xhv8mzw7ge79waga35o97s2wbzpfr6 [NEWS] Property Tax Drop in Houston??

[NEWS] Property Tax Drop in Houston?


Good news for investors and homeowners in Texas. Recently, lawmakers passed on a reform to slow the growth of property tax increases by limiting it to a certain amount (it's called the Texas Property Tax Reform and Transparency Act). Texas doesn't have a reputation for low property taxes... so this brings a sigh of relief.


"As you’ve probably heard, Dallas and Houston economies are booming, along with population growth. Jobs abound, salaries are increasing, home prices are low and rents are high. So Texas has been a very attractive place for real estate investors — except for those high property taxes that can eat into cash flow.  So, this tax legislation could make a big difference for those who already own property in the Lone Star state, and for those who are thinking about it." - Real Wealth Network


What is the Texas Property Tax Reform and Transparency Act?


Currently, local governments have the capability to raise property taxes up to 8% annually without protest. The exception to this rule is in Houston where city limits these hikes to 4% per year.


The new reform is going to limit Texas to a 3.5% increase each year, with Houston being capped at 2.5% annually. Fantastic! What if they want to raise them above those caps? In order to do so, the proposal needs to be decided by voters in a major election as part of the November election ballots.


Texas has the 3rd Highest Property Tax Rate in the Nation


^This is according to Memphis Invest. The blog says that "525 Texas cities increased their property tax rates by more than 3.5% in 2017. Now the cap is lower and anything over that is automatically put on the ballot."


New Appraisal Standards


Apparently there's been some transparency issues between appraisals and tax rates. In an effort to clear up confusion a new process has been put together: 1. Valuing the property; 2. Protesting the values; 3. Adopting the tax rates; 4. Collecting the taxes. Now two notices will be sent separately to property owners. First to deliver the appraised value and second to notify of the tax rate. Among a few other minor changes, all members of the appraisal review board will be undergoing more rigorous training.


When does the Tax Rules Take Effect?


January 1st of 2020.


Is Texas a Good Place to Invest?


We've written about Houston plenty in the past. Everything from "Hurricane Harvey to the 3rd Largest Metro Job Growth in U.S." to a "Texas Employment Outlook in 2019"


But here's the good stuff... "Top 10 Stats For Houston"


  1. Population: 2,312,717 – 4ᵗʰ largest U.S. city (Wikipedia – 2017 estimate)

  2. 5-year projected population growth: 1.7% (PwC, 2018 – U.S. average is 0.7%)

  3. Median household income: $47,793 (City Data, 2016 – U.S. median was $57,617)

  4. 5-year projected employment growth: 1.6% (PwC, 2018 – U.S. average is 0.6%)

  5. Cost of living index: 94 (City Data, 2016 – U.S. average is 100)

  6. Rent-to-household-income ratio: 20.2% (PwC, 2018 – less than 30% is ideal)

  7. Median 1-bedroom rent: $838 (Rentonomics, 2018 – U.S. median is $743)

  8. Year-over-year rent growth: 1.8% (Rentonomics, 2018 – U.S. average is 1.5%)

  9. Median single-family home sale price: $240,200 (NAR, Q3 2018 – U.S. median is $266,900)

  10. Year-over-year home sale price growth: 2.7% (NAR, Q3 2018 – U.S. median is 4.8%)

Bonus: RealPage: Annual Rent Growth Leaders (#11)

Bonus: PwC/ULI: Markets to Watch in 2019

295 W Center St, Suite A

Provo, UT 84601

(801) 758-8970

(Brokered by RE/MAX Equity & partners)

CONTACT US

FIG DISCLAIMER: No investments are guaranteed to result in profits. Net operating income, cap rates, and internal rates of return are subject to fluctuation and may experience a wide range of change, including the potential for operating losses. Factors affecting investment returns include, without limitation, changes in interest rates, tenant vacancies and defaults, property management expenses, repair and maintenance costs, HOA expenses, litigation, insurance rates, and relative strength and weakness in the local and regional economy. Past performance is not a guarantee of future returns. FIG does not provide tax or legal advice, and none of the statements or information on our website or sales materials should be construed as tax or legal advice. All investors are encouraged to seek advice from their own tax and legal professionals. All estimated returns on investments in FIG projects are subject to change and may be significantly different from actual financial performance. FIG is a brand used for the purposes of marketing. FIG is not an actual company but is used to brand the investment strategy used by those marketed on this website. © 2020 FIG & RE/MAX Equity