Question on property tax raises & reassessments

[Heather H.]

Hi All,

I am offering on my first San Antonio property, which is an SFR. I've had a hard time finding deals that cash flow positively because the property taxes in Texas are comparatively high.

The reason that this one works is because the assessed taxable value is low compared to many other properties I have evaluated, and even compared to comparable houses in the same neighborhood. For example, the yearly tax is $2000 less than a nearby comp with slightly higher square footage, and $1000 less than a close comp of equivalent square footage. That makes a big difference!

Can anyone tell me why this is, and how often the taxable value of property is reassessed in San Antonio?

I'm concerned that the taxable value will be reassessed (especially when I make improvements to the property), which would make the cash flow negative.

Has this happened to anyone, or do you have experience with this sort of situation?

I would really appreciate your thoughts! Thanks!

[Nick Disney]

Hey @Heather H. I would first double check and make sure that there are not any exemptions being claimed for the property. Go to http://www.bcad.org/clientdb/?cid=1 -- Search for your property, scroll down, click on taxing jurisdiction. At the bottom of that section it will show the annual taxes w/ current exemptions and taxes w/o current exemptions. You will probably not qualify for whatever exemption is currently with the property so you will need to factor the higher price in to your numbers.

The other thing I would keep an eye out for is there are several areas in San Antonio where if you move 1 or 2 streets over the values change dramatically, i.e. into a historic district. It can be really hard to tell unless you are familiar with the area. Something like this could cause the difference between your comps.

Property taxes are assessed annually in San Antonio.

Hope this helps. Have a great day!