Clarity on the (10-percent) homestead cap increase

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Editor:

Re: “Coldewey should read Texas law,” May 5.

In Mr. William H. West’s letter, he wrote that the 10 percent homestead cap applies to Land Market Value as well. I eagerly waited for comments, but did not see any.

My 0.36-acre homestead land went up 652 percent this year, which the Wilson County Appraisal District said is correct … no adjustment.

I did some web surfing and found what I believe corroborates this fact (www.wcad.org/market-value-and-the-homestead-cap/).

When you received your Notice of Appraised Value this year, you may have noticed several different values printed on it. Having multiple and different values on the notice can be confusing, especially with regards to the Homestead Exemption and the “homestead cap.” Below, we have attempted to clarify differences between two of these values and to explain how the homestead cap affects these values.

Market Value:

Per the Texas Property Tax Code, all taxable property must be valued at 100 percent of market value as of January 1 each year. This value is shown on your notice as “Total Market Value.” Because it is based on recent sales, the Total Market Value may change upwards or downwards any amount depending on recent market trends and is not limited to increases of 10 percent or more. It may change as much as the current market changes.

Assessed Value (“Homestead Cap Value”)

Per the Texas Property Tax Code, an exemption for taxation is available to an individual’s primary residence. One of the features of the exemption is a limit to the amount that the value for taxation can increase from one year to the next. This limit is frequently referred to as the “homestead cap.” The “capped” value is shown as the “Assessed Value” and is located at the bottom of the list of values on your notice or online. The assessed value is limited by the Homestead Exemption and may not go up more than 10 percent in one year in most cases as long as the exemption was in place for the prior year for the current owner. This number is calculated using the previous year’s Assessed Value and a “cap” of 10 percent. For example:

In 2020, a property with a Homestead Exemption had a market value of $226,360 and an assessed value of $226,360. For 2021, the subject’s market value increased to $265,042, but the assessed value is limited to the previous year’s assessed value ($226,360) plus 10 percent of that value ($226,360 x 10 percent = $22,636). The assessed value for 2021 is $248,996. This taxpayer’s value for taxes is starting at $248,996 instead of $265,042 in 2021.

I have submitted said article with my protest to the Wilson County Appraisal District for a response.

FELIX JUAREZ
Floresville

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