Recently, Lubbock homeowners received their property tax appraisal notices and many were surprised to discover their property’s new appraised value. The Lubbock Central Appraisal District reported the average appraisal increased by 16% in 2022. Homeowners now have the decision to protest this increase or accept the new value. Understanding the difference between appraised value and assessed value will help homeowners make that decision.

The appraised value (what the property is worth) is the value of the property set by the market and is determined by sales in your neighborhood from the previous year.

The assessed value is the property’s appraised value less any applicable exemptions, such as a homestead tax exemption.  Assuming a homeowner has a homestead tax exemption (where the home is considered their primary residence), the potential tax increase is capped at a 10% increase per year. When a large increase occurs in one year, the homestead cap spreads the increase out over multiple years so the owner is not paying one large sum in one year. The exemption also provides a $25,000 reduction on the taxable value for school taxes.

Homestead Exemption

See below how a property’s taxable value for the school district went from $299,945 to $274,945

Entity               Exemption  Amount  Tax Value
City of LBK                                                  $299,945
LBK County                                                 $299,945
Hospital                                                         $299,945
LBK ISD            HS                $25,000    $274,945
Water                                                              $299,945

A common misconception is the appraised value can only go up a max of 10% per year. The appraised value has no limit. The homestead exemption places a cap on the taxable value. If a property value increases over 10%, the difference in value will be waiting for the next year, assuming the appraised value does not change. With the large increases, some properties will experience 10% increases for several years in a row. The homestead cap loss is the difference in value between the appraised value and assessed value. In other words, it is the amount waiting for the next year on top of any other increase experienced because of recent sales.

Property Tax Appraisals

In the example below, the 2021 value was $265,936. The appraised value is $299,945. With the homestead exemption, the 10% cap places the assessed value at $292,530. The homestead cap loss is the difference between the appraised value and the assessed value. In this example, the difference of $7,415 will be applied the next year plus any additional tax increase that may occur when the 2023 appraised value is calculated.

2022 Value Information

Improvement Homesite Value            $266,645
Improvement Non-Homesite Value                 $0
Total Improvement Market Value    $266,645

Land Homesite Value                                  $33,000
Land Non-Homesite Value                                   $0
Land Agricultural Market Value                        $0
                                  Land Market Value     $33,000

Total Market Value                                     $299,945
Agricultural Use                                                          $0
Timber Use                                                                     $0
                       Total Appraised Value     $299,945
Homestead Cap Loss                                    -$7,415
                          Total Assessed Value    $292,530

In the event the appraisal needs to be protested, the Lubbock Central Appraisal District provides information on the protest process with the property appraisal notice. Property tax consultants are also available to assist with the protest for a small fee. One local company, Ace of Texas, has been assisting Lubbock property owners since 2014. For more information on their services visit aceoftexas.com.