McLennan County, TX (FOX 44) — Texas Lieutenant Governor Dan Patrick and Texas House Speaker Dade Phelan announced a major deal for property tax relief Monday morning.
It’s a tax cut legislation worth $18 billion after months of disagreements on how to do it.
With this legislation, FOX 44 checked in with the McLennan Central Appraisal District to see how much home values have increased in Waco
In 2021, home values increased by 30 percent, however, it slowed down to a 10 percent increase last year.
McLennan Central District Chief Appraiser Joe Bobbitt says this deal will alleviate homeowners because they’ve noticed more commercial companies buy rental properties in McLennan County driving up home values.
“They used to be single family residences owned by the person who lived there, and then it just turned into a rental property,” said Bobbitt. “You have institutional buyers coming in to the market that are buying things.”
Bobbitt says a home’s value is based on how much it would cost to replace the building.
“As an appraisal district, we are required to be at 100% of market value by state law so we get audited by the state. If we’re off by more than five percent at a school district level, then we have two years to fix it, otherwise, the school gets punished and the school loses funding,” said Bobbitt.
Bobbitt says a home’s value depreciates as it ages.
In the same breath, Greater Waco Realty agent Madison Ugochukwu says the demand for current homes is still high.
“We work with people from California, Washington, Oregon, all those states all the time, so those people are definitely coming to this area,” said Ugochukwu.
However, there is still not enough inventory.
“There’s still competition for homes out here, which is just causes the values to go up,” said Ugochukwu.
To cut costs, Ugochukwu says you can protest your taxes with the help of your realtor to prove your home is less that what the county is valuing it for.
Less is what Ugochukwu says we need to see.
“We want the lower property values, the lower property taxes, everything, because that’s going to, at the end of the day, help everyone out,” said Ugochukwu.
Overall benefits include increased homestead exemptions and state funding to reduce school property tax rates.
Renters and commercial property owners would have to pay more on taxes, but Bobbitt explains how the property tax deal would limit it at a 20 percent increase.
“There were no limitations or benefits or protection for businesses or renters,” said Bobbitt.
The full house and senate still have to vote on the legislation and then it would go to Governor Abbott.
Final approval will come down to voters in November.