Property Value Increases Cause Tax Spike in Montgomery County, Texas

Citizens of Conroe, Texas and those who live within the Montgomery County Appraisal District recently saw their property taxes spike as there was a significant jump in values with 29.8% average market value increase in Montgomery County from 2021 as reported in Community Impact. Values of Montgomery ISD homes were up +34.3%, while homes in Conroe ISD were up 27.4%.


Reasons for the increase

The large demand for homes in Texas combined with low inventory was a major factor in the dramatic increase in the market value of residential property, causing appraised values to rise. When homes begin selling well above asking price, the market values increase accordingly. While the housing market is showing signs of slowing down, people will still feel the pinch when their property taxes are due this fall and Montgomery County residents are not alone. As the Conroe Courier reported, some areas of the state have seen values increase 50%. Nearby, Grimes County is up 33%, Harris County 21% and Ft. Bend County 31%.

Many homeowners filed appeals with the Montgomery County Appraisal District (MCAD) before the deadline last May. Despite no guarantee of getting appraised values reduced, there has been a sharp increase in the number of homeowners and business owners filing tax protests with data showing the number of protests filed increased about 55% in Montgomery County and 114% in Harris County from 2015-21 as cited by Community Impact.

Exemptions and lowered municipal and school taxes offer some help

Two statewide propositions that voters approved in May will help some but not all. The first allows school taxes to decrease for those who are disabled or over 65 rather than being frozen at age 65. The second proposition increased the homestead exemption for school taxes from $25,000 to $40,000 off the appraised value.

Recognizing the increase in property values, the City of Conroe voted in April to increase its homestead exemption from 2.5% to 20%, the maximum allowed by law. They also increased the city’s exemption amount for those who are disabled and over 65. Likewise, the City of Montgomery also approved a 20% homestead exemption in July 2021, taking effect this year.

Montgomery County leaders also recognize the dramatic increase in property values and has proposed to stay with their trend of reduced tax rates to compensate. Community Impact reported that the county has been reducing their tax rate annually since 2019 and have recently proposed a rate of $0.3764% per $100 of valuation. While the rate is still a decrease, it is above the county’ no-new-revenue rate and there will be a public hearing at 9:30 AM on August 26, 2022 when the budget will also be adopted.

The Conroe ISD board of trustees approved the district’s $619.83 million budget and tax rate of $1.1146 per $100 assessment for 2022-23 (a $0.06 decrease from the past year) at its regular meeting on August 16, 2022 representing an overall 3.98% increase in the budget from the 2021-2022 budget as reported here.

The Magnolia ISD board of trustees approved a proposed tax rate of $1.1472 per $100 valuation for 2022-23, a $0.04 decrease from the previous fiscal year, at an August 8, 2022 meeting. This tax decrease follows a nearly $0.09 decrease from 2021-22 for a total of a $0.13 tax rate decrease proposed in two years. There will be a public hearing on the proposed 2022-23 budget and tax rate on August 22, 2022mo at 6:30 p.m. at the Magnolia Event Center.

Montgomery ISD’s total tax rate is currently $1.26 per $100 of assessed value. With voter approval of the district’s $326.7 million bond proposal in the May 2022 election, the rate is anticipated to increase by less than a penny to $1.267, once all bonds are sold. However, under state property tax compression law, Montgomery ISD anticipates that the tax rate will be reduced this fall by approximately three cents to $1.23 due to the recent increase in assessed property values.

Businesses Saw Their Property Values Increase Too

Montgomery Self Storage is locally owned and operated and like our friends and neighbors, saw a large increase in the property values of all seven of our properties. While not an easy thing to absorb, we remain positive about the growth and opportunity in the area and will continue moving forward with the expansion projects planned as several of our locations.