Most Shelby County Property Owners

Will See Increased Valuations for 2022

 

Shelby County is experiencing increased growth regarding real estate values. The Comptroller’s office through its Property Tax Division recently conducted their Property Value Study which takes a random sample of properties within a school district and then through reported sales and their field appraisals, they determine whether the Appraisal District is valuing properties at 100% market value according to state law.

 

The 2021 Property Value Study (PVS) determined that the Shelby County Appraisal District (Shelby CAD) was not valuing properties at 100% market value. The PVS determined that 5 out of 6 schools were outside the realm of acceptability. The appraisal districts were created to ensure equitable value for school districts statewide.  So when the state determines the local appraisal district is undervaluing properties, it affects the amount of state funding the local school districts receive.

 

Shelby CAD receives returned mail on less than 2% of the optional sales letters that are mailed out to both the buyers and sellers of all deeded real estate transactions. Shelby CAD previously received multiple listing sales information from our local board of realtors but was cut off from receiving sales information in 2015 by the local board. The state comptroller still receives sales information that they use in their property value study, but the CAD only has access to the sales information after the school districts fail the Property Value Study.

 

The state property value study is conducted every two years unless a school district fails the study and then PVS is performed each year until the school district passes. Shelby CAD passed the 2019 study for 5 out of 6 school districts but within 2 years it was determined that our valuations were too low and 5 out of 6 were outside of what the state considers its’ confidence interval.

 

What this means to Shelby County property owners for the year 2022 is that most residential owners and some commercial property owners will see an increase in their valuations.

 

There will be a proposed proposition on May 7th to increase the state mandated exemption for homesteads with respect to school districts from $25,000 to $40,000 which will undoubtedly pass.  There is also a 10% homestead cap that will limit the 2022 taxable value increase for those receiving homestead exemptions.

 

There has always been a longstanding adage concerning property appraisals. We all want our property to be appraised at the highest possible value for a bank loan and the lowest possible value for tax appraisals. At this point in time the state is telling us there is too big a difference in those appraisals.

 

For more information, click here to read the press release from the Texas Association of Appraisal Districts

 

   

March 17, 2022  

FOR IMMEDIATE RELEASE  

Texas Association of Appraisal Districts Issues Guidance  

AUSTIN – Today the Texas Association of Appraisal Districts announced historic growth in Texas real  estate values.  

According to the association, regions around the state have seen increases in values between 10-50%  since last year. Alvin Lankford, president of the association and chief appraiser of Williamson County  said, “The Texas real estate market is growing as fast as we have ever seen it in the state’s history. We  have all seen the countless stories about people moving to Texas from other states. This increase in  population contributes to a shortage of homes available and to the increase in prices paid for homes.”  

Lankford added, “As a reminder, according to state law, appraisal districts are to appraise property at its  market value. In fact, we are regulated by the State of Texas to make sure we do our jobs fairly and  accurately. But, keep in mind, we are not responsible for setting the tax rate. We follow the law, state  regulations, and the reality of real estate market sales when making our value determinations.”  

In a state without a personal income tax, cities, counties, hospitals, school districts and community  colleges all rely heavily on property taxes. These same political subdivisions set the tax rates that  determine the amount of taxes paid by homeowners and businesses. An increase in property taxes is  sometimes needed to keep the police and fire departments adequately funded, along with our schools,  hospitals, and other vital services for our communities. The State of Texas also benefits from property  taxes to the tune of over $5.6 billion in a two-year budget cycle. That’s 75% more than the state makes  from the lottery. Also, in the most recent budget passed by the legislature, the state assumed that property  tax revenue collected (not appraised amounts) would increase by 6% over a two-year period.  

Lankford concluded with, “Considering for many of us our home is our largest investment, an increase in  market value can be considered a blessing. However, many people equate an increase in market value to  mean an equal increase in property taxes which is not always the case. The increase in what a person  owes in property taxes is unlikely to be proportional to the increase in home values. First, there is a cap  of 10% on the amount the assessed value can go up for properties with a homestead exemption. Second,  homeowners over the age of 65 and disabled veterans have additional protections. Lastly, caps limit how  much additional revenue from property taxes a taxing unit can collect without going to the voters for  approval will limit the increase in taxes. It has never been more important to have a homestead or other  exemptions and the resulting 10% cap in assessed value than it is today.” 

-more 

TAAD-page 2  

Texas A&M Real Estate Research Center information on Texas housing market as well as major  metropolitan areas:  

? Amarillo MSA up 13.78% year over year  

? Austin-Round Rock MSA up 35.35% YoY  

? Dallas-Fort Worth-Arlington MSA up 23.55% YoY  

? El Paso MSA up 14.40% YoY  

? Houston-The Woodlands-Sugarland MSA up 15.19% YoY  

? San Antonio-New Braunfels MSA up 18.37% YoY  

? Sherman-Denison MSA up 24.53% YoY  

https://www.recenter.tamu.edu/data/housing-activity/#!/activity/State/Texas https://www.recenter.tamu.edu/data/housing-activity/#!/activity/MSA/Austin-Round_Rock 

https://www.recenter.tamu.edu/data/housing-activity/#!/activity/MSA/Dallas-Fort_Worth-Arlington 

https://www.recenter.tamu.edu/data/housing-activity/#!/activity/MSA/Houston-The_Woodlands Sugar_Land 

https://www.recenter.tamu.edu/data/housing-activity/#!/activity/MSA/San_Antonio-New_Braunfels ##30##