Excise Tax In Dallas

[Brandon G.]

I just downloaded Brandon Turner's spreadsheet calculator and was going down the list and saw excise tax. For those familiar with the Dallas market, what is the excise tax on the sale or property here? Is it the same 8.25% like regular purchases?

[Paul Ewing]

Originally posted by @Brandon G.:

@Josh James & @Paul Ewing 

Thanks for the heads up. I visited a couple of county sites and see most property taxes are around $3500 or so per year. But I'm not sure if this includes the homestead or not. 

Where can I learn more about this?

Brandon I think showing you and example might help.  Go to this link:

http://www.dallascad.org/AcctDetailRes.aspx?ID=26605500060060000

Which should pull up Smith Joe living at 4446 WIND RIVER LN in Garland.  If not you can search and find it.  Here you can see the legal description you will need when making an offer, the owner's name and address if different than property address, the year it was last evaluated, and some general info about the house and lot.  Note the current Market Value.  That is what you will be paying taxes on if you hold the place past Jan1 of the next year (and make no major improvements).

Scroll down to the table labled "Exemptions (2014 Certified Values)".  Here you will see all of the taxing entities and the exemptions currently on the property.  This is a good example since it has both Homestead and Over 65.  I am guessing they give an exemption for over 65 in Dallas instead of freezing taxes like they do around me.  This looks like it is better.  Anyway, you can see that for each Exemption, a certain dollar amount is taken of the Market Value resulting in a significantly lower Taxable Value for each taxing entity.  The amount of the exemptions varies per taxing entity.

In the next table "Estimated Taxes (2014 Certified Values)" you can see what the taxes are for the year in which you buy.  At least in Wise, Parker, and I believe Tarrant the exemptions on the property as of January 1 will apply for the whole year even if sold.  I am not sure if Dallas does this, but figure they do. A quick call to the Appraisal District will answer that question for you.  Anyway to see what you will pay, just use the Market Value from the top of the page in place of the Taxable Value and multiply it by the Tax Rate per $100 (remember to divide by the Market Value by 100 to avoid heart attack).    If you plan on doing major improvements that will raise the Market Value above what is currently there try with those figures also to see how bad taxes might hurt.

This is mostly for Buy and Hold people, but if you are flipping over the winter it can bite you too especially if it takes several months into the new year to get the sale since you are responsible for the pro rated taxes for the year when you sell.