Top 5 Reasons to Protest Your Property Taxes in Texas This Spring
Every October, homeowners across Texas receive their property tax bills, which total up the amount due to the local tax authority by January 31. However, an even earlier statement determines the property tax bill amount: a Notice of Appraised Value. Every April, homeowners receive this notice, which provides the tax authority’s assessment of their property’s value. Counties use this number to calculate the following tax bill.
However, homeowners don’t have to accept that their tax valuation is accurate and fair; in fact, there’s a chance that the number doesn’t account for the whole story of what your property is worth and how much you should be paying in taxes. Instead, every homeowner in the state has the right to protest their property valuation, have a formal hearing to make their case, and ensure they’re paying only their fair share of taxes. After all, with the rapidly increasing prices of houses in Texas — calculated at a 19.8% increase in the past year and a 63.9% increase since five years ago — your property taxes may already feel unfairly high.
Should you take this extra step? Here, we examine five reasons why everyone should protest their property taxes, which can create immediate and long-lasting benefits for your finances.
5 Reasons Why Every Texan Should Protest Their Property Taxes This Year
Ultimately, protesting your property taxes can help lower your property tax bill in the following autumn. If you can prove why your home’s property tax assessment is wrong, it reduces the dollar value in your local tax authority’s calculations. The average effective tax rate for property taxes in Texas falls around 1.6%, so for every $10,000 you can lower your home’s assessed value by, that’s approximately $160 in savings.
Consider these more in-depth reasons why protesting your property taxes should be on your to-do list this spring:
1. You Know Your Property Better Than the Tax Assessors—What’s the Property Really Worth?
One of the most common reasons homeowners protest their property taxes is that the assessment feels wrong. Tax assessors are only required to reappraise properties once every three years. In those in-between years, your appraisal district uses formulas to calculate the property’s new value.
If homes in your neighborhood are selling in today’s hot market, that can suddenly make your home seem worth much more than you think. Appraisers may also be inflating your home’s value based on other homes’ renovations, proximity to amenities, and other factors that simply don’t apply to you.
Your tax appraisal district needs to get an in-depth look at your home every year, so they’re giving it their best guess. If you know their best guess is too far off, it’s time to protest and offer a countering value that you think is more accurate.
2. Mistakes Can Happen
While most property tax protests focus on the appraised value, that’s not the only number you need to double-check. It’s just as essential to ensure you’re still signed up for the right property tax exemptions and that they are being applied correctly. If you’ve recently moved, become eligible for a new exemption, or had another change in status, the county records might not reflect all of those changes. Through a protest form, you can follow up with supporting documentation to ensure those exemptions — like discounts on your property tax bill — are correct.
3. Don’t Get a Sudden Escrow Shortage
If you have a mortgage on your home, then you have an escrow account. This account, set up through your lender, holds money for your home insurance premium, property taxes, and (if applicable) your HOA. These numbers are bundled into the mortgage bill you pay each month, and then the lender pays your actual property tax bill each year using those funds.
Because escrow accounts collect those funds in advance, the lender estimates your upcoming property tax bill and divides that number into twelve monthly checks. Lenders try to be as accurate as possible; they don’t want you to come up short at the end of the year. But if your appraisal district’s numbers differ from the lender’s, you might have an unexpected bill of a few hundred (or even a few thousand) to pay in January. Protesting the valuation in the spring can help reduce the risk of that escrow shortage—either by correcting the appraisal district’s numbers or by giving you advanced notice of a larger upcoming bill.
4. Protesting Your Property Taxes Can Help Your Neighbors
When appraisal districts assess homes in their area, they rely on the valuations of similar neighboring properties to determine what your home is worth. So if many comparable homes on your street skyrocket in value, yours will feel a small aftershock, too. However, if everyone in your neighborhood monitors their property valuations, protests unfair numbers, and tries to keep their property taxes in check, the whole street benefits. Your neighbors will also feel a slight advantage when you protest taxes and ensure you’re paying the fairest amount possible.
5. Make Sure You’re Paying a Fair Tax Amount
Peace of mind is a key benefit of protesting: you’re double-checking the tax appraiser’s work and ensuring you don’t pay more in taxes than you should. Property values across the state continue to skyrocket, and individual tax jurisdictions may also increase their tax rates. Filing a protest form and following the formal hearing process can help reduce the numbers you see on your tax bill to ensure they stay more affordable. Even if the numbers don’t go down—or don’t decrease as much as you would like—you at least know that the tax assessors and a hearing panel looked at the numbers.
A Protest Professional Can Help Texans Protest Their Property Taxes
Whether you’re hoping to reduce your tax bill this year or keep the county’s assessment of your property’s value in check for years to come, protesting your property taxes is a step in the right direction. However, it’s a journey you don’t have to go on alone. Home Tax Shield is here to help you navigate the process. First, we can objectively assess your property so you have a clearer idea of what number you should see on your Notice of Appraised Value. Then, we can manage the filing, protest, and hearing processes on your behalf. Sign up today to get started.