{"id":2126,"date":"2021-04-18T12:36:38","date_gmt":"2021-04-18T17:36:38","guid":{"rendered":"http:\/\/truthinaddison.com\/?page_id=2126"},"modified":"2021-04-18T12:38:01","modified_gmt":"2021-04-18T17:38:01","slug":"lets-talk-truth-about-addison-taxes-and-tax-rates","status":"publish","type":"page","link":"http:\/\/truthinaddison.com\/?page_id=2126","title":{"rendered":"Let\u2019s Talk TRUTH About Addison Taxes and Tax Rates"},"content":{"rendered":"\n

Let\u2019s Talk TRUTH About
Addison Taxes and Tax Rates
By Susan M. Halpern
Former Addison Councilmember (1992-1999)<\/strong><\/p>\n\n\n\n

The 2021 election season once again features negative candidates misrepresenting the issue of Addison\u2019s property taxes. This misinformation includes the claim that Addison has the second highest tax rate in Dallas County, which is patently false. So, let\u2019s talk TRUTH about Addison\u2019s tax rate and property taxes, and how they compare to other municipalities in Dallas County.<\/p>\n\n\n\n

Start here. The TRUTH is that Addison\u2019s tax rate is actually 19th<\/sup> amongst the 31 municipalities in Dallas County. That is, 18 municipalities \u2013 58% \u2013 have a higher tax rate than Addison.<\/p>\n\n\n\n

But the tax rate is only part of the equation. Property taxes are a function of two figures: taxable property value and the tax rate. You cannot talk about one without the other. And, taxable value is often less than appraised value, because it can be reduced by exemptions. The most common example is the homestead exemption that is available to homeowners who reside in their homes (as opposed to homes used as rental properties). The homestead exemption reduces the value to which the tax rate is applied. Let\u2019s do some math to illustrate the point.<\/p>\n\n\n\n

Suppose we have a tax rate of 50 cents per hundred dollars of value and a home worth $300,000. With no other considerations, total taxes are $1,500.00 (($300,000 x .5) \u00f7 100). But, if we now apply Addison\u2019s 20% homestead exemption to the value of our hypothetical home, our taxes go down. This is because the homestead exemption reduces the TAXABLE value of our hypothetical home by $60,000. To no one\u2019s surprise, the tax bill is lower: (($240,000 x .5) \u00f7 100), or $1,200.00.<\/p>\n\n\n\n

Next, let\u2019s compare our $1,200.00 tax bill to a hypothetical neighboring community with a lower tax rate (.45) but no homestead exemption. Despite the lower rate, taxes are actually higher (($300,000 x .45) \u00f7 100) = $1,350.00. This is because the lower rate has been applied to a higher TAXABLE value for the home.<\/p>\n\n\n\n

You can easily see why talking only about tax rates is disingenuous and outright deceptive. We must also consider TAXABLE value, because both components impact the taxes property owners actually pay. In turn, TAXABLE value depends on what exemptions a municipality allows. And that, in turn varies more than you might think.<\/p>\n\n\n\n

Let\u2019s focus on the homestead exemption for purposes of our discussion. In Dallas County, only 8 of 31 municipalities (including Addison) allow a 20% homestead exemption. 10 municipalities allow 10% or less, and the other 13 have no homestead exemption at all. Given these differences, comparing tax rates is an apples-to-oranges comparison. It doesn\u2019t work.<\/p>\n\n\n\n

To confirm this point, let\u2019s compare Coppell and Addison, using our hypothetical $300,000 home. Coppell (.58) has a lower tax rate than Addison (.608676), but Coppell only allows a 5% exemption for homesteads. This means that Addison\u2019s tax rate is applied to a TAXABLE value of $240,000, whereas Coppell\u2019s (lower) tax rate is applied to a TAXABLE value of $285,000. Here are the tax bills:<\/p>\n\n\n\n