Protesting Your Property Tax Appraisal
by Bill Doyle

“To own a bit of ground, to scratch it with a hoe, to plant seeds, and watch the renewal of life – this is the commonest delight of the race, the most satisfactory thing a man can do.” So said real estate broker and essayist Charles Dudley Warner in his 1870 work, “My Summer in a Garden.” Another piece of wisdom from Warner’s work rings true today and that is: “The thing generally raised on city land is taxes.”
     Property owners who review their annual real estate tax bills may find that Warner’s proverb holds true for them as well. Around October 1st the county tax collector mailed tax statements to landowners. In Texas, real estate taxes provide more money for local governments than any other source for funding public schools, city streets, county roads, police and fire protection and various other services. Your receipt of this tax statement is the final chapter in an ongoing annual saga originating with your county appraisal district.
     An evaluation of all real estate including land and structures is performed by each county’s “Central Appraisal District.” The appraisal district is charged with determining the fair market value of all property as of January 1st of each year. A property’s fair market value is the price for which it would sell when both buyer and seller want the best price and neither is under pressure to buy or sell. As a practical matter, this means that the appraisal district will estimate this value and send to the owner a notice of this value some time during the first quarter of the year. The appraisal district, through their own analysis, determines these values – for the most part on a macro basis – by assigning percentage increases or decreases to similar properties (e.g. all homes in a subdivision). All properties in a county may not be reappraised every year. At the present time, under state law, the taxes on homesteads can only go up a limited amount in a one year period. The appraisal district may determine a market value for your property and a taxable value for the property. The taxable value is going to be the previous years’s market value plus 10% times the number of years since it was reappraised. If that value is less than the market value, it will be the value used in computing taxes in that year. However, this taxable value will then increase 10% per year until it equals the market value. In a period of increasing property values such as we have had for more than a decade, these increases in many cases have made taxes a material amount compared to the principal and interest payment.
     Each taxpayer’s amount of tax for a given year is determined by multiplying the fair market value (or the taxable value if it is less than the market value) by the tax rate. Tax rates are set by local taxing units, which include the county, cities, school districts, and special districts (e.g. municipal utility districts, rural fire protection districts, junior college districts).
     Politicians are fond of proclaiming how they are holding the line on taxes because they are not raising the tax rate while the jump in valuations are providing them with substantial increases.
     So, you have received your notice of valuation; the appraisal district has raised your value and you believe that the new value is more than the property is worth. Each property owner has the right to appear before an “Appraisal Review Board” (ARB) for a formal review of the value assigned by the appraisal district. The ARB is an impartial body of your fellow citizens, normally in real estate related businesses, who sit usually in three member panels to hear all protests. The taxpayer must file a written protest in a timely manner with the appraisal district disputing the value. This protest must be received by the appraisal district by April 30 or within 30 days after receipt of the new value, whichever is later. And one caution, send the protest to the appraisal district by certified mail with a written receipt requested in order that one can prove a timely date of protest.
     If one is to prevail in a protest, he must develop data to show that the appraisal district is in error. The best evidence will always be recent sales of comparable properties. Also valuable will be prices of new homes and lots, and the prices of other properties offered for sale. This type of data is available from local boards of Realtors, individual Realtors, appraisers and the appraisal district records. Much of this information can be found online.
     After a protest the next contact with the appraisal district will normally be a request for a conference with you by an employee of the district. This representative will be a knowledgeable person who will review with you the facts as you see them, and very often a reasonable adjustment of value can be obtained at this meeting.
     If not, then a formal hearing with the ARB is scheduled. At your hearing, you are afforded a full opportunity to present your facts and your case for adjustment. The members are able to ask questions of you in regard to your facts and property. After discussion they render their decision in regard to your request for adjustment. All of this occurs in a relatively informal low pressure atmosphere. If you show up for the hearing with sound information and documentation, your chances for a favorable result are very good. So, do not worry about bureaucratic intimitdation; they wil appreciate your facts and after all, the worst they can do is to tell you "no!"
     If you are still unhappy with the decision of the ARB, you can appeal by taking your case to state court. CS