Home assessed value - will it go up after the sale?

Question

I am planning on buying a home which has a much lower assesed value than what I am planning to pay for it. The appraisal however is greater than the selling price by about 5k. I am worried that the taxes are going to go up after the sale because someone told me that after a sale is made the assessed value is matched up to the sale price. This is Travis county in Austin Texas. Any insight would be most appreciated - thank you for your time!

Answer 1

That's exactly what will happen. It's standard practice in TX.

TX state law requires that the assessed value for tax purposes equals the fair market value of the property. Valuations are adjusted annually using statistical analysis and about every 5 years or so with a more formal appraisal process. Appraisal is more art than science and errors do creep into the system over time. The best valuation of a property is what it sells for in an arms-length transaction so virtually every appraisal district in TX will adjust the assessed value to the most recent sales price when a property changes hands.

To more accurately estimate what your taxes will be, divide the current taxes by the assessed value and apply that percentage to the sales price. You'll be within pocket change of your tax bill next year.