Property Taxes: Who Really Pays More?




They say that there are two things certain in life—death and taxes.Texas residents are not immune to either, but for many private property owners in the state, property taxes equates to little more than a slow and painful death.

Democrats offer few solutions and Republicans have largely failed on their promises. Counties in Texas complain that they don’t make enough to pay the bills because of unfunded mandates from the Lege, but in the end, who is really left holding the bag? In Texas, it is the private property owners.

The truth is that if you own a home in Texas, you pay one of the highest property tax rates in the United States.


A piece of property that is appraised at $220,000 in Brazoria County will over $4,300 per year to live in. That same home in Burnet County will cost roughly $3,000 per year to live in. The national average for a $220,000 home is around $2,600. The numbers vary not only widely, but drastically.


“All I hear from the Texas Association of Counties is unfunded mandates. Well, that excuse has done sailed away” says San Antonio area property owner Christopher Taylor. “You can’t tell me that lie anymore.”

Property tax reform has been a pivotal issue in the Texas Lege, especially in the 85th, but a lack of progress due largely to political wrangling on both sides over social issues still leaves Texas property owners holding the bag.


Texas is one of only a handful of states that do not have a state income tax. Many argue that by not having that method of revenue generation leaves the State relying largely upon property taxes to fund programs such public education and local governments.

Governments cannot obviously operate without sufficient money in the bank and are forced to collect it from every corner they possibly can. In Texas, cities, counties and even school districts rely massively on real estate taxes.

Texas governments have no other sufficient method of taxation in place. Due to that fact, property taxes must be enough to support local governments and that fact draws deep concern from many.



In January, Governor Greg Abbott outlined a plan to counter balance concern over property taxes. His plan, which includes a cap of no more than 2.5 percent growth in the property tax rate is logical, but largely unpopular by many voters.

“Let me explain this to you” Gil Markham, a Dallas area economist says. “If you own a high rise office in Downtown Dallas here, you will in essence pay less in property taxes IF you use the Rick Perry system to your advantage.”

Markham says that small to medium sized businesses are often in the same boat as private property owners and end up paying more than their fair share. According to him, it is big business that is getting the breaks in the taxation department.

“The state constitution says that if you own a home then your property is subject to be taxed at market values” Markham says. But if you own a large commercial property, those metrics change, thanks to a loophole in the system dating back to 1997 when Republicans has control of the Senate for the first time since reconstruction.

“If you own a refinery or a large business property, whatever that is defined in the tax appraisers mind, then your property is valued at whatever they want it to be valued at, effectively allowing you to pay less in property taxes” Markham says.

Markham goes on to explain how this happened.

“What happened is the Texas Lege passed an Equal and Uniform law in 1997, in which the property owners can fight against the appraisal district if they can show that the comparable property of them is appraised at lower values than their own” says Markham. “This sounds logical as a concept, but this has left an unintended loophole to the owners with large, industrial and commercial properties. The way that this works is, if you own a complex asset like a huge warehouse, skyscraper or refinery, and you hire yourself some very skilled tax lawyers, you get out of paying the fair amount of taxes to the government of Texas.”

But the story on property taxes doesn’t stop there. Many Texans are fighting for, and losing homestead exemptions at an alarming rate.

“I lost mine for no good reason” says Dale Jennings who owns property near the Harris/Waller County line. “They gave me some story that my property showed no visible signs of habitation.”

Mike Pettit, who owns property along Frio River near Leakey says something similar happened to him.

“I was told this year that I was no longer qualified for a homestead exemption because I built a shed for my welding shop” he claims. “So if you sell jams on your front porch it then becomes a business?”


Houston based economist Lance Seguerra says that the issue goes much deeper.

“Let’s say you have a homestead exemption on your property. If 50% of the property owners in your county claim the same thing, that is a lot of money the local government is out” Seguerra says.

“Texas has very little prime real estate left that has not been bought up by developers, mainly in places like suburban Houston and Austin. The county governments need to make as much money as they can off of each acre that they have and one way doing that is by cheating you out of your homestead exemption” he claims.

The stories about property taxes and Texas residents being shafted are as many as the number of ways to get from Borger to Beaumont. But one thing is for sure, when the Senate Select Committee on Property Tax Reform better have a solid solution and not just more empty promises or Texans are likely to take notice at the ballot box—or likely not, depending on how much of the spotlight social issues are given on the legislative stage.