Understanding “Land Value” and What it Means for Your Property Taxes

understanding land values

It’s that time of year again: property tax appraisal notices are making their way to mailboxes everywhere. Property owners, meanwhile, are reacting with various levels of shock and bewilderment. This makes sense, given that property valuations and property taxes in Texas can feel baffling.

Fortunately, it’s not too late to do something about your property taxes. Texas law states that property owners have thirty days after the arrival of their property tax notices to file a protest.

Here at Paramount Property Analysts, we have an entire division devoted to property tax consulting. Our primary goal is to save property owners money, and we’re here to help you.

Here’s what you need to know.

What is Land Value?

What is the definition of land value, as it relates to property tax? To put it simply, land value is an estimate of value based on the potential sale value of the land and nothing else.

In other words, land value is the value of your land alone, without the addition of your home, outbuildings, fencing, or other structures. Essentially, tax professionals are attempting to value your property as if it were vacant.

They want to know what the land could fetch were it to be put to its best possible use, and become the location of a new single-family home or commercial structure. They value your property by looking at nearby sales of lots that would be competitive. Whether or not your property has a building on it already is irrelevant to this particular number.

The structural value, meanwhile, is the value of your home or other outbuildings, and how much each could fetch on the market.

To figure out what you owe for tax purposes, the property appraisal system combines the two – land and structure – to ascertain your value.

That seems simple enough. What many landowners don’t understand about land value, though, is why numbers can be so fickle and can leap upwards within a year.

Each year, land and or structural values can rise, independently of one another. This can make the total property tax appraisal go up, which ultimately increases the total property tax bill.

How Paramount Property Analysts can Help

If your property taxes have increased this year, you still have time to file a tax appraisal protest. The deadline is approaching quickly, though, and now is the time to act.

Filing a protest can save you money, but you’ll need professional assistance to make the most of the process. The tax system is complex, and it’s easy to miss certain loopholes that could save you thousands.

Paramount Property Analysts’s property tax consulting division can help you understand your options and lower your bill this year. Contact us today to get started.