El Paso homeowners are receiving notifications this week of their new property tax valuations, with many seeing increases in the tens of thousands of dollars for the second consecutive year.

The rise in home valuations will mean huge property tax increases for most El Paso homeowners, unless local government entities substantially reduce tax rates. Last year, most El Paso government entities kept tax rates flat or lowered them slightly, resulting in sharp tax increases for most homeowners.

Residential property values increased by almost 18% between 2021 and 2022, though that figure will go down as protests are heard, said David Stone, assistant chief appraiser for the El Paso Central Appraisal District. That follows a 12% increase last year.

The property tax valuation of multi-family housing units — such as apartment buildings — increased by 41% in the past year after a 5% increase a year earlier, Stone said. Other commercial properties increased in valuation by 16%, following a 1% decrease the prior year. Those percentages can all go down through the protest process.

Rising property tax bills impact renters as well as homeowners, because landlords often pass on tax increases in the rent.

9 things you should do if you plan to protest your property tax valuation

The El Paso CAD usually does mass reappraisals every three years, but has now gone through the process in two consecutive years. 

“Reappraisals are required at least every three years, but appraisal districts are still required to maintain property at 100% of market value. The real estate market is rapidly appreciating in El Paso County. When the market is showing large increases, we must increase values, even if it hasn’t been three years since the last reappraisal,” Stone said.

Sara Priddy and her husband purchased a “complete fixer upper” Manhattan Heights home in July 2021 for $485,000. She received a notice from El Paso CAD on Monday that her home was being valued for tax purposes at $742,888, a 68% increase over its 2021 tax valuation.

“I’m not even angry. I’m a little irritated because I’m going to have to go deal with it. But it’s so off, I’m confident it won’t stay that way,” said Priddy, an attorney who ran unsuccessfully for the County Court at Law No. 2 judgeship in the March 1 Democratic primary.

Priddy described her 7,200-square-foot home built in 1915 as “a hot mess. There’s no way anyone would pay more than $500,000 for it.”

Texas law provides some protection for homeowners from sharply rising property valuations. Taxable valuations cannot rise more than 10% in a single year. But many El Paso homeowners who have seen double-digit percentage increases in their home values each of the past two years may now be facing years of 10% annual increases in valuations.

How valuations, property taxes work

Appraisal districts are required by Texas law to set property valuations at 100% of market rates. The El Paso CAD uses a mass reappraisal process that uses recent sales prices of nearby homes to set values, rather than individually appraising each property in the county.

The combination of high demand for houses and a low inventory for potential buyers during the COVID-19 pandemic has led to escalating home prices in Texas and much of the country. The average home sales price in El Paso has increased by 25% since 2019, according to the Texas Real Estate Research Center at Texas A&M University.

Rising home values don’t automatically lead to higher property tax bills. Texas law is structured to encourage governments to lower tax rates as valuations rise. 

But an El Paso Matters analysis last year found that a combination of increased property valuation and higher tax rates has driven up the property tax bill on average-value homes by hundreds of dollars over the prior decade, even when adjusted for inflation. 

What you can do

Most El Paso homeowners pay property taxes to five entities: a school district, the city government, the county government, University Medical Center and El Paso Community College. 

Elected officials — the City Council, County Commissioners Court, school boards and the EPCC board — will set tax rates this summer. The tax rate adoption process includes opportunities for El Pasoans to provide input on tax rates.

The El Paso Matter analysis last year found that the main driver of rising property tax bills since 2012 has been the city of El Paso. Depending on the school district, the city’s increasing taxation has been responsible for half to almost two-thirds of the total tax increase for average value homes.

Homeowners can challenge their valuations until May 16. People protesting the valuation can provide evidence of why their valuations are too high, such as recent sales prices in their neighborhoods, or problems with their home that would lower the value.

The protest process can be started by calling El Paso CAD at 915-780-2131 or emailing admin@epcad.org. Protests also can be filed at the El Paso Central Appraisal District office at 5801 Trowbridge Drive.

This story has been updated to include additional information from the El Paso Central Appraisal District.