Real Estate Math

I hope you’ve had a great summer! My apologies for fewer emails/updates and info over the past few months! It was a first for us with elementary age kiddos home for the ENTIRE summer and mixing in some vacations and camps! I sure have learned a lot about time management and kiddos and had to show myself some grace in trying to get it ALL DONE!

But… school starts in just 5 days and I’m getting back in the groove with updates!

In this 3-part series, I’m going to tackle the numbers around buying your home in the greater Austin area.

Part I: Property Taxes
Part II: Interest Rates
Part III: Values

So, let’s dive into Part I: TAXES!

Benjamin Franklin once said, “In this world, nothing is certain except death and taxes.” (Sadly, some people are afraid of the tax man than they are of the former).

I am a HUGE proponent of finding all the legal ways in the tax code to minimize my tax burden. However, when it comes to property taxes, there’s little we can do to minimize what we have to pay the piper. And it’s one of the biggest expenses (in Texas anyways) when it comes to your property.

That being said… I have a little bit of GOOD NEWS!

Travis county has released their proposed budget and it looks like many homesteaded owners will see a tax DECREASE! 🙂 (And I suspect that the majority of other counties are going to follow suit)

And for NEW home purchases, that is translating into a lower overall tax RATE, which is great news.

For example, on our home, we’re looking at a decrease between $200 and $2200! Yes, that IS a big swing…

So let me explain 😉

Without getting too complicated, there are a couple of things to understand when it comes to calculating property taxes (and I’ll use an example of Leander ISD since I’m in the district and have the data available for illustration purposes).

NOTE: The reason for using the school district is that it is the single biggest line item for your property taxes.

  1. Proposed
    This is exactly what it sounds like. This is the amount proposed by the taxing authority. Think of this is as “what they want”… LISD is PROPOSING an amount of $9,544.19.
  2. No New Revenue
    A calculated rate that would provide the taxing unit with approximately the same amount of revenue it received in the previous year on properties taxed in both years. This rate calculation does not include the impact of additional tax revenue resulting from new construction. (The taxing entities cannot increase their revenue by more than 3.5%. This USED to be 8%, but the TX legislature made this change several years ago). The amount they would collect using the no new revenue model is $8021.72.
  3. Voter Approval
    A vote is required in order to exceed the rate listed there. In this example, our voter approval amount is $8870.27. So, in order to exceed this amount, the members of the district will need to vote to an INCREASED amount in taxes.

Clear as mud? I totally get it! So, if you have more questions, feel free to text/call me (561-459-9203) or email me!

I realize taxes are but one part of the equation… and that prices and interest rates are a big factor as well!

So… more on those next time 😉

I know there’s a lot of uncertainty right now with the markets, the media, and so on. But I can tell you from PERSONAL experience, my husband and I have picked up two new properties in the past month and are posed to do VERY well on both (and I totally got slapped in the 2008/2009 real estate crash so I’m pretty conservative when it comes to real estate across the board an can 100% help you make SMART decisions that don’t wind up causing you stress or ‘buyers regret’ and can really help you weather the financial uncertainty right now).

Let’s put your plan in place… Schedule a call here.


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