4 ways you can help property owners save on taxes

According to Teaxas Association of Realtors

4 ways you can help property owners save on taxes

04/11/2014 | Author: Editorial Staff

Your role helping clients save money doesn’t have to end when they close on the purchase of property. You can also help them save potentially thousands of dollars every year for as long as they own that property with open-space valuations that lower their property taxes, such as agricultural use or wildlife-management use.

“Everyone in Texas knows that properties that have open-space valuations are much more marketable than ones that don’t,” said Cassie Gresham, an attorney with Braun & Gresham, during TAR’s recent webinar “What every broker should know about open-space valuations.”

Gresham has helped hundreds of landowners and brokers address property-tax issues and qualify for open-space valuations on their properties. She says there are four things Texas REALTORS® should encourage clients to do when buying or selling land in Texas:

Circle May 1 on your calendar
Open-space valuation applications are due to your local central appraisal district by May 1. Gresham says you should make sure new owners know they need to reapply for the valuation by May 1 of each year. If they miss this deadline, they may lose their valuation and have to pay taxes on the property’s full market value.

Ask to see the history
Gresham recommends that buyers include a request to see proof of a property’s ag history as part of their offer. “Your buyers need to ask the seller what they’ve been doing to keep this ag valuation in place and ask to see documentation because when they’re reapplying for the valuation in their own name, they may not have access to that information in the future.”

Watch your market value
“Even if you’re only paying the ag rate, if you’re market value is going from $250,000 to a million, and for some reason you lose your ag valuation on the property, you’re going to pay rollback taxes on the difference between the market value and what you actually paid on the ag value,” Gresham says. She recommends that landowners monitor their market value every year and then protest it to avoid this situation.

Review your Notice of Appraised Value
Gresham says owners of rural land should proactively review their notices of appraised value. “A little-known fact is that the appraisal district can remove your ag valuation on the Notice of Appraised Value and that can count as your notice. They don’t have to send you a separate notice or a letter saying ‘We’ve removed your ag valuation.’ And if you don’t protest it, then it stays in place.”