Resident's Guide to Property Taxes
This page is intended to educate and provide helpful information regarding property taxes in White Settlement, Texas. More information can be found by visiting Tarrant Appraisal District and Tarrant County Tax-Assessor.
Property Tax Process Chart
The property tax process is regulated by property tax code which is set by the Texas Legislature process and rolled out by the State Comptroller of Texas. Each part of the process has guidelines and procedures to follow throughout the process. Each entity is responsible for a different piece of the process and work together to collect the taxes from property owners. The sections in grey below are from the State Comptroller website and help detail some of the major guidelines that are built into the process.ssessor.
General Property Tax Information
Who charges property taxes?
Property Taxes are charged by municipalities, counties, school districts, and special purpose districts like emergency services, college, hospital, etc.
Who collects your property taxes?
The City taxes are collected through an interlocal agreement with Tarrant County to allow for one place for all taxes to be paid. The County sends money up to daily to the City.
Who appraises your property?
The City appraisals are done through an interlocal agreement with Tarrant Appraisal District.
Who determines the property tax rate calculation?
Property tax calculations are based on property tax code. Tax Entities use the formulas generated from state legislature to calculate the no new revenue and voter approval tax rates. The City determines the tax rate based on these calculations but go only go above these rates with an election.
Where do your property taxes go?
The property taxes for your property are divided between each taxing entity based on the breakdown on your tax bill. The Maintenance & Operations (M&O) portion of the tax rate is distributed to the City's General Fund and used to fund public safety, community services, and streets. The Interest & Sinking (I&S) portion of the tax rate is distributed to the City's Debt Service Fund to pay for the debt the City has issued.
When are property tax hearings and Council votes?
The City Council receives the first presentation on property taxes at the regular City Council meeting in August. The 2nd Tuesday of August is when City Council does a record vote on the highest property tax rate that will be considered during the budget process.
The City usually holds the public hearing for property taxes the last Tuesday of August and approves the tax rate at the regular Council meeting in September.
What time frame does your tax bill cover?
Property taxes are billed in October each year and due by January 31st which penalties and interest due after February 1st. The time frame for October property taxes is for the prior year calendar year. For example, January - December 2022 values are billed in October 2023 after taxing entities approve tax rates in August or September 2023.
Why does this matter to you?
Whether you are a property owner or renter, you generally are paying for property taxes. It is part of the mortgage or rent of a property. It is important to understand what this money is used for and that your City could not provide these services without these funds.
Property Appraisal Process
The property tax process is also known as the property appraisal process. This cycle begins with the development of each property's assessed value by the appraisal district. The appraisal district then applies deductions, exemptions, and other value adjustments which become the certified net assessed values. These values are sent to the local government to calculate the tax rate based on current tax code put into legislation by the State Comptroller of Texas. The tax rate is certified by the local government entity or the county. The appraisal district sends the values to the county while the local government entity sends the tax rate to the county. The county then calculates, generates and mails tax bills to each taxpayer. Tax bills are due January 31st each year.
According to state law, appraisal districts are to appraise property at its market value. In fact, appraisal districts are regulated by the State of Texas to make sure appraisal district do their jobs fairly and accurately. They follow the law, state regulations, and the reality of real estate market sales when making our value determinations.
A property owner can protest values through the appraisal district's Appraisal Review Board (ARB) process. This must be done by May 31st each year.
Taxable Value by Type
The City has over 12,000 accounts of which over 5,300 of these are mineral lease accounts. Over 5,600 of the accounts are residential properties which accounts for over 50% of the city's values. This puts a heavy tax burden on the residents of the city and in the current market environment this will continue to increase due to the differences in valuation between residential and commercial properties.
Each county appraisal district determines the value of all taxable property within the county boundaries. Tax Code Section 25.18 requires appraisal districts to reappraise all property in its jurisdiction at least once every three years. Tax Code Section 23.01 requires that appraisal districts comply with the Uniform Standards of Professional Appraisal Practice if mass appraisal is used and that the same appraisal methods and techniques be used in appraising the same or similar kinds of property. Individual characteristics that affect the property's market value must be evaluated in determining the property's market value.
Before appraisals begin, the appraisal district compiles a list of taxable property.
The list contains a description and the name and address of the owner for each property. In a mass appraisal, the appraisal district then classifies properties according to a variety of factors, such as size, use and construction type. Using data from recent property sales, the appraisal district appraises the value of typical properties in each class. Taking into account differences such as age or location, the appraisal district uses typical property values to appraise all the properties in each class.
Three common approaches that the appraisal district may use in appraising property are the sales comparison (market) approach, the income approach and the cost approach.
- The market approach to value is based on sales prices of similar properties. It compares the property being appraised to similar properties that have recently sold and then adjusts the comparable properties for differences between them and the property being appraised.
- The cost approach is based on what it would it cost to replace the building (improvement) with one of equal utility. Depreciation is applied and the estimate is added to the land value.
A Notice of Appraised Value informs the property owner if the appraisal district intends to increase the value of a property. Chief appraisers send two kinds of notices of appraised value.
A detailed notice contains the description of the property; taxing units allowed to tax the property; preceding year's appraised value; preceding year's taxable value; current year's appraised value; an explanation of available partial or total exemptions; last year and current year exemptions; statutory language; explanation of how to protest; ARB hearing information; an explanation of the availability and purpose of an informal conference with the appraisal office before a hearing on a protest; and an explanation that the appraisal district only determines a property's value and does not decide on tax increases.
A detailed notice is sent if:
- the value of a property is higher than it was in the previous year (The appraisal district's board can decide that it will send detailed notices only if a property's value increases by more than $1,000.);
- the value of a property is higher than the value the property owner gave on a rendition (see section below);
- the property was not on the appraisal district's records in the previous year; or
- an exemption or partial exemption approved for the property for the preceding year was canceled or reduced for the current year.
Tax Code Section 25.19 requires the chief appraiser to send the notice of appraised value by May 1 or April 1 for residence homesteads, or as soon thereafter as possible. If a property owner disagrees with this value, the property owner may file a protest with the appraisal review board (ARB).
The notice of appraised value includes a protest form and information about how and when to file a protest with the ARB if the property owner disagrees with the appraisal district's actions.
For additional information on protests and appeals, see the State Comptroller of Texas' Appraisal Protests and Appeals webpage.
Source: State Comptroller of Texas
Annual Budget & Levy Adoption Cycle
Property taxes represent a property owner's portion of the local government's budgeted spending for the current year. Increases or decreases depend upon a local government's fiscal management, the assessed valuation of a property and/or local tax rates, which are based on the budget submitted by local government taxing entities that provide services to each community. In January 2020, Senate Bill 2 was put into place that changed the voter approval rate (formerly rollback rate) from 8% to 3.5% for taxing entities. Anything rate over the voter approval rate must go to the voters for approval.
Local spending is one of the primary drivers for property tax rate increases or decreases. Each year, the City of White Settlement Council adopts a budget, tax rate, and tax levy. This rate becomes the effective rate applicable to an assessed value of property. Ultimately, it is the cumulative change in assessed value, eligible deductions, levies adopted, and tax rates that drive a particular property's tax bill.
Truth-in-taxation requires most taxing units to calculate two rates after receiving a certified appraisal roll or certified estimate of taxable value from the chief appraiser - the no-new-revenue tax rate and the voter-approval tax rate. The type of taxing unit determines which truth-in-taxation steps apply.
No-New-Revenue Tax Rate
The no-new-revenue tax rate enables the public to evaluate the relationship between taxes for the prior year and for the current year, based on a tax rate that would produce the same amount of taxes if applied to the same properties taxed in both years.
Although the actual calculation is more complicated, a taxing unit's no-new-revenue tax rate generally equal to the last year's taxes divided by the current taxable value of properties that were also on the tax roll last year. The resulting tax rate, used for comparison only, shows the relation between the last year's revenue and the current year's values.
Voter-Approval Tax Rate
The voter-approval tax rate is a calculated maximum rate allowed by law without voter approval. Most taxing units calculate a voter-approval tax rate that divides the overall property taxes into two categories - M&O and debt service.
The voter-approval tax rate provides cities and counties with about the same amount of tax revenue it spent the previous year for day-to-day operations plus an extra three and a half percent for operations and sufficient funds to pay debts in the coming year. For special taxing units, junior college districts and hospital districts, the voter-approval tax rate provides an extra eight percent increase for operations and sufficient funds to pay debts in the coming year.
School districts voter-approval rate is equal to the district's maximum compressed rate plus the greater of the previous year's enrichment rate or five cents per $100 of taxable value. They then add the debt rate to get the final voter-approval tax rate. School districts should consult the Texas Education Agency for guidance on compression rates.
For all taxing units, the debt rate portion of the voter-approval tax rate is the current year's debt payments divided by the current year's property values. The debt rate may rise as high as necessary to cover debt expenses.
Most taxing units are required to publish their calculated no-new-revenue and voter-approval tax rates on the home page of the taxing unit's website. Most taxing units are required to file one notice before adoption of a tax rate in compliance with Tax Code requirements. School districts must comply with notice requirements in the Education Code, local government taxing units and special districts must comply with notice requirements in the Property Tax Code, and water districts must comply with requirements defined in the Water Code. All notices provide details on the no-new-revenue tax rate, voter-approval tax rate and proposed tax rate. The notice includes the date and time of the meeting to adopt a tax rate. Generally, if the proposed rate is higher than the voter-approval rate, the notice will also include information about the next uniform election date when voters would have to vote on the tax rate.
After the taxing unit publishes the required notice, taxpayers must have the opportunity to express their views on tax increases at hearings. The type of taxing unit determines the hearing requirements.
Small taxing units have no public hearing requirement. All other taxing units hold one public hearing. A quorum of the governing body must be present at all hearings. All public hearings and public meetings must be open to the public and follow Texas Open Meetings Act requirements.
A taxing unit other than a water district must adopt its tax rate before Sept. 30 or by the 60th day after the taxing unit receives the certified appraisal roll.
The taxing unit is required to hold an election to approve the tax rate on the next uniform election date if it adopts a tax rate that exceeds the voter-approval rate. In this case,Tax Code requires the governing body to adopt the tax rate no later than the 71st day before the next uniform election date.
If a taxing unit misses the deadline, the governing body must ratify either the no-new-revenue tax rate or last year's tax rate, whichever is lower, as the adopted tax rate before the fifth day after establishing that tax rate.
In most cases, if a taxing unit adopts a tax rate that exceeds the voter-approval tax rate, the taxing unit must hold an election on the next uniform election date. To do this, the taxing unit must order the election no later than the 78th day before election day.
If a taxing unit calculates a de minimis rate and it adopts a tax rate greater than its voter-approval rate but less than its de minimis rate, the voters in the taxing unit may petition for an election on the tax increase.
If the taxing unit is in an area declared a disaster by the Governor and increased revenue is needed to respond to the disaster, the taxing unit is not required to hold an election to approve the tax rate in the year following the year in which a disaster occurs.
A school district must automatically hold a tax rate ratification election (TRE) if the trustees vote to adopt a tax rate that exceeds the voter-approval tax rate.
In all cases, if the majority of ballots are cast in favor of the proposition, the tax rate for the current year is the rate that was adopted by the governing body.
If the proposition fails, the taxing unit may not adopt a tax rate that exceeds the voter-approval tax rate.
Source: State Comptroller of Texas
Property Taxes
Property taxes are a primary source of funding for local government units, including counties, cities and towns, school districts and other special districts including hospital districts, college districts, and water and fire districts. Property taxes are administered and collected by local government officials. The City of White Settlement taxes are collected through an interlocal agreement with Tarrant County. These funds are used to pay for a core services including police, fire, streets, and administrative departments including salaries of local government units. Additionally, property taxes pay for secondary services of library, seniors, parks, and recreation.
Property taxes are an ad valorem tax, meaning that they are allocated to each taxpayer proportionately according to the value of the taxpayer's property. The city wide distribution of each property tax dollar is represented to the left.
City of White Settlement Tax Rate History
Limitation on Residence Homestead Value Increases (10% Appraisal Cap)
The appraised home value for a homeowner who qualifies his or her homestead for exemptions in the preceding and current year may not increase more than 10 percent per year.
Tax Code Section 23.23(a) sets a limit on the amount of annual increase to the appraised value of a residence homestead to not exceed the lesser of:
- the market value of the property; or
- the sum of:
- 10 percent of the appraised value of the property for last year;
- the appraised value of the property for last year; and
- the market value of all new improvements to the property.
Tax Code Section 23.23(e) defines a new improvement as an improvement to a residence homestead made after the most recent appraisal of the property that increases its market value and was not included in the appraised value of the property for the preceding tax year. It does not include repairs to or ordinary maintenance of an existing structure, the grounds or another feature of the property.
Tax Code Section 23.23(f) states that a replacement structure for one that was rendered uninhabitable or unusable by a casualty or by wind or water damage is also not considered a new improvement.
The appraisal limitation only applies to a residence homestead. As stated in Tax Code Section 23.23(c), the limitation takes effect Jan. 1 of the tax year following the year in which the homeowner qualifies for the homestead exemption. It expires on Jan. 1 of the tax year following the year in which the property owners no longer qualify for the residence homestead exemption.
If an ARB, arbitration or court determination lowered a property’s appraised value, the appraisal district cannot increase the appraised value unless the increase is reasonably supported by clear and convincing evidence.
April 30th is the deadline to file an exemption each year.
Homestead Exemptions
A homestead can be a separate structure, condominium or a manufactured home located on owned or leased land, as long as the individual living in the home owns it. A homestead can include up to 20 acres, if the land is owned by the homeowner and used for a purpose related to the residential use of the homestead.
There are several types of exemptions you may receive.
- School taxes: All residence homestead owners are allowed a $25,000 homestead exemption from their home's value for school taxes.
- County taxes: If a county collects a special tax for farm-to-market roads or flood control, a residence homestead is allowed to receive a $3,000 exemption for this tax. If the county grants an optional exemption for homeowners age 65 or older or disabled, the owners will receive only the local-option exemption.
- Age 65 or older and disabled exemptions: Individuals age 65 or older or disabled residence homestead owners qualify for a $10,000 homestead exemption for school taxes, in addition to the $25,000 exemption for all homeowners. If the owner qualifies for both the $10,000 exemption for age 65 or older homeowners and the $10,000 exemption for disabled homeowners, the owner must choose one or the other for school taxes. The owner cannot receive both exemptions.
- Optional percentage exemptions: Any taxing unit, including a city, county, school, or special district, may offer an exemption of up to 20 percent of a home's value. But, no matter what the percentage is, the amount of an optional exemption cannot be less than $5,000. Each taxing unit decides if it will offer the exemption and at what percentage. This percentage exemption is added to any other home exemption for which an owner qualifies. The taxing unit must decide before July 1 of the tax year to offer this exemption.
- Optional age 65 or older or disabled exemptions: Any taxing unit may offer an additional exemption amount of at least $3,000 for taxpayers age 65 or older and/or disabled.
Disability Exemptions
Tax Code Section 11.22 provides a partial exemption for any property owned by a disabled veteran. The amount of the exemption varies depending on the disabled veteran's disability rating. The surviving spouse who remains unmarried and surviving children of a disabled veteran may also qualify for an exemption under this section.
Tax Code Section 11.132 provides a partial exemption for a residence homestead donated to a disabled veteran by a charitable organization which may also extend to the surviving spouse of the disabled veteran who has not remarried. The amount of the exemption is based on the disabled veteran's disability rating.
Tax Code Section 11.133 entitles a surviving spouse of a member of the U.S. armed services killed or fatally injured in the line of duty to a total property tax exemption on his or her residence homestead if the surviving spouse has not remarried since the death of the armed services member.
Tax Code Section 11.131 entitles a disabled veteran awarded 100 percent disability compensation due to a service-connected disability and a rating of 100 percent disabled or of individual unemployability to a total property tax exemption on the disabled veteran's residence homestead.
This exemption extends to a surviving spouse who was married to a disabled veteran who qualified or would have qualified for this exemption if it has been in effect at the time of the veteran's death provided:
- the surviving spouse has not remarried;
- the property was the residence homestead of the surviving spouse when the veteran died; and
- the property remains the residence homestead of the surviving spouse
Source: State Comptroller of Texas
City of White Settlement Exemption Breakdown
As shown above, exemptions increase as the values have increased due to the 20% homestead exemption the city has adopted. These exemptions help offset the value of each property. For 2021-2022, exemptions account for 17.8% of the appraised value of properties.
Tarrant Tax Info.com provides an update from each taxing entity from prior year taxes to the proposed and adopted tax rate process. It provides a graph for change in $ and tax rate for each taxing entity during the process. Each taxing entity public hearing dates are posted on this site for one central location for residents. Taxable value changes are listed and contact information for each taxing entity is listed for residents to contact. Residents have an opportunity under the new SB2 legislation to provide feedback on whether they say yes or no to the new year tax rate. An example is provided above.
Additional Taxpayer Resources
Glossary of Terms
Below is a list of the commonly used terms referenced in the property tax assessment and budgeting process as defined by the State Comptroller of Texas
Assessment
The official act of discovering, listing and appraising property for ad valorem tax purposes. “Ad valorem” tax refers to any tax imposed on the basis of the monetary value of the taxed item. In Latin, the term literally means “according to value.”
Assessed Value (AV)
The total dollar value assigned to all real property and improvements and personal property subject to taxation. Locally elected assessors determine property values with assessment guides prescribed by the State Comptroller of Texas. These values may be changed by the county’s Property Tax Assessment Board of Appeals.
Exemption
A property tax benefit that excludes a property from taxation and, in some cases, assessment.
Homestead Deduction
A homestead can be a separate structure, condominium or a manufactured home located on owned or leased land, as long as the individual living in the home owns it. A homestead can include up to 20 acres, if the land is owned by the homeowner and used for a purpose related to the residential use of the homestead.
Levy
The product of a specified tax rate and the assessed value.
No New Revenue Tax Rate (Formerly Effective Tax Rate)
The no-new-revenue tax rate enables the public to evaluate the relationship between taxes for the prior year and for the current year, based on a tax rate that would produce the same amount of taxes if applied to the same properties taxed in both years.
Property Tax Levy
The property tax levy is the amount of money that a taxing body to be collected through property taxes.
Property Tax Rate
A percentage applied to each taxing unit’s assessed valuation that will produce the amount of that taxing unit’s levy or, in other words, the product of dividing the levy by the assessed value. The tax rate is expressed in terms of “dollars per $100 of assessed value.”
Real Property
The interests, benefits, and rights inherent in the ownership of land and anything permanently attached to the land or legally defined as immovable.
Taxing District
This is the term for the geographic area within which taxing units have the authority to fund themselves via property taxes.
Taxing Unit
An entity that has the power to impose ad valorem property taxes. Examples include counties, cities, towns, townships, and school districts.
Voter Approval Tax Rate (Formerly Rollback Tax Rate)
The voter-approval tax rate is a calculated maximum rate allowed by law without voter approval. The calculation splits the voter-approval tax rate into two separate components - a no-new-revenue M&O rate and a debt service rate. M&O includes such things as salaries, utilities and day-to-day operations. Debt service covers the interest and principal on bonds and other debt secured by property tax revenues. The voter-approval tax rate is the sum of no-new-revenue M&O and debt service rates, plus the unused increment rate, if applicable.