Officials: Increasing home prices could mean lower tax rates

Most homeowners in Georgetown found their property value increased in 2013, according to data released by the Williamson Central Appraisal District.

Low home inventory and high demand caused Williamson County residential market values to rise an average of 10.6 percent during the past year, WCAD Chief Appraiser Alvin Lankford said.

Preliminary numbers from WCAD show the average market value for a home in the city of Georgetown increased from $203,779 in 2013 to $227,025 in 2014, or about an 11.4 percent increase. In Williamson County the average market value for a home rose from $194,072 in 2013 to $214,682 in 2014.

The market value is the price at which a home would sell under prevailing market conditions.

Lankford said the increase in values is the largest he has seen since the recession.

Property owners in Williamson County had until June 2or up to 30 days after they received their appraisal notice, which ever is laterto protest the WCADs findings. Lankford said values are expected to be certified by July 25.

Officials stances

Once values are certified, taxing entities such as the city of Georgetown and Williamson County can begin establishing specific property tax rates for the upcoming year.

Property tax rates are adjusted annually based on the amount of money needed to fund the next fiscal years budget. When property values increase, the property tax rate can be lowered to offset the rising home values.

Micki Rundell, city of Georgetown chief financial officer, said although it is still too soon in the process to estimate the citys effective tax ratethe rate needed to raise the same amount of tax revenue as in the preceding yearshe said she does expect the new rate to be lower than last years.

We anticipate that [the fiscal year 2015 tax rate] wont go any higher, she said. Hopefully it will be a tax rate decrease.

Georgetown City Council is expected to have a special workshop July 14 on the citys proposed fiscal year 201415 budget and have a special meeting July 29 to set the maximum tax ratethe highest rate City Council could eventually adopt, Rundell said.

Williamson County officials said they began the budgeting process using the current tax rate to formulate revenue and begin considering expenditures.

On average [the county] sees 35 percent [property value] growth each year, County Budget Officer Ashlie Koenig said. This year we are seeing growth well beyond that. We certainly did not know we were going to see growth in the double digits.

Williamson County Auditor David Flores said he believes the countys new property tax rate could be lower, but said it was still too early to comment on precise numbers.

Williamson County commissioners will determine the property tax rate at a future meeting.

The [county] commissioners are sensitive to keeping the tax rate stabilized, and that does not include increasing the current rate, he said.

Cause for value increases

The number of Austin-area homes sold in 2013 increased 19 percent compared with 2012, and the median selling price for single-family homes increased 19 percent, according to the Austin Board of Realtors. The total value of single-family homes sold in the area rose 28 percent in 2013 compared with 2012 to more than $7.9 billion, according to ABoR data.

In a balanced market theres typically six months of [housing] inventory. We are at two months of inventory, which makes it a sellers market, Lankford said. So with a high demand of people coming in wanting to buy homes and a very low inventory of homes, you are seeing large increases in value associated with that. [The WCADs values are a direct reflection of what happens in the marketplace.

Rundell and Flores said along with increasing values of existing properties, new improvements and construction helped the city and countys overall property value increase.

The city of Georgetown had 592 new residential construction projects in 2013compared with 426 in 2012 and 383 in 2011which totaled more than $110 million in new property value. The city also annexed more than $13 million in new values in 2013.

Regulation and protests

The WCAD uses a mass-appraisal system that adjusts neighborhood values based on sales, depreciation, land value and other factors to calculate two valuesmarket and taxablefor each property in its jurisdiction. The taxable value is the total market value minus any exemptions, such as those offered for homeowners or property owners age 65 or older.

In Georgetown, Rundell said the age 65 or older exemption is consistently a factor when setting the citys property tax rate and determining the budget. Of the citys approximately $5.2 billion in taxable values, about $1.6 billion is capped by the exemption, she said.

For properties with a homestead exemption, or those that are filed as the owners primary residence, the taxable value generally cannot increase more than 10 percent each year, Lankford said.

The WCAD received more than 21,000 protests this year, more than all protests received between 2009 and 2013, which averaged between 15,000 and 17,000 a year, Lankford said.

Protesters can be scheduled for an informal and a formal hearing to explain why their property values should be readjusted, he said.

During the informal hearing, WCAD appraisers meet with property owners and take a specific look at the property and compare it to properties of similar size, quality and age to the property in question, he said.

If that number is in fact higher than what we sent out on the notice, there is no adjustment to be made to the property, Lankford said. If it comes out that it should be lower, we will offer to lower that property [value]. You are not going to be punished; its just a matter of giving you information of how we did the appraisal and what the sales are out there in your particular neighborhood and how they compare against your particular property.

As of June 30 more than 9,700 property values were still under protest in Williamson County, according to CAD information. Of those, more than 1,200 were in the city of Georgetown.