How to Dispute Property Taxes in Texas
Property taxes are necessary to fund public works, but do they have to be so high?
It appears that in Texas, they do. Without an income tax to raise funding, the state finances much of its budget from property and sales taxes. In fact, this state has one of the highest property tax rates in the country.
The good news is that Texas property owners have the right to dispute their property tax appraisals. If you believe your property was overassessed, there is an established process for disputing your property taxes.
Where Does Your Property Tax Calculation Come From?
The Texas Comptroller’s Office requires taxable property to be appraised by January 1 of each year. The county appraisal districts determine the value of each property and calculate the tax from the Texas Property Tax Code.
Property Value X Tax Rate = Total Property Tax Owed
For example, if the appraiser values your principal residence at $200,000 and the tax rate is 2%, you owe $4,000. Of course, it is never that simple, and other taxes figure into the total.
The best way to receive a tax exemption on your home is through the homestead exemption, which caps the increase in value allowed at 10%. If you are disabled or over 65, you may qualify for other exemptions.
The Steps to Disputing Your Property Taxes in Texas
To help lower your property taxes, you need to be prepared to do some legwork.
Step 1 is to determine your home’s value. Ideally, you get it from a licensed appraiser, which can run you from $300 to $500. The price varies with the location and size of your property.
Alternatively, you can get a Comprehensive Market Analysis (CMA) from a realtor. A CMA includes the same basic information as a formal appraisal, but it won’t carry the same weight with the Appraisal Review Board (ARB). Be sure to offer compensation to the realtor for their trouble.
The appraiser can take one of three approaches to valuing your property — Sales Comparison, Income, and Cost.
Suppose your home’s current tax appraisal is at or below the appraisal you receive from a CMS or licensed appraiser. In that case, you are unlikely to win an appeal based on value unless you can show negatively impacting defects like the need for a new foundation or roof.
Step 2 includes filing a formal, written notice of protest to your county appraiser’s office by the deadline set for your county. Each county has different deadlines for protests, though the date is most likely May 15th or 30 days after the mailing date of your appraisal.
You can obtain official forms, although they aren’t required. As long as your paperwork includes the following:
- The property owner’s name
- The address of the property subject to protest, and
- A statement of dissatisfaction with the appraisal district’s decision
… you’re good to go.
Once you file your protest paperwork, the ARB should notify you within 15 days about the hearing’s date, time, and location.
In Step 3, you discuss the protest with the appraisal office. Research the Central Appraisal District’s record card for your property, which you can find online or at the district office. Review the card for errors, which are an excellent basis for a property tax protest.
You may be able to resolve the issue before the hearing. Contact your county appraisal office for the correct procedure.
Step 4 — you meet the staff appraiser and, if the issue remains unresolved, the Appraisal Review Board.
The first thing to know is that the chief appraiser has the burden of proving your property’s value. If the chief appraiser fails to make the county’s case, the ARB must rule in your favor. However, the chief appraiser has likely been through many protests, so do your homework.
At least 14 days before the hearing, you should receive a packet including a description of ARB procedures. Read and follow them carefully.
Plan to arrive early for your hearing. And most importantly, stick to the facts!
The ARB cannot consider the tax rate or how unfair you think it is, and it can’t affect how the tax money is spent, nor do your thoughts on the legality of the process count. If you can, attend an ARB meeting before you attend your own hearing. They are public, so you can get an idea of how things work.
Be prepared with facts, figures, and examples. This is where you show off your formal appraisal or CMA. Print a copy of the appraisal for each board member. Then calmly and clearly state your case. Answer any questions the board has.
If you need to speak to the condition of the property because you believe the appraisal is unequal or the property has major defects that lower its value, bring pictures of the problem areas and estimates from licensed repair contractors.
Also, remember that the appraiser has access to the same information your licensed appraiser or realtor has, so think very carefully about what information you use to make your case. If you exclude anything, be prepared to explain why.
The ARB Hearing
Sometimes called a formal hearing, the ARB hearing involves meeting three members of the Appraisal Review Board at the day, time, and location specified in your information packet.
You or your agent and the district appraiser present evidence separately to support the market value opinions and unequal appraisal on your property. The board members decide who to rule for, and the decision is final. You cannot negotiate the conclusion reached by the ARB.
You can appeal the decision in a Texas district court by filing a lawsuit or requesting binding arbitration. Before you go down this path, consider the potential tax savings compared to the legal costs and the cost of an expert witness. That being said, most Texas judicial appeals of property tax assessments are successful.
Republic Property Tax Can Help You
We understand – the process involves a lot of steps and can be very overwhelming, especially if you have never protested your taxes before. That’s where our team comes in.
Republic Property Tax is a full-service property tax consulting company with expertise in real estate, personal property, cost segregation, and the complex valuation issues associated with special-use properties.
RPT provides professional property tax assessment appeal representation, meaning we will manage the entire tax appeals process and fight to keep you from paying more than your share of property taxes. We handle your property tax protests from start to finish every year and help you realize substantial property tax savings.
When you receive your property appraisal letter, don’t panic. There are actions you can take if you believe your property was overassessed, and it’s possible to get your property value lowered. You can fight for your rights yourself, or you can contact our team for appeal representation.