Property Taxes 101
Property tax is a yearly expense that all Texas homeowners need to account for. Fortunately, Texas state law allows you to protest the amount owed on your property tax if you don’t agree with the appraised value of your residence.
But why protest your property tax in Texas? For starters, Texans pay one of the highest property taxes in the country, so the total due every year can be high.
Even more importantly, if you’re able to lower your appraisal — and therefore your taxes — in a given year, that means your appraisal and taxes will also be lower in subsequent years since every year’s appraisal and taxes are based on the prior year’s.
Curious to know more? Read on to learn the facts about this valuable right granted to Texans.
As a taxpayer in Texas, it’s your right to protest your property tax to the appraisal review board (ARB). Depending on the type of property and your individual circumstances, you can appeal to your county’s state district court, the State Office of Administrative Hearings (SOAH), or an independent arbitrator.
Despite the legal right to do so, many homeowners don’t protest their property taxes and end up paying more than they should every year. For homeowners who think protesting an appraisal value is too much work, it’s time to think again.
The law in Texas states that the appraised value of a home should be uniform with that of all other similar properties in the region. Therefore, if you believe that the value of your property is not uniform with the surrounding properties, you may have a strong case.
Since the appraisal district doesn’t have sufficient time or manpower to individually appraise every home in the district, they tend to use a mass appraisal method.
Due to this, your property’s appraised value may be higher than what it actually should be. As a result, you’ll have to pay more in property taxes. However, you can lower your property tax by appealing to the ARB.
The ARB will review your protest in a formal hearing. You can present evidence proving that your property has been appraised at a higher value than similar properties in your area. If the ARB decides in your favor, your property tax will be lowered for the year.
The economic fluctuations following the COVID-19 pandemic are a great example of how the value of property changes with ups and downs in the financial markets. When the housing market sees a rise in prices, the appraisal district increases the appraised value of your property.
Often, the appraised values remain the same even when the housing market goes back to its position before the price hike. Since the appraisal district lacks sufficient manpower and resources, individual appraisals after every economic fluctuation are not feasible. Due to this, you end up paying more than you’re supposed to pay.
As per the current Texas property laws, the district’s chief appraiser cannot increase the appraised value of your property in the subsequent tax year unless the increase is supported by substantial evidence.
The chief appraiser is responsible for the burden of proof to support this increase in property valuation under any given circumstances.
If the district is unable to provide sufficient evidence to support this increase, the valuation of your property will not be increased beyond its initial appraisal. If you believe that the appraisal review board has wrongfully increased the value of your property, it’s your right to protest it–and you can do so without concern that your appraisal may increase even further.
The higher your property’s appraised value is, the more you’ll have to pay in taxes. If you protest your property tax, the appraised value of your property may be lowered. As a result, you’ll pay less in taxes.
Why protest your property tax in Texas right now? Because if you wait for next year, the compound effect will come into play, raising your tax even more.
Suppose the appraised value of your property is 3% higher than it should be. If you ignore it this year and the district increases the appraisal value of your property next year, too, you’ll be paying additional taxes on a value that was already 3% higher than the property’s actual value.
Instead, if you protest the valuation this year, you’ll save money over time.
Now that you know why to protest your property tax in Texas, let’s briefly discuss the procedure.
Tax Code Section 25.19 requires your Texas appraisal district send you a notice by May 1 or April 1 if they have appraised your property at a higher rate than the previous year. Once you get this notice, you should determine if the appraised value determined by the district is correct.
To do this, you’ll need a custom analysis of your property. An expert will also need to conduct a comprehensive analysis of the entire neighborhood and comparable properties in the area. Alternatively, you can consult property surveys and listings of your area to determine if your property’s appraised value is accurate.
If not, you can file Form 50-132, Notice of Protest, with the appraisal review board. Typically, the deadline for submitting this form is 30 days from the date you get the notice from the district or May 15, whichever is later.
Here’s what happens after that:
Before you can prepare for the hearing, you need to make sure you submit your form with all the required information before the deadline. One of the most important sections in the form is the “reason for the protest.”
Keep in mind that the appeal options you get after your appraisal review board hearing are dependent on the reason you provide.
For example, if the ARB determines your property’s value to be over $1 million and you want to protest your tax, you can appeal to the SOAH. But your appeal will only be considered if it concerns the sections of the Tax Code pertaining to unequal appraisal.
Moreover, the option is only available for personal properties. If you want to protest the tax on your industrial property, you’ll have to take a different route. Therefore, when mentioning a reason for protest in your form, keep in mind that the further proceedings of your case will depend on it.
If your reason is not feasible or eligible, you may not be able to appeal the decision of the appraisal review board to the State Office of Administrative Hearings if you’re dissatisfied with it.
The Texas state government has many Web resources that you can use to learn about protesting your Texas property tax. You may also contact them to get more information.
For instance, the Property Taxpayer Remedies document contains information about the possible solutions for taxpayers who are not satisfied with the appraised values of their properties. Similarly, there’s a video guide (A Homeowner’s Guide) that shows homeowners how they should appear in front of the ARB during the formal hearing.
However, despite the availability of these resources, many people do not protest their taxes because it can be quite complicated. For example, you must meet several deadlines for filing appeals and submitting evidence.
If you’ve never appeared for a district hearing before, it may be overwhelming or intimidating for you to make a case for yourself in front of the appraisal review board.
You cannot simply say that you’re unsatisfied with the appraised value of your property. Instead, you need to show substantial proof in the form of property surveys, newspaper listings, deed records, and recent surveys. The collection, organization, and presentation of this information can be quite overwhelming for a novice.
If you’re not happy with the board’s decision, you’ll have to appeal it further, which requires you to fill out more forms and deposit certain fees. Where do you appeal after the ARB rules against you? Should you opt for an independent arbitrator? Are you eligible to appeal to the SOAH? Figuring out all these things can be very complicated.
Why protest your property tax in Texas when you’ve got to jump through so many hoops? That’s the thought keeping many property owners from protesting their taxes. Fortunately, there are many professional services that you can use to protest your property tax in Texas.
Specialty firms have seasoned professionals who know the ins and outs of Texas property tax protests. They’re familiar with the eligibility guidelines, hearing rules, and deadlines. When you hire a professional to protest your property tax, you can rest easy knowing they’ve got it all covered.
Most firms have reasonable fees. For instance, it’s common to pay a low, flat fee for professional services. Then, if the firm can get your property taxes reduced, the company will take a percentage of the savings as an additional payment.
When you protest your property tax yourself, chances are you’re less likely to be successful than a professional who has been filing protests for years. This is because many property owners fail to collect sufficient evidence for the appraisal review board hearing.
Conversely, a professional will gather all necessary evidence, such as engineering reports, property surveys, deed records, newspaper articles, affidavits, and more, to make a strong case in front of the appraisal review board.
Why pay more in property tax than necessary? Home Tax Shield helps Texas homeowners save hundreds of dollars every year–that they’re otherwise leaving on the table–by not protesting their property taxes.
With an 83% success rate, Home Tax Shield can help you save hundreds of dollars on your property tax every year while charging 40% below the industry average. Even better, Home Tax Shield represents you for as long as you own the property, freeing you of the annual hassle of protesting your property tax. Sign up today to get started.
Apr 13th 2022
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