In the year that you purchase your home the points that you pay can be claimed as an itemized deduction on your federal tax return. The term points is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. The points charged for the mortgage is identified on your settlement statement or HUD-1.

Mortgage interest, property taxes, and the municipal utility district (MUD) taxes can all be claimed as itemized deductions on your federal tax return. In order for the property and MUD taxes to be deductible, the tax must be charged to you and must have been paid during your tax year.

If you closed on a mortgage in 2007, you will also be able to deduct the private mortgage insurance (PMI) from your taxes. This deduction is currently only in place for 2007. Congress would have to renew the deduction for 2008. There are income level limits on the deduction. If your adjusted gross income is $100,000 or less, you are eligible for the entire deduction. If your adjusted gross income is over $110,000, you are not eligible for the deduction at all. Lastly if you take the standard deduction none of these deductions apply. You have to be able to itemize your deductions to gain the tax benefit.

Components of the Spring Texas Property Tax

Since Texas does not have a state income tax, it pays for its schools, roads, infrastructure, and social services through its property taxes. The 'typical' residential property owner in Spring TX is subject to a property tax assessment from some or all of the following entities - school district, City of Houston or County, county hospital district, county department of education, county flood control, emergency service district - fire, emergency service district - ambulance, junior-college district, Port of Houston Authority, and a Municipal Utility District (MUD). MUDs are political entities which provide water and sewer services to the majority of residential and commercial property owners who do not receive those services from the City of Houston.

The total combined tax bill from all of these entities is $2.50 to as high as $4.20 per $100 of assessed value. For a home with an assessed value of $100,000, the property tax burden before homestead, over 65, or disablility exemption would range from $2,500 to $4,200 a year. The school district and the MUD taxes combined represent 50% to 80% of the total property tax burden.

Don't Miss the Homestead Exemption Deadline

Another way you can reduce the property taxes on your Spring Texas home is to file for your homestead exemption. The homestead exemption removes part of the assessed value of your property from taxation and thus lowers your taxes. The assessed value of your property is the value placed on your property by the County for the purposes of determining your local property taxes. In order to qualify for the exemption you must own your home on January 1 of the tax year and you must use the home as your primary residence. Receiving a homestead exemption is not automatic. You must complete and mail the application by April 30th of the tax year to receive the exemption for that year. In other words to receive the homestead exemption for 2007, you must apply by April 30th of 2007. The Harris County and Montgomery County homestead exemption forms can be downloaded.

If you are 65 or older or disabled, you may be eligible for additional exemptions. Follow this link to check out exemptions, discounts, and rates for a partiuclar taxing entity.

Protest Your Assessment

You have just received your annual assessment of the value of your property from the county and you are thrilled because the assessment is $30,000 more than it was last year. Not so fast. The $30,000 increase in your assessment means you get to pay more taxes this year. You want to pay your fair share of taxes but only your fair share of taxes. You need to ask yourself if you put your property on the market would it sell for the assessed value? Also the Texas Constitution provides that all taxation must be equal and uniform. Equality and uniformity means that no one person or class of persons should pay a higher rate of tax on the same value than do other persons. If you believe your property is assessed higher than equal properties, you can protest your assessment.

When you receive your assessment in the mail review it carefully. There are defined dates by which you have to file your protest. If you believe the assessment is over market value or the value is unequal compared with other properties, give a Realtor a call. Realtors can access the local MLS and help you analysis the market value by researching recent similiar sold properties. Don't be frighten that it inhibits you from protesting your assessment. It is your right as a Texan to receive equal and uniform taxation.

8817 Louetta Rd. Spring Texas 77379 | Direct: 281.804.8626 or 281.300.3141 | Email: jwente@garygreene.com