Reassessment Explained: How It Affects Your Property Taxes

March 11, 2025

Definition: A reassessment is a periodic review of a property’s market value conducted by local appraisal districts to determine its taxable value. This process helps set property tax rates based on current market conditions.

Science: The term “reassessment” comes from the Latin word assessare, meaning “to fix a tax upon.” In modern usage, reassessments ensure that property values align with changing real estate markets, influencing how much tax property owners owe.

Examples:

A homeowner who adds a second story to their house may trigger a reassessment, increasing their property tax bill.
If local property values decline, a reassessment might lower a property’s taxable value.
A commercial property in a growing business district may see a reassessment reflecting higher demand and increased land value.

Fact: While Texas properties can be annually reassessed, the state doesn’t impose a statewide property tax. Instead, local appraisal districts set values, and tax rates are determined by city, county, and school district budgets. This means your tax bill can fluctuate even if your property value stays the same.

Key Takeaways:

Educate Yourself on the Reassessment Process: A reassessment directly impacts your property’s market value and subsequent tax obligations. Knowing when and how reassessments occur can help you anticipate changes to your tax bill and take action if needed.
How to Counterbalance Rising Assessments: Market trends, home improvements, and new developments can push property values higher, but exemptions and protests serve as powerful tools to counterbalance excessive increases and keep tax burdens in check.
Reducing Property Tax Burdens Strategically: Proactively challenging overassessments and leveraging expert guidance can help homeowners and commercial property owners secure fair valuations.

Not everyone knows the ins and outs of reassessments, and that’s understandable as there are plenty of other things to worry about in your day-to-day life. Yet, a sudden increase in your property tax bill can be an unwelcome surprise, making it important to understand how reassessments work. At the heart of managing your property tax responsibilities is reassessment, a periodic review that can significantly impact your tax liabilities.

Texas Tax Protest, a leader in property tax consulting, is here to simplify the process. Our approach blends cutting-edge technology with hands-on service, giving property owners the expertise and advocacy to counterbalance rising assessments and potentially reduce tax burdens. In this article, we’ll break down what reassessment entails, how it affects your property taxes, and why staying informed can help you avoid overpaying in the Lone Star State.

How Reassessment Impacts Your Property Taxes

Property reassessments play a crucial role in determining how much you owe in taxes each year. When your local appraisal district reassesses your home, they evaluate its current market value, which directly influences your tax bill. If your home’s assessed value increases, your property taxes will likely rise as well. However, a lower reassessment could reduce your tax burden.

In Texas, reassessments typically occur annually. That means even if you haven’t made changes to your home, shifting neighborhood trends could push your home’s value—and your tax bill—higher. For example, if new businesses, parks, or shopping centers open nearby, the demand for homes in your area may increase, leading to higher property valuations.

Why Property Assessments in Texas Can Fluctuate

Even small changes in your home or neighborhood can influence your property’s assessed value. Texas appraisal districts consider various factors when determining reassessments, including real estate trends, home improvements, and local infrastructure projects.

For instance, if your neighborhood sees an influx of new developments like a school, a major highway expansion, or a corporate headquarters moving in, home demands may skyrocket. This increased demand can drive up property values. Similarly, a rise in home sales at higher price points in your area can cause appraisal districts to reassess surrounding properties at elevated values.

Conversely, certain factors may lower your property’s valuation. A decline in local job opportunities, a surplus of vacant homes, or damage from natural disasters like hurricanes or floods could lead to lower assessed values. Homeowners who experience property damage should report it promptly to their appraisal district, as failing to do so could result in an inaccurate and inflated valuation.

How Overvaluation Leads to Higher Property Taxes

When a reassessment overestimates your home’s market value, you may end up paying more in property taxes than necessary. This can occur in Texas, where rapidly shifting real estate markets can sometimes lead to appraisal districts assigning values that don’t accurately reflect your home’s true worth.

For example, imagine you live in a quiet neighborhood where nearby homes recently sold for premium prices due to high demand. While your property may not have been updated in years, the reassessment could place your home in the same price bracket as newer, upgraded homes, resulting in an unfair tax increase.

Another issue arises when appraisal districts rely on limited or outdated data. If your home’s assessed value was determined using sales figures from peak market conditions, it might not reflect recent slowdowns in real estate activity. This is why it’s essential to review your property’s reassessment carefully—if the valuation seems too high, you have the right to challenge it.

Being aware of these factors can help you feel more empowered when it comes to your property tax assessments. At Texas Tax Protest, we specialize in helping you understand and, if necessary, contest these increases to achieve a fair tax burden. If you’re seeking expert guidance on navigating these changes, contact us for personalized assistance.

How Reassessment Impacts Your Property Taxes

How Market Value’s Impact Reassessments

Property reassessments in Texas are heavily influenced by market value—the price a home might reasonably sell for under current conditions. If local real estate values rise, reassessments can push tax bills higher. Conversely, if the market cools, some homeowners might see lower property tax liabilities. However, these fluctuations don’t always reflect reality, which is why understanding how market value is determined is key to ensuring fair property taxation.

Since Texas does not have a state property tax, local appraisal districts conduct reassessments using sales data, economic trends, and neighborhood factors. But what happens when market shifts don’t accurately reflect your home’s condition or true worth? A reassessment based on inflated values can leave you paying more than necessary—unless you take action. Texas Tax Protest helps homeowners analyze their assessments and file protests when values don’t align with actual market conditions.

What Determines Market Value in a Reassessment?

Market value isn’t just about what a house is worth—it’s about what similar homes are selling for and how local conditions influence demand. Texas appraisal districts consider multiple factors when reassessing properties, including:

Recent Sale Prices: If neighboring homes sell at higher prices, your reassessment may reflect those increases—even if your property hasn’t changed.
Home Improvements: Renovations like new kitchens, additional rooms, or major landscaping can boost market value and lead to a higher reassessment.
Neighborhood Changes: New schools, shopping centers, or highway expansions can increase desirability, driving up valuations across the area.
Economic Trends: A booming job market and population growth often push home prices higher.

For example, if a major tech company moves into Austin, surrounding neighborhoods might see property values surge due to increased demand. Even if your home remains unchanged, a reassessment could assign a higher value simply based on rising market trends. Texas Tax Protest helps homeowners understand these factors and challenge assessments that don’t align with their property’s true condition.

When Market Trends Lead to Overvaluation

Not all reassessments reflect a property’s actual worth. Sometimes, rapid market shifts or incomplete data lead to overvaluations, where a home is assessed at a higher value than what it could realistically sell for. This can result in homeowners paying excessive taxes despite no real increase in their property’s marketability.

Consider this: You own a modest 1980s home in Houston, and over the past year, newer homes in your area have sold for record-breaking prices. If your reassessment is based on those sales, your property’s value might be artificially inflated, even though your home lacks the modern upgrades of those newly sold properties.

Similarly, if your neighborhood experienced a real estate boom two years ago but home prices have since declined, an outdated reassessment could still be based on peak market conditions. Without a protest, you could end up paying for a valuation that no longer reflects current trends.

Exemptions and Deductions To Consider

Property taxes can take a significant bite out of your budget, but exemptions and deductions offer a way to counterbalance rising assessments and lower your overall tax burden. In Texas, several programs help homeowners, veterans, seniors, and agricultural property owners reduce their taxable values, potentially saving thousands each year.

Homestead Exemption

For Texas homeowners, the Homestead Exemption is one of the most effective ways to lower property taxes. This exemption applies to primary residences and reduces the home’s taxable value for school taxes, making it a lifelong benefit for qualified homeowners.

Here’s how it works: If your home is valued at $300,000 and you qualify for a $100,000 homestead exemption, your taxable value is reduced to $200,000. This adjustment lowers the amount of property tax you owe, leading to significant savings over time. To qualify, you must:

Own and occupy the home as your primary residence on January 1 of the tax year.
You must own the property and hold it in your name or be able to document ownership if held in an entity or trust
Submit an application to your local appraisal district.

Senior Citizen and Disabled Person Exemptions

Texas offers additional exemptions for seniors (65+) and disabled homeowners, recognizing the need for financial relief as homeowners approach retirement or face physical challenges. These exemptions reduce taxable home values and freeze school district taxes, preventing them from increasing over time.

For example, a retired homeowner in Dallas may qualify for a $10,000 senior exemption in addition to the homestead exemption, leading to a lower taxable value and long-term stability in tax rates. Similarly, individuals with disabilities can apply for an equivalent exemption, providing much-needed financial relief. Eligibility requirements typically include:

Being 65 or older or qualifying as disabled according to the Social Security Administration.
Living in the home as a primary residence.
Filing an exemption application with your local appraisal district.

Veteran Exemptions

Texas provides generous property tax exemptions for veterans, particularly those with service-related disabilities. These exemptions can substantially reduce or even eliminate property taxes depending on the level of disability.

For instance, a veteran with a 100% disability rating is eligible for a total property tax exemption, meaning they pay nothing on their primary residence. Veterans with a partial disability rating can receive scaled exemptions based on their disability percentage. Additionally, surviving spouses may qualify for continued benefits. Here’s what veterans need to apply:

Official documentation verifying disability status.
Proof of homeownership and primary residency.
Application submission to the appraisal district.

Many veterans aren’t aware of these benefits or struggle with the paperwork involved. Texas Tax Protest helps veterans and their families navigate the process with ease, so that they may claim the full exemption they’re entitled.

Agricultural Exemption

For Texas landowners involved in agriculture, the Agricultural Exemption (also known as the Open-Space Agricultural Appraisal) provides a way to dramatically lower taxable land value based on its agricultural use rather than its market value. This exemption applies to:

Farms and ranches are used for cattle, crops, beekeeping, or timber production.
Land that meets specific productivity requirements set by the county appraisal district.
Properties that have been in agricultural use for at least five years.

For example, a property owner in Central Texas who raises livestock may qualify for the exemption, which could reduce the taxable value of their land from market price to its agricultural production value—a substantial tax savings. Maintaining eligibility requires proper documentation, including:

Proof of active agricultural use.
Filings with the county appraisal district.
Compliance with minimum acreage and productivity requirements.

The Texas Reassessment Process

Property reassessments in Texas determine how much you owe in property taxes based on your home’s market value. These reassessments, conducted by local appraisal districts, aim to ensure fair valuations, but errors can sometimes lead to inflated tax bills. Understanding how the process works can help you stay proactive and challenge inaccurate assessments.

Annual Appraisal Updates: Each year, appraisal districts review and adjust property values based on market trends, home conditions, and improvements.
Notice of Appraised Value: Homeowners receive a formal notice detailing their property’s assessed value, usually in the spring. This is your first opportunity to review and dispute inaccuracies. (Some appraisal districts do not send notices when values decrease or remain the same).
Review Your Assessment: Check for errors, overestimations, or outdated data. If your property value seems inflated compared to similar homes, it may be time to file a protest.
Gather Evidence: Keep detailed records such as recent purchase contracts, photos, repair estimates, and comparable home sales to support your case.
File a Protest: If your property is overvalued, you can challenge the assessment with your appraisal district via an informal hearing and ARB hearing. Texas Tax Protest specializes in preparing strong cases to help reduce tax stress.
Appeal If Necessary: If your value is sustained during an appeal, you can escalate your case to District Court or Binding Arbitration for a second attempt at a lower value.

If you suspect your reassessment is unfair, Texas Tax Protest is here to help. Contact us today to navigate the process and secure a fair property valuation. Reach out to us today so we can help you secure a fair valuation.

Read also:

Frequently Asked Questions About Property Reassessment and Taxes

How often are properties reassessed?

Properties in Texas are typically reassessed every year to determine their fair market value. This annual reassessment aims to ensure property taxes are based on current market conditions, giving homeowners a clear understanding of their property’s value within the local real estate market.

What is the difference between assessment and reassessment?

An assessment refers to the initial evaluation of a property’s value for tax purposes. A reassessment is a subsequent evaluation that usually occurs annually or periodically to update the property’s taxable value, reflecting any changes in the real estate market or property improvements.

What are the consequences of not paying increased property taxes?

Failure to pay increased property taxes can lead to penalties, interest on unpaid amounts, and potentially a tax lien on your property. It’s crucial to address changes in your tax bill promptly to avoid these costly consequences.

Can reassessment affect my mortgage?

Yes, a reassessment can impact your mortgage payment if you have an escrow account. Your lender may adjust the monthly mortgage payment to cover any changes in property taxes resulting from the reassessment, affecting your overall housing costs.

What are the rights of property owners during reassessment?

As a property owner, you have the right to be informed about any changes in assessment, participate in hearings, and protest the reassessment if you believe it inaccurately reflects your property’s value. Consulting experts like Texas Tax Protest can help you navigate this process effectively.

What factors contribute to a change in property value?

Several factors can influence a property’s reassessed value, including market trends, property improvements, changes in neighborhood characteristics, and economic conditions. Each of these elements can lead to adjustments in property valuation by assessors.

Who is responsible for conducting property reassessments?

In Texas, local appraisal districts are responsible for conducting property reassessments. These entities evaluate properties within their jurisdiction to determine equitable values for tax purposes, using established guidelines and methodologies.

How does reassessment reflect market changes?

Reassessments take into account recent sales data, economic shifts, and changes in local real estate markets. This process helps ensure that property values align with current market realities, balancing tax burdens fairly among property owners. For professional assistance, you can reach out to Texas Tax Protest here.