Purpose of Your Appraisal District
Your appraisal district is challenged to determine “market value” of property within the county. “Market value” means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
- Exposed for sale in the open market with a reasonable time for the seller to find a purchaser;
- Both the seller and purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use; and
- Both the seller and purchaser seek to maximize their gains and neither is in a position to take advantage of the other.
Market Value and Taxable Value – What’s the difference?
After market value is establish, the district will determine the assessed value: the reduced value of your property based on limitations provided such as homestead exemptions or production loss for special values like agriculture, and taxable value, the assessed value minus any exemption amounts provided by the specific taxing units. It is the value used to calculate your property taxes for each taxing unit.
The Notice of Appraised Value
When you receive a Notice of Appraised Value from the appraisal district on May 1st, you will see a listing of market value for the previous year and the proposed value for the current year. The notice will reflect any exemptions or special values (production values) you are receiving that combined calculate the Taxable Value.
Appraised Value and the Tax Rate
The information gathered in the field and the rendition form received are used by the appraisal district to estimate the appraised market value of your property as of January 1st. Tax collections begin on October 1st.
The taxing jurisdictions (county, city, school districts, and hospital) adopt a tax rate that will fund their operating budgets. These tax rates are expressed as a dollar amount for every $100 of taxable value and are adopted every year in August public hearings.
How are my taxes calculated?
Your taxes are calculated by dividing your taxable value by one hundred and multiplying by the jurisdiction’s tax rate. For example:
| Market Value | $50,000 |
| Less Exemptions | -$15,000 |
| Taxable Value | $35,000 |
| Apply Tax Rate | $0.50 per $100 |
| Assessed Taxes | $175.00 |
Identifying Property
Each county’s appraisal district determines the value of all taxable property within the county. Before the appraisals begin, the district compiles a list of taxable property. The listing for each property contains a description and the name and the location, or situs, of the propety.
Mass Appraisal
There are basically only two kinds of appraisal, fee appraisal and mass appraisal. Both types of appraisals utilize the same basic appraisal principles and theories. A fee appraisal utilizes the three methods discussed above, but with only one parcel of property being valued. Because the appraisal district is placing a value on a large number of properties annually, the appraisal district must utilize applicable features of each method and apply them uniformly to similar properties in a process known as mass appraisal. Mass appraisal values the entire county, where market areas, neighborhoods, subdivisions, and large groupings of similar properties are appraised at one time by adopted standards.
Sales Approach
In order to determine the value of your property, the appraisal district must first know what properties have sold, and how much they are selling for within Stephens County, in today’s market. By maintaining a database of real estate transactions, we can arrive at the property value by studying sales of comparable properties.
Cost Approach
This method of appraising property is based on how much it would cost today to build an identical structure on the property. If the property is not new, we must also determine how much value the building has lost over time due to depreciation.
Income Approach
This method is preferred when appraising an income producing property. This approach determines value through analysis of income and expenses to determine market value. Consideration is given for operating expenses, maintenance costs, and the return (or profit) that could be reasonably expected on the property.
Real Property
Residential property, commercial property and land, known as real property, in Stephens County are reviewed and analyzed by an appraisal district appraiser every year.
On-site property inspections are performed at least once every three years on real property. During the inspections, the appraiser reviews property characteristics and records any changes from the last review cycle. (For example, if you have added or removed a barn or shed.) The appraiser also looks closely at your improvements (houses or buildings) to see if there is any change in the exterior condition of your property.
Appraisal District appraisers verify the
- Size of your improvements
- Construction quality
- Physical condition of your improvements
If your property has an interior problem that is not visible from the exterior, an appraiser will review the interior of your home, upon your permission.
Using these facts, the appraisal district will determine the market value of your property as of January 1, considering one of three methods of appraisal:
- Sales comparison / market approach
- Cost approach
- Income approach
What about my oil or gas property?
The value of your oil or gas property is based upon the reserves left in the ground rather than the amount of money you received in the last calendar year. If you need more information about the appraisal of this complex property, the appraisal district can provide someone to explain the appraisal method to you.
Business Personal Property
Business personal property is tangible property, not classified as real property, used for the production of income and having a taxable situs in the county. For a business, this would include inventory, furniture, vehicles and equipment that are used in the business. Business personal property is typically submitted by the owner through a rendition, but may also involve an inspection by an appraiser.
Industrial Property
Industrial property refers to properties used to develop, manufacture, or produce goods and products.
Homestead Exemptions
A homestead exemption is generally defined as the home and land used as the owner’s principal residence on January 1 of the tax year. A homestead exemption reduces the appraised value of the home through approved deductions and protects the home owner from increases in value of over 10% in one year. As a result, the homestead exemption lowers property taxes on your primary residence. Applications are submitted to the county appraisal district and due by April 1 of the tax year.
Over 65 Homestead Exemption
Homeowners who are over 65 receive added exemptions and protection from increases in property values on their primary residence.
Texas law requires school districts to offer an additional $10,000 residence homestead exemption. Additionally, local units may elect to also offer exemptions. In Stephens County, the county provides a $12,000 exemption and the City of Breckenridge a $3,000.
Exemptions for Disabled Veterans
The law provides partial exemptions for any property owned by disabled veterans, surviving spouses and surviving children of deceased disabled veterans. The exemption amount is determined according to percentage of service-connected disability and may be up to 100 percent.
Tax Ceiling
The Tax Code also places a ceiling on school taxes for the residence homestead owned by a person 65 or older, who are disabled and surviving spouses (age 55 or older) of individuals who dies while qualified for the tax ceiling.
In addition, Stephens County and the City of Breckenridge also provide the tax ceiling protection stated above.
Exemptions for Non-profit Organizations
Non-profit organizations that meet statutory requirements may seek property tax exemptions and must apply to their county appraisal district by April 1, 2022.
Other Exemptions
Businesses that receive tax abatements granted by taxing units, ship inventory out of Texas that may be eligible for the freeport exemption, store certain goods in transit in warehouses that are moved within 175 days, construct, install or acquire pollution control property, own and operate energy storage systems, convert landfill-generated gas, or store offshore drilling equipment while not in use may also be eligible for statutory exemptions.
How can appraised value change from year to year?
Property tax is “ad valorem,” which means “based upon value.” When the market value of a property changes, so may its appraised value. Your property’s market value can change as a result of the economy in general or because of changes you’ve made to the property, making it more valuable. A sluggish economy, slow growth, and no demand or few potential buyers in the market may cause a decline in property values. Likewise, a growing economy with rapid growth may cause a rapid increase in property values.
What if I disagree with the value placed on my property by the appraisal district?
If you disagree with the value that has been proposed on your property, you should contact the appraisal district within 30 days of receiving a Notice of Appraised Value. If you are not satisfied with the explanation given to you, then you have the right to file a formal protest with the Appraisal Review Board (ARB). The ARB is a panel of local citizens that will listen to evidence presented by both you and the appraisal district. They will then make a determination regarding the issues you have protested.
