Investment home/Property tax - Texas

[Sam Raj]

Sorry for posting this again here. I did not post it in the right section the first time and I do not see a way to edit the original post and move it to the Austin real estate forum (which is more appropriate for me).

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Hey All,

This is such a great forum. I am glad to have come across it!

We are in the process of buying an investment home. Property tax is pretty high at 2.7-2.8% (from what I see) in the areas we are looking for (This is Texas!!).

How does the property tax work for investment homes in Texas/Austin area (when they are not your primary residence/and you cannot claim homestead exemption)?

I can see that for 2021, the house we want to consider is assessed only at around $320K and the tax bill is around $9000. If we decide to put in an offer, a successful bid may end up being in the 420k price range.

For next year's (2022) property tax assessment, can I assume the county will not stick to a max 10% cap on the assessment (320k+32k) since this is an investment home and instead it can be at the minimum, my purchase price or more? If they come up with a very high number, would I be able to contest it based on proof of my purchase price or is the assessment strictly governed by comp.sales in the area?

Are there any rules at all on how further they can go with property taxes on investment/non-primary residence homes?

I am trying to do the math and property tax is a huge component. So any guidance will be helpful!

Thanks!

SR