From 2021-22, the average market value of properties increased 29.8% and 21%, respectively, in Montgomery and Harris counties, according to data from the county appraisal districts. In comparison, the average market value for properties rose no more than 11.2% year over year in Montgomery County and 15.4% within Harris County in the years prior since 2010.
As local taxing entities begin budget discussions for the upcoming fiscal year, Tammy McRae, Montgomery County’s chief tax assessor-collector, said at an April 21 tax workshop she believes lower tax rates are needed to compensate for this increase.
“When values go high, tax rates need to go down,” McRae said.
Montgomery County Chief Appraiser Tony Belinoski said all property is appraised at its full market value as of Jan. 1. Notices are sent to homeowners in the spring with a market value and appraised value. The market value is what the home is worth, whereas the appraised value is the taxable value before property tax exemptions.In years prior, the market and appraised values have been similar, Belinoski said. However, many homeowners may notice a discrepancy this year between values due to the state’s 10% cap on appraised value increases while home values surge.
Monique Sharp, president and general manager of The Woodlands Township, said the township offers an additional $25,000 exemption to residents age 65 and over or who are disabled, but it may look at changes to that in its summer budget sessions.
“The board plans to discuss and analyze potential increases to the 65 and older and disabled exemption as well as a homestead exemption,” she said.
Appraised values rise
The increase in appraised values is a result of several factors, official said. Belinoski said there is a large demand for homes in Texas but a low inventory of homes to purchase.
The appraisers consider market transactions from home sales, and since so many homes have been sold above the asking price, this drives the market value up, according to Dick Lavine, senior fiscal analyst with Every Texan, an Austin-based public policy center.
According to a May 3 news release from the Houston Association of Realtors, the median price of a single-family home in the Greater Houston area has increased nearly $80,000 in the last two years.
Homeowners can protest appraised values if they feel they are inaccurate and receive an informal hearing with the county’s appraisal review board, which may decide to lower the appraised value. The protest deadline for property owners was May 15.
Nancy Becker, a Creekside Park resident who lives within TISD’s boundaries in Harris County, said her home’s valuation increased 30%, and while she employs a company to protest the taxes every year, the increase has become a topic of discussion among the community.
“From what I’m hearing, people are planning to protest,” Becker said. “If you look at what houses are being priced at now, it’s off the charts.”
Despite no guarantee of getting appraised values reduced, Belinoski said in an email he encourages property owners to protest, especially if they believe the market value is inaccurate and can provide information to warrant an adjustment. County data shows the number of protests filed increased about 55% in Montgomery County and 114% in Harris County from 2015-21.
“Most of the time [the ARB and homeowners] come to an agreement,” Belinoski said.
Unsustainable increase
The year-over-year percent increase in average market value was in the single digits for all six years in Montgomery County, according to data from the appraisal districts. Belinoski said he was “shocked” by 2022 appraisal values.
Locally, the average market value for properties within Conroe ISD boundaries rose 27.4% from 2021-22—following a 9.2% increase overall from 2017-21. It rose 24.8% from 2021-22 within Tomball ISD’s boundaries and 33.3% within Magnolia ISD, according to data from the appraisal districts.
Property values are increasing faster than the median incomes across Harris and Montgomery counties, leaving people worried their taxes will increase so much they will be forced out of their homes, state Rep. Cecil Bell, R-Magnolia, said in an interview.
CISD’s median household income increased 22.57% from 2013-20, according to the American Community Survey five-year estimates, but the average market value in CISD increased 38.46% during that time. TISD and MISD show the same trend.
As such, some homeowners said they are worried about how high their taxes will be this fall.
In the Village of Grogans Mill, homeowner Sara Bissig said she owns three houses on one street that each saw its appraisal increase by the same amount regardless of the condition of the houses.
“It’s just a bulk assessment they’re doing on the houses; the houses that are very new and updated, I can see where they need to, but my houses are not, so it seems unfair,” Bissig said.
She said she does not anticipate protesting the increases and may need to consider increasing rental prices she charges in the future if taxes rise considerably.
Bruce Cunningham, the president of Grogans Mill Village Association, said his appraisal increased by $80,000. He said he believes better communication is needed from the appraisal districts.
“I think the appraisal district could’ve done a much better job in communicating what was happening than they did. I think when an appraised value goes up more than 10%, they should have a note explaining why,” Cunningham said.
Adam Perdue, a research economist at the Texas Real Estate Research Center, said the center is expecting the housing market to slow over the next year and prices to decrease. In the Houston area between 2020-21, there was a 21% increase in home prices when typically there is a 5% increase over a two-year span, according to Perdue.
Although property values rose, taxing entities are limited to how much they can raise their property tax revenue. Counties and cities are limited to a 3.5% increase and schools to 2.5%, Perdue said.
“[Taxing jurisdictions] don’t necessarily need more revenue because the valuation increased,” Perdue said.
Seeking relief
Homeowners may see relief from homestead exemptions and two statewide propositions approved by voters May 7.Lavine said Proposition 1 amended the exemption for those who are disabled or over age 65, allowing school taxes to decrease for these homeowners instead of being frozen at age 65. Proposition 2 increased the homestead exemption for school taxes from $25,000 to $40,000 off of the appraised value.
Local legislators have pitched solutions to provide further taxpayer relief.State Rep. Steve Toth, R-Woodlands, said he is advocating for doing away with appraisal districts and using a price-paid valuation, which he said 40% of states use in property tax calculations. Homeowners’ taxes would be based on the purchase price of the home.
Toth said he expects a hearing on the matter in the 2023 session, which will begin Jan. 10.
In addition, Bell said he believes the chief appraiser of each county should be an elected position.
“When you have that much authority, you should be responsible and accountable to the people,” Bell said.
Jishnu Nair contributed to this report.
