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Why Over 200,000 Homes in Houston-Area are Substantially Over-Taxed

Appraisal districts use a process called mass appraisal to value hundreds of thousands of houses. In Harris County, they value about 1.2 million houses each year, using a very limited staff. Most of the property inspections mandated by state low (every three years) are now done using aerial photography! Only limited information can be obtained by using aerial photography.

The fundamental problem is that Harris County Appraisal District’s records regarding the grade, level of remodel, condition and other factors are not reliable. This causes errors because of at least two factors. First, Harris County Appraisal District (HCAD) values homes using the cost approach. HCAD uses their records regarding the property, construction cost data and a computer model to guesstimate the value of each of the 1.2 million homes. The second issue is that HCAD uses sales to calibrate the model. However, if the condition of their information regarding the sales is not accurate, the sales data will cause the HCAD computer estimate to over-state the value of the property.

For example, there must have been huge errors in the property records to cause HCAD to value 5118 Westover St at $35,208, when it recently sold for only $7,000. HCAD’s value is about five times the actual sales price. This property sold in November 2013, so it is unlikely the actual condition on January 1, 2014, was that much different.

The house at 7902 Mendez St sold for $40,000 in late November, 2013. However, it is assessed for $166,206, or more than four times the sales price. There errors in the property records must by acute to cause such a large value error.

Based on an analysis conducted by O’Connor & Associates of over 11,100 sales we believe between 200,000 and 300,000 Harris County taxes are over-taxed by at least 10% and about 30,000 homes in Harris County over-taxed by 50% or more. While this may seem incredible, it is due to the errors in appraisal district property records, inaccurate data regarding cost, depreciation and comparable sales.

Most property owners have limited knowledge about the appeal process and believe myths about appealing property taxes. They do not understand the HCAD jargon of grade, CDU, level of remodel, land lines, etc. Compounding the problem is a reluctance to revise HCAD records. If an HCAD appraiser agrees a property is over-taxed, he will change the value. However, to correct fields of data such as grade, condition or land value is highly unusual. So the same problems occur from year to year, frustrating home owners and causing HCAD a consistently high appeal value.

Since HCAD targets 100% of market value for their homes, half of all houses are over-taxed and half are under-taxed. The result is there are at least 200,000 houses in Harris County over-taxed by at least 10%. Following is a list of some of the most egregious examples of homes over-valued in the southeast part of Harris County. If you recognize the address, please call the owner and make them aware they have the option to protest.

Property Address Assessment Ratio Gross Sale Price 2014 Market Value Owner Name
5118 Westover St 503% $7,000 $35,208 Dennis Bruyere
7902 Mendez St 416% $40,000 $166,206 Pompello Rubio
10333 N Oswego St 374% $12,493 $46,764 Jose C Castro
8 Lanes End St 320% $25,000 $79,897 Clarence E. Foster
5141 Pederson St 306% $15,000 $45,942 Robert Banuelos
5102 Northridge Dr 304% $14,000 $42,501 Gsm Uplift
5334 Malmedy Rd 294% $21,000 $61,694 Humberto Lara
10018 Fairland Dr 280% $23,000 $64,378 A & I Builders- LLC
606 Cypress Ave 276% $28,900 $79,718 Yolanda Jackson Brinkley
2105 E Fayle St 265% $39,000 103289 Bank of New York
5206 Willow Glen Dr 255% $18,025 $45,973 Arnold Leasing Inc
2210 Sauer St 245% $30,000 $73,638 Yellowstone Academy Inc
5543 Ricky St 244% $18,000 $43,933 Valle R Maria
7358 Eisenhower Rd 241% $18,500 $44,675 Juan & Pedro Vazquez
6709 Kassarine Pass 237% $27,469 $64,973 Afewerki Accal
5103 El Buey Way 236% $35,100 $82,820 Joy Investments Retirement Plan
1230 Laskey St 224% $42,000 $94,072 Francisca Sanchez
2009 Colby Dr 224% $49,501 $110,808 Anastasios Katsaounis
1017 Sunset Dr 221% $14,500 $32,091 Raul Cacho
232 North Forrest Ave 209% $171,000 $357,634 Chris Mastrangelo
12433 Ledger Ln 204% $29,000 $59,177 Kathy & Armando Ibarra

Since the property taxes are paid by the mortgage company for most home owners, the pain point for the home owner is about one year too late. When they receive the notice their monthly payment is increasing by $100 or $200 or more per month, the appeal deadline has likely passed. The property tax appeal deadline in Texas is May 15, or the following workday if May 15 is on a weekend.

The mortgage payment will not likely be increased until after the current year taxes are paid. For example, if your home is grossly over-assessed in 2014, the monthly payment will likely be adjusted in the Spring of 2015. But the deadline to protest your 2014 property taxes is May 15 (actually June 2 since May 15 is on a weekend).

There is really no meaningful relationship between the methodical work done by an independent fee appraiser and an appraisal district appraiser. The fee appraiser typically inspects and measures the subject property, so he has accurate data. He also personally visits each of the comparable sales to see if they are really comparable.

For homes build before 1980, an appraisal district appraiser has almost never seen the inside of the house. They just guess at the quality of construction and condition. For homes built after 1980, the appraisers attempt to measure them. However, they are often not completed when the appraisers measure them, leading to errors including size (by double counting vaulted ceilings), and level of finish.

The appraisal districts errors regarding your property are compounded by errors in their information regarding comparable sales. The appraisal districts commit several errors systematically that tend to cause them to over-tax home owners. First, properties that sell are typically prepared for sale by putting them in prime condition. Properties that sell have often been recently painted, have new flooring, a new roof, a new HVAC and other similar items. If a buyer was considering buying a typical house not prepared for sale and one that had been prepared as advised by the Realtor, the buyer would certainly pay more for the latter. HCAD terms the cost of preparing a home for sale “maintenance” and does not recognize any difference in condition between a recently sold house and a livable house.

A second serious problem is that appraisal districts tend to use sales that have been remodeled to value houses that have not been remodeled. Incredibly, the insular culture at some appraisal districts, including Harris County Appraisal District, is they often require you to prove your house has not been remodeled. This is simply a red herring to cover up the extensive errors in their evidence regarding comparable sales. There is no requirement that the property owner prove the appraisal districts records are correct. If anything, the appraisal district doubting the accuracy of their evidence about your house should undermine their credibility on other issues.

In addition to errors regarding the information about your house and the errors regarding the comparable sales, the model used by the appraisal district is imperfect. There is no model that can consistently value houses with precision.

Texas law requires property owners to file a property tax protest to be able to obtain the evidence regarding their house. Protest both market value and unequal appraisal and include a note asking the appraisal district to make their evidence available two weeks prior to the hearing. The protest form is available at

In many cases, given the large number of substantial errors in valuing houses, the appraisal district’s evidence will clearly show the property is over-assessed. It is critical that over-taxed owners protest prior to May 15, or they will not be able to get the information and determine if they are taxed fairly.

After you protest and obtain the appraisal district’s information, one of the first priorities is to see if their evidence is accurate for your house. Then check to see if the sales data is accurate. The Houston Realtors make the photos of properties sold are on-line after the sale.

The data used for analysis was all sales of houses in Harris County that occurred during October 1 2013 to March 31 2014, for which we had a purchase price and a 2014 HCAD market value. The only records that were eliminated were those where there was a major discrepancy between the Realtor MLS data and the HCAD tax roll regarding the size of the land and / or building.

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Blog Author

Patrick O’Connor, MAI, Owner and President
Patrick O’Connor has been active in reducing property taxes, providing expert witness testimony and appraising commercial real estate property since 1983. Pat is active in publishing analyses and data with respect to the real estate market, while being a highly regarded media spokesperson for the real estate community. He holds a MAI, the highest achievable designation from the Appraisal Institute, and is a licensed senior property tax consultant. Pat earned a Master of Business Administration from Harvard University. In 2001, he authored the first definitive consumer guide to Texas property taxes, Cut Your Texas Property Taxes.

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