With big tax implications, new Austin home appraisals soar

The big picture: Skyrocketing property valuations could mean higher taxes — and, thus, climbing rents.

• As if that squeeze wasn't already pronounced enough.

Driving the news: Appraisal notices are now arriving in the mailboxes of 400,578 Travis County property owners.

• The notices include the market value assigned to a property as of Jan. 1 and the taxable value of that property based on its exemptions.

Before tearing open the envelope: Fix yourself a drink.

Unless you're planning to sell your home, the contents could ultimately make your wallet feel unwell.

By the numbers: Overall, the Travis County appraisal roll increased 43% to $447 billion, led by a 56% increase in residential properties.

• The 2022 median market value for a residential property in Travis County is $632,208, and the median taxable value of a residential property is $338,344.
• A median-value home in the metro area, paying Austin school district taxes, could pay at least $12,200 in taxes.
• Under the current rates, the tax bill for the median home in 2021 — valued at roughly $410,000 — could have been at least $7,900.

Yes, but: Per state law, all homeowners are protected by a 10% appraisal cap — any appraisal increase above 10% is exempt from taxation — a provision put together just for a situation like today’s real estate market.

• School taxes are also frozen for homeowners aged 65 or older or disabled.

Property tax bills this year "won’t come near to matching the appraisal increases," Dale Craymer, president of the Texas Taxpayers and Research Association, told Axios.

How we got here: The Austin housing market has been on fire.

• Plus: There's no state income tax, so city services, schools, firetruck operations, etc. tend to get much of their budget from property tax revenues.
• Limited housing inventory and cutthroat demand has led to bidding wars that often lead houses to sell well-above asking price.

• High-wage earners who have moved to Austin during the pandemic have played a major role in driving up costs.
• Supply chain shortages have increased the cost of construction and extended the time it takes to build new housing.

What's next: If you believe that your property's market value is incorrect, you have the right to protest.

• Plus: On May 7, Texas voters will vote on amendments to the state constitution that could lower their property taxes. Voters will weigh in, for example, on whether to increase school district exemptions from $25,000 to $40,000.
• Yes, but: Schools rely on property taxes for everything from teacher pay to fixing basketball hoops.
• Your tax bill will be set this summer when local governments adopt their tax rates.

💭 Our thought bubble: Potentially rising tax bills could accelerate the gentrification that has shaped the city this last decade, as working class homeowners, already grappling with inflation, will face an even bigger bite — raising the incentive to sell out and relocate to the suburbs.