2022 Residential Market Values and Tax Bill Analysis
2022 Valuation Results
The
2021 year was record-breaking for Williamson County property value appreciation
due to various national and local factors driving an unprecedented real estate market,
and the resulting 2022 appraisal valuations were thoroughly detailed in the Williamson County Market Analysis. As
outlined, 2021 sales transactions were used to set January 1,
2022, appraised market values which were mailed to property owners in April. Regardless of appraisal year, initial property
owner sentiment to increased appraisal values is an
anticipated similar increase in associated tax bills mailed later in
the year by the Williamson County Tax Assessor/Collector. While the first opinion that an increase
in property value will lead to a similar percent increase in a tax bill is
understandable, it is often an incorrect assumption and misinterpretation of
tax laws and requirements. Most often,
the percent change in a property tax bill from one year to the next is far
lower than the property appraisal value percent change from the prior
year. The chart below illustrates a
stark comparison of the two values for 2022.
Property Tax Savings - Homestead Exemptions
A few factors contribute to how property value appraisals
and the resulting bills change by different percentages and explain why many
residential properties had record-breaking value increases for 2022, yet the
associated tax bills decreased from the prior year.
The Homestead Exemption is the primary way a
property owner can save money on a tax bill for the principal residence in
which he or she resides, and the savings takes place in two ways. First, depending on the taxing jurisdictions
where the property is located, a homestead exemption removes part of a home’s
value from taxation. In this instance, the assessed
value of a residential property is reduced by a jurisdiction’s exemption amount
prior to the application of the tax rate used to calculate that portion of the
bill. Please use this LINK to
find information regarding Williamson County 2022 exemptions and tax rates by jurisdictions. The chart below provides an example of the difference in taxes for
a property with an assessed value of $465,421 depending on whether there was a
homestead exemption in place. Savings
will vary by property based on the different tax rates by jurisdiction,
however, in this instance tax savings for having the homestead exemption are
just over $500.
Property Tax Savings - Homestead Caps
The second way a homestead exemption provides
tax savings is by capping yearly assessed value increases at 10%. This feature of the homestead exemption is
designed to buffer tax increases and protect property owners in times when
rapid market value appreciation takes place. For example, if a home
that had a market and assessed value of $300,000 in 2021 increased to a market
value of $400,000 for 2022, the assessed value for 2022 would be capped at
$330,000. An exception to the 10% cap
amount is any new improvement value that is added to the property is also added
to the cap amount in that year. So, in
the prior example, if a pool was added to the property in 2021, the 2022 assessed
value would be capped at $330,000 plus the additional new value of the
pool. Further detail, explanations of
market and assessed values, and examples of the homestead cap benefit can be
located HERE.
Data below regarding the group of properties
detailed in the first chart in this article illustrates that over 90% of the
properties with homestead exemptions had the assessed value cap at the 10%
maximum for 2022. With the median market
value change hitting 49%, it was beneficial for many residential properties to
have the homestead exemption that limited the assessed increase to 10%. The unprecedented real estate increase in
2021 which set the 2022 market values is also evident by the substantial indicated
median and average cap amounts in the chart as well. In this dataset, the median and average amount
of value between the capped assessed values and the appraised market values of
107,167 properties is over $150,000.
Property Tax Savings - Tax Rates
A
final factor in the reason many appraised values increased dramatically for
2022 yet the resulting tax bills decreased is due to requirements beyond the authority
of the appraisal district. Yearly
certified market and assessed property values from the appraisal district are
used in the resulting tax bill calculations, however the often-overlooked
portion of the equation is the tax rates.
They are set each year by the local taxing jurisdictions and applied to
the appraisal district’s values to establish the property tax bills. Due to the yearly
changes in the local real estate market, and addition in value to the appraisal
roll, the tax rates fluctuate from year to year and sometimes decrease in times
when the market values increase. The
market value percent increases presented initially in this article
were significant compared to prior years and caused reductions to a majority of rates which were evident by many reduced tax bills.
The link to the 2022 tax rate information provided earlier illustrates just over 100 taxing jurisdictions within Williamson County. After the 29 that make up the well-known
county, cities, and school districts, the rest of the list are Municipal
Utility Districts (MUD), Emergency Service Districts (ESD), and Special
Districts. The following charts illustrate the 2021 and 2022 rates and percent changes for the county, cities,
and school districts.
Taxing Jurisdictions - Rate Information
Many factors are considered when taxing jurisdictions set
the rates each year. Two notable
components are the jurisdiction’s proposed budget and the value of the property
within its boundaries. Regardless of the
various factors in the rate determination process, the charts above illustrate the
effect of the increased property values for 2022 which resulted in an average
and median rate reduction of approximately 6% for those jurisdictions
listed. Those rate reductions translated
to the considerable amount of 2022 residential tax bills that went down despite
never-seen-before market value increases featured initially in this
article. To see information relative to 2022
and prior taxes for your specific property, please use this link to the
Williamson County Tax Assessor Collector’s website. From there, you can search for your property
and see a comparison of yearly total tax bills and payments as illustrated
below. In this example, a property with
a homestead exemption had the 2022 tax bill decrease from what was paid in 2021
by $227 even though the market value increased by 49.45% and the assessed value
increased by only 10% due to the homestead cap requirement explained
earlier.
Additional Insights
In addition to the websites previously provided, more
information regarding property values and associated taxes can be found at the
following websites:
And