The Lone Star State, what a huge, vast and beautiful state Texas is? One of the perks of living in Texas is the nonexistent state income tax. Many people researching to move to Texas find this as quite an attractive and financially advantageous for their family. Property taxes, also known as ad valorem, are locally governed and replace other state’s income taxes. Fortunately, in North Texas, areas with financially solid retail presence and sales assist those cities to attempt to maintain their low tax assessments.
Let’s take a look at how property taxes work here in North Texas especially in attractive cities such as Prosper. Generally, the property taxes are based on the assessed value of the property. What makes Prosper one of North Texas’ most appealing place to relocate to is the affordability of homes as a result of the low property taxes.
Prosper Texas Total Tax
The total tax rate of any City or Town in the Great State of Texas is subdivided into 3 categories.
• County Taxes (Denton 0.225574 or Collin County 0.180785)
• City Taxes (0.52%)
• School District Taxes (Prosper ISD 1.67)
These three categories are determined and added together to find the final tax rate multiplier for your area. However, if you are located in Collin County you would also have to pay an additional tax for the Community College tax rate (0.081222%).
To establish the tax rate in any city or town in Texas you would:
Add all 3 of the subcategories above together
County Tax rate+ City Tax rate+ School District Tax Rate+ any special taxes= Total Tax Rate Percentage (%)
Total Tax Rate Percentage (%) x County Assessed Value of Property= Total Property Taxes
The Town of Prosper property tax rate is $0.52 per $100 taxable value. Of this amount, $0.1525 is applied to Debt Service, and $0.3675 is applied to Maintenance and Operations.
Currently Prosper’s Taxes are broken down as follow:
(0.225574% + 0.52% + 1.67%) = 2.42% x assessed home value = $Total tax per year
Example: 2.42% x $520,000= $12,584 per year
(0.180785% + 0.52% + 1.67%+ 0.081222(community college tax)) = 2.45% x assessed home value = $Total tax per year
Example 2.45% x $520,000 = $12,740 per year
The County Appraisal district determines the assessed value of the home.
However, there are some exemptions homeowner can file for relief on property taxes.
A residential Homestead Exemption removes part of the value from the appraised value of your property and lowers your property taxes. Available to all homeowners on their residence as long as they lived there on January 1 of the tax year.
Over Age 65 Exemption: The year that you turn 65 you may receive the Over Age 65 Exemption in addition to the Homestead Exemption. The amount of the exemptions that are granted by each entity is subtracted from the appraised value of your residence.
Disabled Person Exemption: Can be taken in addition to the Homestead Exemption, available to those who qualify according to specific guidelines.
Freeze/Tax Ceiling: If you apply for an Over Age 65 Exemption or a Disabled Person Exemption for school taxes, the school taxes on that home cannot increase as long as you own and live in that home. If the homeowner improves the home, the tax ceiling is adjusted for the improvement.