It is April-May again and as a property owner, I dread opening my property tax notice. While these property tax estimates seem to be creeping up—or sometimes drastically jumping up—for many property owners, they trigger the yearly dilemma of “To Protest or Not Protest”. As much as we all love our home values to appreciate, nobody likes to pay property taxes especially any more than what we have to, and the increasing property appreciations in the past few years is causing heartache for those homeowners who do not plan to sell anytime soon. Ensuring your tax bill is accurate can save you money in the long run. If you find discrepancies, it’s crucial to understand how the appeals process works.
And be sure to read an interesting article we are sharing at the bottom of this post addressing how state and local entities share education costs and its impact on rising property tax values.
What Drives Property Tax Values
The yearly property tax estimate is determined by two factors: the community’s property tax rate and the county’s appraised value of the property. The community’s property tax rate is set each year by the taxing entities and is a non-negotiable factor in calculating your taxes. The negotiable portion is the appraised value. For tax purposes, the appraisal district usually uses a mass appraisal technique spanning the entire county, appraising market areas, neighborhoods, subdivisions, and large groupings of similar properties all at one time. This appraised value can sometimes be in-line with what has been sold in your neighborhood and/or surrounding areas or can be completely off.
What is an Appraisal Review Board?
The Appraisal Review Board or ARB for short is comprised of citizens who hear the property owner protests. The board has the power to order the appraisal district to make changes. The ARB has the option to either grant your request to adjust the value, refer you to attend a hearing with the ARB, schedule a physical inspection of your property, or deny your request. If you are denied, you have the option of filing a lawsuit against the appraisal district.
The appraisal district is responsible for setting the appraised value; they have nothing to do with the tax rate.
How Do I Begin A Protest Hearing?
Protests must be submitted to the county’s appraisal district in writing. Follow the instructions provided in the appraisal notice to file a protest, be sure to check the deadline for filing your protest, May 15th is the deadline for most appraisal districts in our area. And most counties offer an on-line protest option. The benefit of this option is that appraisal district staffers can immediately consider your protest, sometimes offering a settlement without your attending a hearing.
How to Prepare for the Protest Hearing?
First, find your favorite Realtor and ask them to review your notice. They can help you verify the notice you have received reflects accurate information including that the appraisal is for the correct property including lot size and legal description.
Second, confirm that the appropriate exemptions are reflected in your tax notice including exemptions such as Homestead and Over 65.
Next, your Realtor should be able to provide a comparable market analysis and assist you in determining whether the county’s appraised value of your property is too low, too high, or within an acceptable range. In this analysis, you can expect to receive information that provides a real-time comparison of recent sales for a similar property including size, location, age, and construction. It also provides essential documentation needed if you decide to dispute property value with the appraisal review board through a protest hearing. Once you have filed your dispute the district will assign a day/time for your hearing. Most districts will also provide or give you guidance as what documentation/evidence they require as proof to back your dispute. The following documents are suggested:
Comparable Market Analysis: This report should have been compiled by your realtor prior to your disputing the county’s assessed value of your property.
Documentation of Property’s Condition: Your can hire a reputable home inspector/vendor to help you identify key property conditions that could adversely affect your property valuation including such things as roof or foundation issues. Also, best to take photos and include them in your submitted documentation.
Closing Statement, Recent Appraisals, Engineer’s Report: If you recently purchased your property, present your Closing Documents showing the purchase price, or any appraisal reports, ordered on your behalf by your lender, or any other recent document that could be presented at the hearing that would especially show a discrepancy in the county’s appraised value.
As you are aware, the largest portion of your tax bill goes to School Districts. We are also sharing an eye opening article explaining how sharing of the public education costs between the state and local school districts has had an impact on rising property tax values in Texas. The Reason for Rising Property Taxes May Not Be What You Think
Please feel free to reach out to us if we can assist you in reviewing your property tax notice and preparing a comparable market analysis of your neighborhood.