Texas property tax law changes every few years. See the latest posts for the most up-to-date information.
Every year, during appraisals, people find that the value of their Texas property has gone up. This isn’t necessarily a good thing, especially if they plan to retain ownership of said property for the long term. For starters, this means that they might owe more taxes this year.
According to The National Taxpayers Union Foundation, 30% to 60% of properties are over-assessed. As a result, property owners have to pay more property taxes to the government than what is fair.
The only way to ensure you don’t pay more than what’s fair is to work with a professional who can help you with compliance work and optimize your tax payments. That’s why Texans should hire a property tax consultant to benefit from their guidance.
What Is a Texas Property Tax Consultant?
A Texas property tax consultant’s job is to assist an individual or a company to pay their taxes on time. They are experts in tax law, tax planning, and tax compliance.
This knowledge and expertise help property owners minimize yearly tax liabilities. Moreover, they can protest the tax amount on behalf of their clients by submitting a tax appeal in case of an unfair property appraisal.
There are three types of tax consultants:
Texas Property Tax Consultants
Texas property tax consultants compile data, prepare proper jurisdiction filings, handle negotiations and appeals – all to fight to lower property taxes for their clients each year.
Valuation Tax Consultants
Valuation tax consultants are experienced, tax appraisers. They provide valuable and expert advice to companies on their assets.
Strategy Tax Consultants
Strategy tax consultants assist companies in tax reduction. Their job is to create strategies that can help companies or people minimize their taxes.
Related: Definitive Guide to Lower Your Property Taxes in Texas
Why Every Homeowner Should Have a Property Tax Consultant
If you own several properties across Texas, it can be difficult to manage multiple property taxes simultaneously, and the smallest mistake in calculations or payment delays can get you in trouble with Uncle Sam.
There is more to tax management than reading your tax statement once a year. A property tax consultant will know the hidden meanings behind the legalized tax terms and can help you find ways to pay only a fair amount. They also take care of your tax appeals, so you don’t need to create and submit them on your own.
It is also good to protest your tax assessment every year as it can help keep your taxes low. Texas property tax consultants often provide annual services that renew each year.
What Does a Texas Property Tax Consultant Do?
Compile Property Information
Your jurisdiction demands more than a yearly tax and property report. It is common behavior for jurisdictions to request data, property visitation, inspection, and other inquiries in your assets.
It would help if you let a tax consultant handle these things. These requirements are quite challenging to fulfill if you have one property, but if you own more than one, the chances of making a mistake are high.
Prepare for Next Tax Assessment
After receiving your property tax assessment, you get a short window of time to prepare the appeal, typically around 15 days. Preparing everything before the time limit is up can be challenging; however, a tax consultant prepares all the papers within a couple of days, ensuring nothing is amiss.
Ensure Appeal Success
A successful tax appeal needs an expert’s skill and research to present it. A good tax consultant uses their experience to give relevant market and property data to back up your case without putting you at risk for future tax increases. They can often convince the judge or ARB to reassess and lower your property taxes to a more fair amount.
Are Tax Appeals Successful in Texas?
The state of Texas does not take income tax from its residents, making revenue generated from property taxes critical. As property taxes hold great importance, property owners often find an increase in their property tax assessment every year. So, it is common for Texans to file tax protests.
In 2020, almost 20% of Texas property owners filed a protest report. According to the research, half of the tax appeals were successful, granting the property owners an average benefit of around $300.
The success of tax appeal varies case to case. It is best to have a Texas property tax consultant prepare and present your tax appeal than to do it by yourself. Hiring a tax consultant to handle your appeal increases its chances of being approved by the state.
How to Find a Good Property Tax Consultant?
A reputable Texas property tax consultant has experience and strategies up their sleeve. So, what is the process of finding a good one to fight for you?
Compile All Paperwork
Before finding a property tax consultant, make sure to compile all paperwork for your property to save you time and money. They can help you streamline property paperwork, including:
· Property ownership and details
· Previous property tax statements
· Current property tax statement
Ask for Recommendations
Approach people in your social circle that have used property tax consultant’s services before. Ask them about their experience, and if positive, you can connect with the same tax consultant.
Search Online
You can also search for a property tax consultant online; however, be vigilant about their reviews and service areas. Before selecting one, make sure they offer services in your area and have a good reputation among their clients.
Choose by Average Success Rate
The company or property tax consultant you select must have a good track record. Know the number of appeals they’ve won and savings procured for their clients to date, but keep in mind taxes aren’t typically reduced every year and most consultants achieve a similar reduction.
Ensure Affordability
It would be best if you chose an affordable property tax consultant. Because even if your tax appeal gets approved and your tax reduces, if you are paying big bucks to the consultant, ultimately, it’s a loss. Find a consultant who charges a small annual fee (less than $50, for example, and takes a relatively small percentage of savings won (40% or less is ideal).
Check Reputation
The property tax consultant you use must belong to a reputable firm. To ensure their standing, check for:
· Consultancy license issued by the state
· Past filed complaints against the company or consultant
· No hidden fees
Check Online Reviews
You can easily find out online about the service quality by checking online reviews. Many past customers share their experiences on online forums. A tip for reading reviews is to ignore the outliers and focus on the majority of responses.
Finding a suitable Texas property tax consultant takes time, so stay patient during the process. But, in the end, it will be worth the wait and effort.
How Much Does a Property Tax Consultant Cost?
The charges levied by Texas property tax consultants vary across areas and firms. There are two ways most consultants charge their fees. Your property tax consultant may have an annual fixed rate and/or they take a certain percentage from the property tax saving amount.
Reasons to File Tax Appeal
You may wonder if you need to file a tax appeal. If any reason below sounds relatable, don’t waste more time filing an appeal because you don’t want to miss the deadline.
Assessed Value Exceeds Market Value
Sometimes the tax department over-assesses your house value, and property tax is generated based on this value. This means you have to pay more taxes than you rightly owe to the government. Additionally, selling your house will also become difficult due to high taxes. Therefore, you need to check if the assessed value is similar to the market value of your home.
Valuation Includes Additional Properties
You might have sold or moved your asset to another location in the past year. Unfortunately, many times the tax department neglects to check these changes. Thus, creating a tax assessment that includes unowned or moved assets. So, while you may not need to file an appeal, you still will need to call to see if you can just provide the deed of sale.
Valuation Include Another Owner’s Property
If you’ve recently sold a home, there is always a remote risk that the title company failed to properly transfer ownership from you, the seller, to your buyer. Make sure you check the tax record to ensure that the records are correct. If not, call your title company and appraisal district to determine if you need to file an appeal or provide documentation of the sale of the property.
Incorrect Details on Property Record
Incorrect property details can cause inflated tax valuation. This inaccuracy in records can also damage the sale of your property. So, you need to correct these details before the deadline.
Reducing Taxes Due to Crises
Many people suffered unemployment during the COVID-19 pandemic. In addition, the winter season was brutal in Texas. Therefore, if your property suffered damage in winter that you believe decreased your home value, you can file a tax appeal. If you are eligible for an exemption, a portion of your property appraisal value will not be charged.
If any of these reasons sound familiar, then start preparing your appeal without wasting any time. You can also approach a Texas property tax consultant to take care of such property tax issues for you.
Property Appraisal Process
The property is appraised while purchasing the home, but it is also reappraised every year. Additionally, the tax valuation is based on yearly reappraisal.
Each Texas county has an appraisal district that is responsible for appraising every property. The appraisal team collects all information and classifies it into different categories. Size, condition, construction type, and usage are taken into account. Then the district chief classifies the property into specific groups. This group determines the final tax appraisal value for every property.
What Happens During Formal Property Tax Hearing?
You don’t need to stress about the court hearing for your tax appeal. It typically occurs quickly. But, if you can’t agree in the formal hearing, you will be required to return and try again until an agreement is made. Even better, if you hire a Texas property tax consultant, you don’t have to go anywhere – they do everything for you. The session takes almost fifteen minutes to conclude. In the session, your appeal is heard, and the appeal review board (ARB) makes the final decision.
Your property tax consultant will present evidence for the tax appeal. After hearing your reasons and reviewing your proof, ARB makes the decision. It can be either in your favor or against it. If ARB votes in your favor, the tax amount will be reduced. However, if the final decision is against you, they will not raise your property tax. You will only be required to pay the original assessment amount.
Related: Property Tax Appeal Deadlines
How Is Texas Tax Bill Calculated?
Your county determines your property tax bill based on the location, size, and usage of your property. Your tax value is calculated through this process:
The local public official, also known as county tax appraiser, is appointed to determine the value of your property. In Texas, the tax value of the property is similar to its market value. Then the authorities calculate the tax value of your property by the tax rate. The sum of the value is the amount of tax you owe to the state.
Even in Texas, your tax rate will differ according to your location. That is because local officials are responsible for determining the tax rate. There are 254 counties in Texas, and they all have different tax rates. You can ask your Texas property tax consultant to find out your exact county tax rate.
There is no way to change the value of the tax rate. However, you can lower your tax appraisal value by making a tax appeal or tax protest. You have to make sure that the county office has correct and complete information about your properties. If your data is not updated, you will have to pay higher tax than your property owes.
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