Protest

Top 8 Property Tax Protest Strategies

With few exceptions, all property owners in Texas are required to pay property taxes every year. The amount of your annual property tax bill is based on 3 variables: 

Variables #1 and #2 can increase or decrease yearly. Unfortunately, you can only change #1 at the voting booth, but #2 is a different story. Texas law guarantees you the right to protest/appeal (different counties use different terminology) your property’s tax appraised/assessed (different counties use different terminology) value every year. So, when your local CAD (County Appraisal District) decides to increase your property’s tax appraised value, you can protest that increase and prevent your property tax bill from increasing. If you’re really good, you can even get your value lower than it was previously, which would reduce your tax bill. 

If this is your first time protesting your property taxes, the process may seem intimidating, but I promise it’s much easier than it may appear and it can save you a lot of money. The process is designed by the state of Texas so that you can do it on your own and regular folks do it themselves all the time. The name of this game is negotiating with your CAD to get your tax value as low as possible. No, this doesn’t impact your properties real market value so don’t worry about that.

Here’s a quick video that explains what a property tax appraisal is and how it’s generated. If you’ve had too much coffee and want a much more detailed overview of the Texas property tax system, then you’ll love this video series. 

The process of protesting your property’s tax appraised value is dictated by the state of Texas. Each CAD’s process varies slightly, but most of the big ones operate basically the same way. Here’s a brief introduction of the process from the Texas Comptroller’s Office:

If the appraisal district appraises your property at a higher amount than in the previous year, Tax Code Section 25.19 requires the appraisal district to send a notice… by April 1 if your property is a residence homestead.

If you are dissatisfied with your appraised value or if errors exist in the appraisal records regarding your property, you should file a Form 50-132, Notice of Protest with the ARB (Appraisal Review Board). In most cases, you have until May 15 or 30 days from the date the appraisal district notice is delivered — whichever date is later.

After filing your protest, you will receive written notice of the date, time, place and subject matter for a formal hearing with the ARB. At the formal hearing, the ARB listens to both the taxpayer and the chief appraiser. You may discuss your objections about your property value… in a hearing with the ARB. Most appraisal districts, however, will informally review your protest with you to try to resolve your concerns prior to a hearing. Check with your appraisal district for details. The ARB’s decisions are binding only for the tax year in question.

The above section describes the process of protesting in person, but most of the large CADs also have great options for doing this all online (see links at the bottom for your county).

The Texas Comptroller’s Property Tax Assistance website is an excellent resource if you want to learn about the process of protesting your property taxes. This info applies to all counties in Texas. When it references, “your local appraisal district” it is referring to your CAD (see links at the bottom for your county). 

I would recommend that you start with, “A Homeowner’s Guide.” This is a series of short videos that explain the entire tax appraisal protest process. This includes several great tips about how to protest your property’s tax value.

It’s important to understand your CAD assigns your property two values. The terminology for these vary by county, so to avoid confusion, I won’t use them here. Just know that if one is lower than the other, your taxes are based on the lower one. But when you protest, you’re disputing the higher value. In order to reduce your property tax, you’ll need to get the higher value reduced to an amount less the lower value. Once you do this, the previously lower value will be reduced to match the new high value.

Confused yet? Stay with me. Here’s an example. Let’s say your high value is $750,000 and your low value is $700,000. If you successfully protest your high value down to $725,000, your tax bill will not change because this figure is above your current low value and your tax bill is based on your low value. But if you get your high value down to $675,000, then your low value will automatically be reduced to $675,000 and you will have successfully reduced your tax bill. Woohoo!

Wouldn’t it be great if you knew what evidence they plan on using against you in your protest meeting? Ask and ye shall receive. “Once you have filed your protest, you may request a copy of the evidence used to determine your protested property’s appraisal value. The request must be made in writing at least 15 days prior to your protest hearing.”

Without further ado, here’s a list of my Top 8 Property Tax Protest Strategies. Don’t be afraid to use several of these during your protest. Remember to bring three extra copies of your evidence for the ARB panel members.

Strategy #1:  “I live in the slums”

One of strongest types of evidence you can present to support your protest is relevant property sales that support a lower value. Be thorough in your selection of this data. The Castle Team will provide you with the broad data for the relevant property sales in your neighborhood, but as the person who knows the most about your home, it’s best that you review these sales and select the most relevant properties. Here’s what you’re looking for:

Judo is the martial art of using your enemy’s force against them. This strategy is similar, but different that Strategy #1. Instead of using property sales, you’re going to use their own data against them by comparing your tax value to the tax value of your neighbors. If yours is higher, based on absolute value and/or value per square foot, you can use this evidence to prove your home is, “Unequally Appraised.” This is also how you earn your black belt in protesting.

Okay, not really, but presenting evidence to support this is another effective protest strategy. Yes, this strategy can be used in conjunction with Strategy #1 or #2. Is your roof old and leaky? Do you have a sinkhole in your kitchen? Are there cracks in your foundation? Is your carpet older than you? Include photos of these issues in your evidence. Better yet, include any recent inspections. Even better than that, include repair estimates (for repairs you haven’t made). The more problems, the merrier.

I sure hope not, but if it is, you might as well benefit from it, right? Do you live next to a graveyard, freeway, flood-prone bayou, powerplant, airport, prison, railroad tracks, busy road, loud bars, UFO landing site, etc.? Anything that reasonably makes your home less desirable, also makes it less valuable. If there’s anything like this nearby, you might be able to leverage it to support your protest. Include info and/or photos of it in your evidence with an explanation of how it hurts your property’s value.

If you bought your home recently and your sales price and/or mortgage appraisal was less than your tax value, this known as a, “slam dunk.” The strongest evidence of a property’s value is how much it recently sold for on the open market (as long as it wasn’t a distressed sale). Submit a copy of your Closing Statement or mortgage appraisal (whichever is lower) and start warming up for your victory dance.

This is not a cheap option, but it’s a strong one. If you’re confident your tax value is too high and you didn’t purchase/refinance your home recently, consider ordering a new appraisal from an independent Licensed Appraiser. Make sure you factor in that this will probably cost you $400-$600, but if it supports your protest, it’s as good as gold. A Licensed Appraisal is generally considered the most accurate type of property valuation. It’s pretty unlikely they’ll even try to argue with this.

Carefully review the details of your home on your CAD website (see links below). Are there any mistakes that benefit you? Does it say your home is 9,700 square feet, but it’s actually a measly 9,300 square feet? Does it say you have 8 bathrooms, but you’re actually scraping by with only 7? Including evidence to prove their info is incorrectly inflating the details of your home is another great way to justify a lower value.

A protest is a negotiation. As a Certified Negotiations Expert, I can assure you that people in a negotiation are generally more flexible and accommodating if you’re nice. You’re asking three people to consider your evidence and make a quick decision about how much they’re willing to compromise. If you can be firm and clear while also being polite and friendly, you’re almost certain to get better results.

Remember, most of the large CADs have options for you to submit your protest with evidence online without any meeting or interaction. If you’re not happy with this result or you would prefer to have a protest meeting, here’s a brief overview from HCAD of what you can expect:

Your first meeting will be with a staff appraiser who will review your evidence and the district’s evidence in detail. The appraiser has the authority to settle the protest if the appraiser believes the evidence is sufficient to do so. If a settlement is not agreed upon, a hearing before an Appraisal Review Board (ARB) will be scheduled.

Panel hearings are informal. You should indicate to the panel at the start of the hearing if an unequal appraisal is at issue. The ARB’s panel will ask the HCAD appraiser to first present the district’s evidence supporting its appraised value. Once the HCAD appraiser has finished, you will be allowed to ask questions and to present your evidence. The ARB will also have the opportunity to ask questions needed to clarify any matters when you complete your presentation.

Most hearings are allotted 15 minutes. It is very important to prepare a simple, well-organized presentation. At the conclusion of the hearing, the ARB panel will determine if your property was over-appraised. The final decision of the ARB is issued in writing and will be mailed to you via certified mail. If you do not agree with the decision of the ARB, you have the right to appeal the decision to State District Court within sixty (60) days of receiving the written order.

Important County Appraisal District website links:

After you’ve reviewed the info in this article, let us know if you’d like us to provide you sales data for your protest or if you have questions about the process. We’d love to help.

Castle Team