When house hunting in Fort Worth, it’s important to understand how property taxes will impact the overall cost of homeownership. While the tax rate for Fort Worth is on par with most major cities in Texas, it’s higher than other major cities like New York City, San Francisco, and Washington, DC. However, since Texas residents do not have to pay state income tax or an annual vehicle tax, a higher property tax rate in Fort Worth does not necessarily mean a more expensive home is out of your budget. The savings from no income tax alone may more than make up for the difference. To truly understand the impact of Fort Worth property taxes on homeownership costs, it’s important to understand how these tax rates are calculated and how increasing property assessments may impact your overall tax bill.
What is the Current Fort Worth Property Tax Rate?
As a general rule of thumb, depending on where you buy in Fort Worth, property tax rates should run between 2.32 and 2.85 percent of assessed home value as of 2015. Calculating Fort Worth the exact property tax rate based off estimations can be a bit tricky, however, due to overlapping county, city, school, community college and “special” districts. Essentially, two homes can be in the same city, but have different tax rates if they fall into different school, county, or community college property tax districts.
In Fort Worth, the governing body (e.g., the City Council, School Board, or County Commissioners) of each taxing entity sets the rates for their jurisdiction. While the Tarrant Appraisal District does not levy taxes, the district will provide a general estimate of taxes on each property. In fact, Tarrant County has an online property tax estimator which can help you zero in further. Since estimates can vary, you should confirm the exact rates levied with the individual governing bodies.
Once you have determined your combined total property tax rate, you must now determine the property value assessment. Generally, market rates are used to determine the base assessment, however many factors, including improvements, can drive up assessment value. When buying a house it is extremely important to check the listed assessment value. If you feel the assessment and market values are unfairly marked, you can challenge those calculations with the local office.
To get your total effective tax, multiply the combined local tax rates by your taxable property assessment amount. This should approximate your tax costs and help you determine the property affordability.
Should I Expect Future Fort Worth Property Tax Rate Increase?
Fort Worth, like Dallas, has seen an increase in property value due to a number of corporate relocations and a b economy. With more people moving to Fort Worth, steady demand has resulted in a decrease in the number of available properties. High demand and low inventory means higher property values, which leads to a higher tax bill. Even though the tax rate has held steady since 2007, increased values lead to increased assessments and higher total taxes paid. For homeowners with higher assessments, this has led to higher total tax bills.
A significant increase in property values is contributing to calls for lower tax rates in major Texas cities including Dallas and Austin. In Austin, for example, some government officials have spoken out against combat future rate hikes. Last year in Dallas, Mayor Mike Rawlings called for property tax cuts, or at least a freeze on rate hikes. Good news for Fort Worth house hunters: the city is not currently raising rates. In fact, city rates have remained unchanged since 2007 and the city stated that it does not intend to increase the rate anytime soon.
Paying Property Taxes in Fort Worth: What Should New Residents Expect?
When relocating to Fort Worth, expect to pay higher property taxes than other parts of the country. Texas, on a state-by-state basis, has the fifth highest property tax rate in the United States, according to a recent study by WalletHub. On the bright side, Texas has no income tax and no vehicle property tax. Depending on your income, the lack of state income tax may help offset an increase in property taxes from your previous location.
As you become ready to purchase a home, tax district research can help you maximize your property affordability. For example, is a particular school district important to you? If so, expect the best school districts to go hand-in-hand with higher rates. However, if a specific school district is not important, choosing a school district with a lower tax rate will help lower your total tax payment.
When house hunting in Fort Worth, realize that you will need to start by making a few assumptions and get more specific as you narrow in on your top neighborhoods. Assume that you will pay around 2.3 to 2.85 percentage combined in property tax. Depending on your exact location, you can aim for the lower end of the tax scale, but you will need to confirm your property’s exact jurisdiction with your real estate agent and local Appraisal District.
How Does Fort Worth Property Tax Compare with Other Major Cities?
Within Texas, the Fort Worth has the highest combined property tax rate, although this rate is on par with other major cities: Dallas at 2.173; Houston at 2.259 percent; San Antonio at 2.097 percent; and Austin at 1.973 percent.
Compared to other major metropolitan areas, however, Fort Worth is more expensive. Fort Worth outranks major U.S. cities including Chicago (2.009 percent), New York (1.925 percent), Atlanta (1.14 percent), Philadelphia (0.949 percent), Los Angeles (0.793), San Francisco (0.683 percent), and Washington, DC (0.572 percent).
Fort Worth Property Taxes: What’s Next?
When comparing property tax rates within Fort Worth (or even within other cities), property value estimators can be helpful locating property in your price range, but assessments can make or break affordability in certain cases. Don’t trust estimations. Call the local district tax authorities for specifics on the exact property you plan to buy. Use the official assessment and official combined tax rates to calculate what you owe. Combine this yearly tax with the market value to determine if the property meets your standard of affordability.
