Texas Property Tax Loans – A Primer for Consumers

Owning property is a goal most American have. Being Free-and-Clear on your mortgage is another goal. In fact, you cannot really say that you own the property until it the mortgage note is paid.

Unfortunately, simply paying the mortgage off does not mean that you own the property.

• Texas, like all other states, reserves the right to assess a tax on your property that is superior to your right to use of the property.
• What that means is that if you fail to pay your property taxes for a long enough period of time the State of Texas reserves the right to take the property from you and sell it to someone to satisfy the property tax assessment that you failed to pay.

Bottom line… you are not the real owner of the property… the State of Texas is the real owner and you are simply renting the right to use the property by agreeing to pay the taxes on the property. Now, the state applies this superior right in the form of County Tax Authorities. Each County reserves the right to apply taxes at a rate that is partially governed by State Law and partially established by the revenue needs of the individual County.

It is very common for people to fail to pay their property taxes, often due to a shortage of cash flow. When this happens it is nice to know that an option exists whereby you can take out a loan to pay your property taxes and avoid both penalties for late payment and avoid the potential that your property will be have a lien placed on it by the county.

What are property taxes?

Property taxes are the primary source of revenue for all local and state governments in the United States and they provide the revenues that support public projects and services such as the construction and maintenance of streets and roads, police services, schools, fire departments, as well as city, county, and state governments. All Real Property owners pay taxes to support the public services in the County in which the property is located.

Property taxes must be passed along to the consumer when the property is used in the production of goods and services. Property taxes are included in the price of rents for individuals and businesses. Many people think that property renters are not responsible for property taxes, but renters indirectly pay for the cost of property taxes through their rent. Retailers who rent their stores from a landlord increase the prices that they charge for their merchandise to accommodate the hidden costs of property taxes that the landlord owners have to pay. Property taxes affect all of us.

How does a County Tax Assessor determine property tax valuation?

County Tax Assessors use a variety of tools and techniques to determine taxable property valuation. Ideally the Fair Market Value of the property is the foundation for a tax assessment valuation. For many properties the Tax Assessor can use recent sales of comparable properties in the county to determine Fair Market Value. Fair Market Value is defined as the price at which a Seller is willing to sell to a Buyer when both the Buyer and the Seller have reasonable access to information about market conditions and valuations and they agree to a price when neither party is under duress or undue influence to consummate the sale.

In situations where there is not enough information about recent sales to determine Fair Market Value the Tax Assessor will use alternative valuation methodologies such as estimating the cost of construction of the property improvements and estimating the cost of the raw land. This can be done by using construction cost estimation software.

In our next article we will talk about how to file a protest notice with the County to contest the valuation that has been assigned to your property.

About Reliance Tax Loans.

Reliance is a Texas Property Tax Loans lender and has an excellent reputation for straight dealing in the industry. Reliance will not sell your loan to another party and will do their best to make your tax payments both affordable and convenient for you. Reliance subscribes to the highest industry standards of confidentiality. Interest rates are reasonable. Reliance arranges to have the tax lien filed by the government to be placed in their name to reduce paperwork for you, your lender, and the taxing entity. Reliance Tax Loans is a member of FTLA, an agency that ensures the highest integrity in the industry.

Reliance Tax Loans makes certain that all aspects of the loan agreement is clear and fair to the customer. Please call Toll Free: 1-888-250-2645 for an appointment or complete an online application now.