Property taxes in Texas are one of the biggest expenses faced by homeowners. A fair and correct property appraisal is crucial in determining whether you are paying the right amount of ad valorem taxes. Consequently, it is important that if you do not agree with the appraised value of your home, you file a protest with your Central Appraisal District.
Between April and May each year, a Notice of Appraised Value is sent to every Texas property owner detailing the assessed value of their home. The assessed value is used in conjunction with the current tax rate to determine how much you will be liable for in annual property taxes. If you disagree with the values presented to you or any actions taken by the appraisal district in regard to your property, it is the right of every Texas property owner to file a protest.
These property tax protests are filed with the Central Appraisal District and typically include an informal meeting with staff and potentially a formal hearing before the Appraisal Review Board (ARB). If an ARB hearing is required, once the ARB decides on the value, should you disagree with the findings, you can appeal the decision to the state court in your county.
If you have decided to protest your property tax appraisal, here are some of the best practices for protesting property taxes in Texas.
Property taxes bills are mailed out in October each year. Therefore, correcting discrepancies with appraisals must be handled well before this date. After Notices of Appraised Value are sent out in April, property owners have until May 15 to file their protest (or 30 days after receiving the notice).
A property tax protest for residence homestead properties can only be filed late under the following circumstances:
A failure to receive a notice can be filed if the appraisal district did not mail out your annual property appraisal. However, this protest must be filed before the delinquency date, and you cannot let your taxes become delinquent.
A motion of correction can be filed if the appraised value of your residence homestead property is at least one-fourth higher than its correct appraised value. Under this circumstance, property owners are still required to pay property taxes on the portion of the property value not in dispute. This payment must also be made before the delinquency date. It is important to note that the appraisal roll cannot be corrected if the property was subject to a property value protest for that tax year.
You may file a motion for the correction of a clerical error, multiple appraisals (including a property on the appraisal roll that should not have been included), or an error of ownership. This type of late hearing can include the current year and the five previous tax years.
Property owners may ask the chief appraiser for a joint motion to correct. If both parties agree to the late change, then the appraisal review board will approve the change.
Other than in the above-mentioned circumstances, any protests filed after May 15 (or 30 days after the delivery of the notice) will not be accepted by the Central Appraisal District. If you have a problem with your notice of appraised value, filing your protest as soon as possible after the notice is received is good practice to make sure you do not miss the deadline.
After a property owner files a protest on the appraised value of their property, they will be sent a written notice detailing the time, place, and subject matter of both an informal and formal hearing.
Informal hearings see property owners present their cases to the appraisal district staff in order to explain and prove why their initial appraisal was incorrect. In many cases, an adjustment to the property valuation is achieved in the informal hearing; therefore, there will be no need for formal proceedings. A formal hearing will take place if no conclusion can be reached at the informal hearing.
Property owners and appraisers will appear before a three-member review panel that was selected to hear the appeal in a formal hearing. ARB will then determine the outcome of the property tax protest and issue a non-negotiable decision.
It is important to do your homework and make sure you have all the necessary evidence and documentation needed for your hearings. If you hope to be successful in your hearing(s), preparation is key.
You cannot just walk into your hearing and tell the appraisal district they are wrong. You need to prove the assessment was incorrect through rational evidence. This evidence could include:
Adjustments to appraisals are usually small additions or subtractions from comparable properties’ values. It accounts for any changes in demand resulting from external and internal factors. Adjustments made by appraisal districts are not always considered appropriate and can therefore be challenged. Be sure to inquire with the appraisal district on how each adjustment was calculated and how they substantiate said calculation.
If your property tax protest is based on unequal appraisal, you will need to know the appraised value of comparable properties. This is typically the process if you believe your property was assessed differently from other similar properties, especially if the difference exceeds ten percent of the median level of appraisal.
When gathering evidence to support your claim of unequal appraisal, you need to choose the right properties for your analysis; this can be done using comparables with adjustments. Texas law requires that adjustments be made to comparable properties, so simply using a “price per foot” calculation will not carry as much weight as using comparables with adjustments. It should be noted that the comparisons or differences that are taken to account individually do not provide a sufficient basis for estimating the property value. However, when a suitable selection of sold and active comparables is adjusted, it often provides strong and reliable statistical support for a value estimate that accurately represents the market value.
This means that when you are selecting the comparables that you will use as evidence, you need to select properties that are similar enough to yours that the required adjustments are minimal. Among these factors are the property’s age and condition, the land’s size, and the construction’s quality.
You probably won’t be able to make a compelling case by using only homes that were sold for a similar price per square foot.
It is important to stay focused on the matter at hand during your hearing. Identify the key areas of your protest and do not deviate from them.
Identify three key points to support your argument and stick to them. It may also be useful to prepare a response to the appraisal district’s evidence because they will be trying to prove their assessment was fair.
You also need to avoid talking about your property taxes. While it may sound strange not to discuss taxes in your hearing, property owners need to remember that the hearing is to protest the property appraisal value, not the tax bill. If you are protesting your appraised value, the ARB may believe you are appealing for the wrong reasons if you say your property taxes are too high.
In any given calendar year, it is a good practice to do thorough research and ensure you are up to date with any changes that may have happened in the protest or appraisal processes. For example, if severe weather conditions cause damage to a number of homes in a particular area, affected property owners may qualify for disaster exemptions.
It is also important to stay informed because of the number of proposed bills related to property taxes that are brought before the Texas House and Senate. With Texas property taxes being so high, there are often proposed bills aimed at improving the property tax system for homeowners; this could mean big changes.
It may be useful to seek out a professional property tax consultant in your area. Talk to them about your protest in order to ensure you are fully prepared or find out if it is worth appealing your appraisal value.
Whether for work commitments, family responsibilities, or other circumstances, you may find that you will be unable to attend your hearing. However, if you fill out an affidavit, get it notarized, and mail it in (certified with a return receipt so you know the appraisal district received it), the appraisal district will honor it, and a hearing will be held, but you won’t need to be there.
You can find a form for this circumstance on the Texas Comptroller’s website by searching for the term “Property Owner’s Affidavit of Evidence.” However, as long as you include all the required information in a letter, get it notarized, and send it to the Appraisal Review Board, you do not need to send the form.
Regardless of whether you file a Texas property tax protest or not, you may still need help paying your property tax bill. Property taxes in Texas are, after all, some of the highest in the United States. Delinquency has severe consequences for homeowners, but this can easily be avoided with a property tax loan.
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