Property taxes for many Waco homeowners are skyrocketing. This is largely due to home appraisals in some parts of Waco increasing dramatically. In this environment, local city, county, and school officials should be reducing property tax rates aggressively to offset higher property values.
According to state law, a homeowner’s property appraisal value cannot increase more than 10 percent in a single year. While this will spare these homeowners from a dramatic increase in the short term, their tax bills will nevertheless increase by 10 percent annually until their tax bill matches the appraiser’s value.
These dramatic appraisal increases are being attributed to the red-hot Waco housing market. In 2016, Waco-area zip codes were the most searched for in the United States, largely due to the massive success of Chip and Joanna Gaines’ HGTV show Fixer Upper.
For this reason, homeowners across Waco are seeing their home appraisals, and therefore their property taxes, increase. In Waco, the average home appraisal increased by 14 percent last year.
It is unlikely this will get better any time soon. Waco is growing at an astonishing rate, and is set to continue doing so. According to The Perryman Group, Waco will outpace the nation in economic growth for the next five years. This growth will continue to drive home values up, due to low housing inventories in the area and construction levels incapable of keeping up with the housing demand.
As of April of this year, Waco’s housing inventory stood at 2.7, meaning it would take less than three months for the current inventory to dry up. This limited supply, combined with high demand, caused the median home sale price for the month of April to increase to $196,662, the highest on record.
If city, county, and public school tax rates remain flat this year, as they often do, property owners will see their property tax bills continue to skyrocket.
Despite this growth, McLennan County has not made any significant cut to property tax rates. From 2017 to 2018, property taxes decreased by only 2 cents per $100 of property value. Meanwhile, county tax revenue increased by $473,326 – up .63 percent from last year.
Given this, one is led to wonder whether McLennan County officials care more about their constituents, or increasing the size of government?