Waco homeowners have seen their property taxes rise dramatically over the last few years. There are several factors that influence property taxes including home appraisals and district zoning. As the city of Waco is changing and growing, how do residents keep up as property taxes continue to rise?
"If you are already struggling, there is not a lot of hope," Bobbitt said.
Joe Bobbitt is the assistant chief appraiser for McLennan County. Bobbitt recently held a public meeting at the Cen-Tex Hispanic Chamber of Commerce to explain why property values and property taxes are increasing.
"Things are selling a lot quicker than they used to," Bobbitt said. "When there is more competition, then the values will be driven up. All we try to do is reflect what the market is doing."
According to the Texas A&M Real Estate Center, in 2011, the average price of a home was about $140,000 dollars but today, the average is around $200,000 dollars.
"Values are going up because people are paying more for the properties than they have in the past," Bobbitt said. "A lot of values are going up because there is a lot of increase in tourism here lately. We get people calling us, asking us from California, wanting to retire here and move here – move to Waco. There just seems to be a lot interest that wasn’t here five years ago."
According to Realtor.com, in 2016, Waco zip codes were one of the most searched for in the United States. Appraisers like Bobbitt determine the value of property. He said there are both positives and negatives to property values rising.
"Overall, the economy is, theoretically, improving; the housing market is definitely, pretty strong," Bobbitt said. "If you ever sell your house, you will be better off for it, but if you plan on staying in your house for the next 10 to 20 years, you may not see that benefit or it may be such a long-time period—all you do is just get the tax bill."
Bobbit said one of the main drivers for appraising property values is school funding.
"Schools make up the greatest portion of your taxes, usually about half," Bobbitt said. "But the schools are bound by the state — they are basically stuck at their tax rate and they don’t have a lot of leeway as far as changing it. If they come off their tax rate, then they end up losing state funding. If we are off, schools lose funding and local tax payers have to make up that share the state should have been paying.”
Properties were appraised January 1, 2019 and a notice of the appraisal is sent out to residents in April. Homeowners can file a protest if they don’t believe they can sell their home for the value it was appraised. Protests must be filed before May 15 and will be resolved in July. Residents will then receive their tax bill in October.
"We are also not allowed to take into account personal hardships or financial hardships that people may have," Bobbitt said. "The only things we are allowed to do is, if you own the home and you live in the home as your primary residence, you can have a homestead. If you are a disabled person, according to social security, then you can get an exemption from that. If you are over 65, you can get an exemption and disabled veterans get exemptions. As far as just hitting hard times, there is no tax exemption or tax break."
A year after the property was first appraised, the taxes are due. If the property taxes remain unpaid by February 1, 2020, the tax office will put a lean on the property. About a year later, steps toward foreclosure will begin.
Andrew Lopez is a Waco homeowner and member of the Downtown Homeowners Association. Lopez said city zoning is to blame for rising property taxes.
"The real issue has nothing to do with the taxing authority, our appraisal district," Lopez said. "It really has to do with the push of the planning commission by rezoning areas such as residential homes into commercial type zoning."
However, planning services director Clint Peters says city zoning has nothing to do with how appraisals are done. Lopez said rezoned residential districts particularly in Downtown Waco has affected livability and home values. Lopez was a member of the city planning commission for three and a half years.
"These people who live in these neighborhoods, now, they can’t say anything because they are zoned mixed use, they’re not zoned residential," Lopez said. "Its unfair, but it is a good way to push people out of a neighborhood when my taxes dollars for a home go from $800-$900 dollars to now close to $2,500 dollars a year."
Bobbitt said it is possible for property taxes to go up if a residential zone is rezoned as commercial, but it also may not. It depends solely on how the property is being used. However, Lopez sees a direct correlation between zoning and rising property taxes.
"It’s gentrification with a definition to it now," Lopez said.
Bobbitt hopes Waco homeowners realize what their options are if they disagree with their home appraisal.
"It really comes down to what they think the house can sell for because some people come down and they don’t have a problem with the value," Bobbit said. "They think the value is fine and reasonable, but they don’t like the taxes. At that point, our office, there is not much we can do. We set the value multiplied by the tax rate is the total amount of tax.
For more information on how property taxes and home appraisals, you can visit the McLennan County Appraisal District website at www.mclennancad.org/.
