May 7, 2024 - The last several years, Shelby County has experienced increased growth regarding real estate values. Every two years, the State of Texas’ Comptroller’s office, through its Property Tax Division, conducts their Property Value Study. The most recent study conducted was this past year, 2023. What this means is, the State Appraisers will take a random sample of properties within a school district; and then through reported sales and their field appraisals, they determine whether the Appraisal District is valuing properties at 100% market value, according to state law.
The 2023 Property Value Study (PVS) determined that the Shelby County Appraisal District (Shelby CAD) did not value those sampled properties at 100% market value. Through this study, it was determined that 5 out of 6 schools were outside the confidence interval (or not within 95% - 105% of their determined Market Value). The appraisal districts were created to ensure equitable value for school districts statewide. So, when the state determines the local appraisal district is undervaluing properties, it affects the amount of state funding the local school districts receive.
Shelby CAD continues to receive returned mail on less than 2% of the optional sales letters that are mailed out to both the buyers and sellers of all deeded real estate transactions. In previous years, Shelby CAD received multiple listing sales data from our local board of realtors, which helped to maintain the state mandate of 100% of Market Value; however, in 2015, that access was no longer granted by the local board. The state comptroller still receives sales information that they use in their property value study. It is only when a school district has failed the PVS will the Shelby CAD office have access to those sales and their data.
The state property value study is conducted every two years unless a school district fails the study and then PVS is performed each year until the school district passes. Shelby CAD passed the 2019 study for 5 out of 6 school districts but within 2 years (2021) it was determined that our valuations were too low and 5 out of 6 were outside of what the state considers its confidence interval and now, once again, in 2023.
What this means to Shelby County property owners for the year 2024 is that most residential owners and some commercial property owners will see an increase in their valuations.
Please remember that in the fall of 2023, Texas voters, voted to increase the Homestead exemption portion of the School Tax to be increased from $40,000 to $100,000. In addition to the increased homestead, a Non-Homestead Cap (or Circuit Breaker) of 20% for real properties, up to $5,000,000 in value, will be added. What this means for you, is that the taxable value of a non-Homesteaded property will NOT incur an increase of more than 20% over last year. The Market Value of a property may increase, but the taxable portion will be capped at 20%, for non-Homesteaded properties. There continues to be a 10% Homestead Cap, which will limit the 2024 taxable value increase from the previous year, for those receiving homestead exemptions. The Market Value may increase more than 10%, however your taxable value will not increase more than 10% over last year. There are some exceptions, like adding new structures, square footage, or an ownership change that can affect that cap limit.
There has always been a longstanding adage concerning property appraisals. We all want our property to be appraised at the highest possible value for a bank loan and the lowest possible value for tax appraisals. At this point in time the state is telling us there is too big a difference in those appraisals. Please feel free to contact the office if you have any questions at 724 Shelbyville Street Center, Texas or (936) 598-6171.
