired and/or living on a fixed income, especially with no school aged children, a state like Tennessee might be an option. If I were to find a home in the same town in Tennessee that was valued at the same amount as my current home in Texas, I would pay about $6,000 less per year in property taxes, which equates to $500 per month. This is significant, especially if I were on a fixed income.

[68rustbucket]

Originally Posted by Darton

I have the same value house that I did in Texas here in Oklahoma and make more money than I did in Texas. After paying both property tax and state income tax I am still coming out $6k ahead.

I spent some time working in the Eufaula area a few years ago. I recall the the sales tax was very high, 10-11%. Please correct me if I’m wrong.

[tvc184]

Originally Posted by Pintail45

In Texas RVs are considered personal property (as opposed to Real) so yes, they aren't taxed like homes are.

No one claimed that renters whether renting a home/apartment or personally owned RV, pays property taxes directly.

The argument that I have always seen is that it is an unfair burden to land owners (whether improved or unimproved) because renters don’t pay taxes. The counter argument that the OP stated is that renters actually do pay their “fair share” of taxes by increased rent. As an example the $600 a month rent on an RV space. The state doesn’t tax the RV for sitting there but the property owner recoups the taxes through higher rent. So the property owner would charge $450 for an RV space but nacks it up to $600 to cover the taxes. If so the RV owner is paying $1,800 a year in property taxes passed through the rent.

Originally Posted by RWB

I honestly dont think the problem is the tax amount we pay in total, the problem is how much is being driven by property tax. My post was just to highlight one way that the property tax system in Texas is antiquated and that it is burdening single family households unfairly.

Absolutely. As you mentioned in the OP, do they pay taxes with higher rent.

The state legislature determines the budget every other year. They are going to get their money. The only question is how. We have a constitutional amendment banning income tax which most people cheered so the how do we pay the $250 billion in revenue to lower or eliminate property taxes? A 25% VAT on everything? A $1 a gallon increase in fuel taxes per gallon? I agree with you, the question is where is it going to come from?

Originally Posted by Hogmauler

No state income tax has always been Texas claim to fame. They make it up in property tax. I think when you turn 65 your tax rate is frozen. But they get around that by continually raising the value of your property. Somebody has to pay for the invasion down south.

It certainly has been but the difference will come from somewhere such as you mentioned, in property taxes.

******

If people don’t want property taxes (so they actually own property) and don’t want income taxes, what is the state going to tax

It seems like a substantial sales tax or VAT is a huge burden on lower income earners unless they get a substantial tax return at the end of the year.

The next legislative session starts in January. The state could eliminate property taxes. They will definitely make up the lose in other taxes however.

So what items are people willing to be taxed?

[DedDuk]

If I understand the OP thoughts, he believes the people own the RV park or live in it should pay more in property tax. In exchange your think you're going to pay less? Thats not how the govt. works. If they over tax you, you're not getting it back, they are going to find somewhere to spend it.

[Slaunch]

Texas sucks when it comes to property taxes. I wish Abbott would learn from how the South Dakota governor does it. We are far behind on this front and there is no reason for it.

[curtintex]

Originally Posted by DedDuk

If I understand the OP thoughts, he believes the people own the RV park or live in it should pay more in property tax. In exchange your think you're going to pay less? Thats not how the govt. works. If they over tax you, you're not getting it back, they are going to find somewhere to spend it.

You didn't.

[HOOKNBULLET2]

Whether the property is owner occupied or rented. The state taxes it and the tax cost is passed along.

In my opinion, the issue is not the property tax system, it is the out of control spending by the school districts.

[Darton]

Originally Posted by 68rustbucket

I spent some time working in the Eufaula area a few years ago. I recall the the sales tax was very high, 10-11%. Please correct me if I’m wrong.

Correct, 10% to your 8.25%. From a total cost of living perspective it is drastically lower than Texas.

[tvc184]

Originally Posted by Slaunch

Texas sucks when it comes to property taxes. I wish Abbott would learn from how the South Dakota governor does it. We are far behind on this front and there is no reason for it.

What has Abbott got to do with it?

[bpa556]

Originally Posted by Slaunch

Texas sucks when it comes to property taxes. I wish Abbott would learn from how the South Dakota governor does it. We are far behind on this front and there is no reason for it.

Umm…governors don’t set tax rates. Of any variety. In any state. The legislatures own that responsibility.


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[RWB]

Crazy mind set. If I understand correctly we have a budget surplus but may not be able to use that surplus for property tax relief due to a cap on spending. How is giving money back spending?


https://www.texastribune.org/2022/11...udget-cap/amp/

[miket]

Originally Posted by RWB

Crazy mind set. If I understand correctly we have a budget surplus but may not be able to use that surplus for property tax relief due to a cap on spending. How is giving money back spending?


https://www.texastribune.org/2022/11...udget-cap/amp/

Seems to me like they feel like it is all THEIR money, they just let us keep some. To us its giving it back, to them its just giving it away.

Same insanity the other way around as gun "buybacks"

[Walker]

Originally Posted by bpa556

Umm…governors don’t set tax rates. Of any variety. In any state. The legislatures own that responsibility.


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But, he can propose and push legislation.

[Johnny Dangerr]

At 65 it gets a lot better...

[Randy]

The quick and dirty

I/R=V
$600,000 potential gross income
-50% vacancy
-55% expenses (hotels/motels average 70-75%)
/7.5% capitalization rate = $1.8M

[RWB]

Originally Posted by Randy

The quick and dirty

I/R=V
$600,000 potential gross income
-50% vacancy
-55% expenses (hotels/motels average 70-75%)
/7.5% capitalization rate = $1.8M

It sits on 9 acres of unrestricted property in the middle of Magnolia. Less than 1/2 a mile from a brand new HEB if that tells you the type of growth in this area. The dirt alone is probably worth close to $1M.