Why El Paso homeowners could pay more in property taxes even as home value growth slows

EL PASO, Texas (KFOX14/CBS4) — El Paso homeowners could pay more in property taxes this year, even though home values are not rising as quickly as they have in recent years.

The reason comes down to two things: how much a home is valued at for tax purposes and the tax rate set by local governments.

El Paso City Council approved its 2026 to 2027 budget Tuesday and set the city property tax rate at 79.8 cents for every $100 of taxable value.

City officials estimate that the City of El Paso portion of the average homeowner’s tax bill will go up by about $105 a year, or about $8.75 a month.

The final rate was lower than what city leaders first proposed after council members cut nearly $6.5 million from the budget.

The day before, El Paso County commissioners took a different approach.

Commissioners lowered the county’s property tax rate to about 45.1 cents for every $100 of taxable value, down from about 45.9 cents last year.

But the average homeowner could still pay about $40.73 more to the county because the average taxable home value used in the county’s calculation went up from $216,881 to $229,637.

So how can the city raise its rate while the county lowers its rate and homeowners still end up paying more in both cases?

David Stone, deputy chief appraiser with the El Paso Central Appraisal District, said it helps to separate a home’s value from the tax rate.

The appraisal district determines property values. The city, county, school districts and other local governments decide what tax rate to charge. More information is available from EPCAD here.

Stone said those local governments do not tell the appraisal district what property values should be based on how much money they want to collect.

“We’re supposed to appraise all the property at market value, whatever the market is showing us, and it’s up to the tax entities to adjust their tax rates based on the values that we set to get the amount of money that they need,” Stone said.

Home values are still going up, but more slowly

Stone said single-family home values across El Paso County went up about 3.4 percent this year.

About 1.3 percentage points of that increase came from new construction.

For homes that were already built, Stone said values went up about 2.1 percent overall.

That is lower than the increases El Paso has seen in recent years.

Inside the City of El Paso, the average taxable value of a homestead went from $230,581 last year to $232,669 this year.

That is an increase of about $2,100, or less than 1 percent.

Even with that relatively small increase in average taxable value, the city raised its tax rate.

That is why the city estimates the average homeowner will pay about $105 more for the city’s share of the property tax bill.

Why your taxable value can go up even if your home’s market value does not

Stone said another part of the tax system can be confusing for homeowners.

Texas gives homeowners with a homestead exemption some protection against large jumps in their appraised value.

In most cases, the appraised value used for taxes cannot rise by more than 10 percent in one year, not counting certain new improvements.

But that can create a gap between a home’s market value and the value being used for taxes.

Stone gave this example.

Imagine a home is valued at $100,000 for tax purposes.

The next year, the appraisal district determines that the home is worth $120,000 on the market.

Because of the homestead limit, the appraised value may only rise to $110,000 that year.

The homeowner is taxed based on that $110,000 value, not the full $120,000 market value.

But the following year, even if the market value stays at $120,000, the appraised value can continue moving up until it reaches that market value.

“So although my market value is $120,000, my appraised value is only $110,000. That’s what I’m going to get taxed at,” Stone said. “Now in 2027, even if my market value stays $120,000, my appraised value is going to go from $110,000 to $120,000.”

That means a homeowner can see the value used for taxes go up even if the appraisal district did not raise the home’s market value that year.

The Texas Comptroller explains the homestead appraisal limit in more detail here.

Most El Paso County homes saw some increase

Stone said El Paso County has about 247,500 single family homes.

About 70 percent saw an increase in appraised value this year.

But he said roughly half of those increases were tied to homes catching up to a market value that had already been set in an earlier year.

In other words, not every increase means EPCAD believes the home suddenly became more valuable this year.

For some homeowners, the tax value is simply catching up after previous increases were limited by the homestead cap.

Why the county can lower its rate and still collect more from some homeowners

The county vote shows the other side of the equation.

County commissioners lowered the tax rate.

But the average taxable home value used in the county’s calculation increased by nearly 6 percent.

That means the lower rate is being applied to a larger taxable value for many homeowners.

County Budget Director Carmen Arrieta Candelaria said someone whose taxable value did not increase could see a small drop in county taxes.

“But if their values do go up then of course … they’ll pay a little bit more tax,” Arrieta Candelaria said.

For the average home used in the county’s estimate, the county tax bill would be about $1,035.97, or roughly $40.73 more than last year.

The city and county are getting there in different ways

The city and county votes may both result in higher bills for some homeowners, but for different reasons.

The city raised its tax rate while the average taxable value of a city homestead changed very little.

The county lowered its tax rate, but average taxable values increased enough that the average homeowner could still pay more.

For homeowners, that means a lower tax rate does not always mean a lower tax bill.

And a home’s market value staying flat does not always mean the value used for taxes will stay flat.

The $105 increase is only the city’s part of the bill

One important point is that the city’s estimated $105 increase does not mean every El Paso homeowner’s total property tax bill will rise by exactly $105.

That figure only covers the City of El Paso portion of the bill for the average homestead.

The county’s estimated increase is also only for the county portion.

Homeowners also pay taxes to other local entities, including school districts and other taxing authorities.

Each one sets its own rate.

The final bill will depend on the property’s taxable value, exemptions, and which taxing entities apply to that home.

For homeowners trying to understand why their bill changed, the simplest way to look at it is this:

First, check whether the taxable value of your home went up.

Then check whether the tax rate set by each local government went up or down.

Both numbers help determine what you ultimately pay.

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