City Council Raises Taxes, for an Added Cost of About $400 Per Austin Home

The Austin City Council voted Thursday to hike the property tax rate from $0.4431 per $100 valuation to $0.5335, which will raise the average tax bill by over $400.

Because the rate exceeds a state cap, voters will be asked on the November ballot whether they approve of the increase.

The bulk of the tax hike, but not all, will go toward paying for Project Connect, a mass transit plan involving new light rail lines, which proponents argue is needed due to bad traffic in the city.

In a legally required notice on its website, the city government stated, “The City of Austin adopted a tax rate that will raise more taxes for maintenance and operations than last year’s tax rate. The tax rate will effectively be raised by 30.6 percent and will raise taxes for maintenance and operations on a $100,000 home by approximately $98.70.”

The city estimated the “tax on average homestead” to increase by $423.53 under the new rate, not including tax hikes made by other jurisdictions, such as Travis County.

That estimate is based on an average homestead taxable value of $401,644 for 2020, according to a city tax rate notice August 2.

Monthly sales published by the Austin Board of Realtors roughly matches that amount; the median home price in Austin was $407,000 in June. (Sales values may differ from appraised values. The city relies on appraisals from the Travis County Central Appraisal District).

After Thursday’s council vote, the city’s public information office downplayed the impact of the tax hike, saying in a press statement that the bill for the “typical homeowner — defined as the owner of a median-valued ($326,368) non-senior home — would be $1,741.17 per year or $145.10 per month.”

“This would be an increase of $332.39 per year or $27.70 per month.”

That calculation takes into account an $88,000 tax exemption applicable to persons 65 years and older. Austin also offers certain property exemptions for disabled veterans, disabled persons, and a standard 10% exemption for those who actually live in their home (“residence homestead”), rather than using it as a second home or investment property.

Austin’s new tax hike is broken down into two components. The first is an increase of $0.0904 per $100 taxable value for standard city operations. That’s within the state’s 3.5% cap above “the no-new-revenue rate” that triggers an election.

But the second and larger increase is what triggers the tax election. It’s a completely new tax to fund Project Connect, the mass transit plan. That adds 8.75 cents per $100 valuation.

Stay tuned for additional coverage of the city’s budget and spending.

Originally published at https://www.honestaustin.com on August 14, 2020.

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Honest Austin

Original reporting on local Austin news, Texas politics, and the economy. honestaustin.com