Can you please explain how Property Taxes are determined in Katy TX?
I get this question numerous times during any given year and Texas is probably different in how the taxes are calculated and probably more confusing than most other places. I just had this question come up with a potential Canadian client who was totally confused and rightfully so. One huge geographical area in the mailing address part of unincorporated Katy is Cinco Ranch. There is no such thing as a tax rate in Cinco ranch. Cinco Ranch is made up of at least 35 different neighborhoods and each has its own “Tax Rate”.
Let me try to explain in words how these taxes are determined. If you get lost or have more questions read this completely and then call me.
The salient points of tax calculation are as follows:
A) The basis to start with is the values establish by a Central Appraisal District or CAD. Most of the times when you purchase a home the CAD value for that home ill end up as the appraised value. The next year the CAD will reappraise your home and supposedly use comparable sales in our neighborhood. The CAD value is the value used for taxes and nothing else. I tell folks all the time you want a low CAD value and a high appraised value by your financial institution.
B) The basic tax rates cover County Taxes, MUD Taxes (I will write a separate blog about MUD) and school district taxes. These rates are before exemptions one receives for Homestead, being a Senior citizen, or being disabled. The owner of the home on January 1 of any given year can obtain a Homestead exemption. If you buy the home during say 2012 then you cannot apply or receive a Homestead of any kind during 2012 but can apply for Homestead during 2013. All exemptions require an application.
Each of taxing entities will determine how much they will apply as an exemption by reducing the CAD value of your home. As a general rule MUD taxes normally do not have exemptions of any kind.
C) The tax rates are as I said above for school taxes (in Katy it is Katy ISD), MUD taxes, drainage districts, flood control, emergency services. Add up all their amounts which are stated in $ per $100 of value to get the tax rate.
D) The calculation goes like this: CAD value of the home $150,000; Tax rate is 3.3 % ; Homestead ( next year) is about on average 10% reduction. Taxes are estimated at ( 150,000 /@100 X 3.3 = $4,950 minus the homestead of $495 ( 10 %) and the net will be $4,455.
I completely agree this is a confusing system. Please do not hesitate to call me so we can discuss if you are unsure of what I just covered.