*Thanks to TAR and Tierra Grande magazine for the information used in this Blog! 

This time of year, the amount we Texans pay in property tax gets a lot of attention. The last day we can pay 2010 property taxes without a penalty is today. So what more appropriate day to discuss those taxes? We try not to think about it too much during the year as we either make that tax payment every month with our PITI payment or put a little back each month to pay the bill today (you do put some back every month to do that, right?).While it is true that we pay more in property taxes than 45 of the largest 50 cities in the United States (using the largest city in each state, not necessarily the largest 50 overall in the US), that is only part of the equation.

 To truly get a sense of how much we pay in taxes as Texans, we have to look at the TOTAL tax liability…the sales tax, the auto registration and in most states, even the dreaded state income tax. When all those things are taken into consideration, Texas falls way down the list. All the way to #44 in fact. The states that are still below us, by the way, also have little or no state income tax.

Using $100,000 in annual income, we can calculate what the state income tax, auto registration/tax, sales tax etc. would be for that amount and when we do, we see that our total tax liability is approximately 5.4% or $5,357. Compare that with the highest, Connecticut, who has a 16.9% tax burden or $16,943. The lowest, Alaska, comes in at 3.6% or $3,610.

My assumption here, is that we are using full taxation on these numbers. We all know there are ways to reduce those taxes on most of our property. We can homestead it if we live in it and that can reduce that property tax somewhat depending on the taxing authority and whether or not they honor that. We also have other exemptions that some of us can qualify for that will reduce the assessment, and therfore, the tax (age, disability, etc). Make sure you know when those forms need to be sent in to the appraisal district (if your county has one), or the appropriate taxing authority (if your county doesn’t) to claim those exemptions. You can also protest your taxes and drop the assessment if you are successful in that protest. That will reduce the assessment as well. One word of warning about the tax protest…whatever you tell the appraisal district becomes a matter of public record. If you are using the condition of your home as the basis of your protest, whatever you are telling them is on the record. It needs to be truthful and, depending on what it is, it may end up being a disclosable item on your seller disclosure if and when you go to sell that home.

Realtors get very busy ths time of year with assisting folks with signing up for those exemptions and a little bit later, determining the value of their home to see if a protest is warranted. If you find you are in that position and are anywhere near me, I’d be happy to assist you with that too. Several ways to reach me: email- donleonard@comcast.net, direct line- 713-899-3938. And if you like listening and/or participating in real estate talk shows, catch me every Sunday afternoon form 1-3 on AM700, KSEV’s Open House Radio Show with Don Leonard and you can listen on your computer too at www.ksevradio.com.