With appraisal notices coming out and the appeal deadline set for May 15, many Texans are getting ready to appeal their property taxes for the first time. With some of the highest property taxes in the nation, homeowners and businesses need a way to trim the largest bills they have every year. Exemptions help lower the taxable value, but appeals can do so as well. While protests were once reserved for high-dollar counties like Travis or Fort Bend, taxpayers across the state are now challenging the rulings of their appraisal districts (CADs).
While there are plenty of upsides to challenging taxes, many taxpayers wonder if there are any downsides. After all, you are openly disagreeing with the CAD, forcing them to take another look at your values. Could this backfire on the taxpayer and increase taxes? In this article, we will take on more Texas property tax myths and show what Texans can expect.
Can Protesting Raise Your Taxes?
No, to give a short answer. Many clients ask this question, as it is a natural fear. The appraisal district cannot raise values due to a protest, even if evidence indicates that there should be an increase. Property tax appeals are guaranteed under the Texas Constitution and are there to protect Texans from increases, not force them upon them. One of the best things about protests is that they are risk-free, which makes them an option for everyone. The worst result of an appeal would be that the value of your home or business is confirmed, which should still give you peace of mind, since it confirms you are being taxed fairly.
Will the CAD Increase my Values Later in Retaliation?
Again, the answer to this is no. While CADs do not have the best reputations, they will not punish you for protesting either. A successful protest establishes the true value of a home or business, which means that the CAD cannot arbitrarily raise it again the following year. Property values are tied to the real estate market, so they will naturally wax and wane as years pass, but a taxpayer filing a protest does not have to worry about seeing their values directly raised. In many counties, thousands or even hundreds of thousands of appeals are filed every year, with more being filed as time passes.
Why do Property Values Increase?
As stated above, they are tied to the real estate market, though not necessarily the most recent one. As sales of properties increase in an area, the CAD will naturally begin raising values to match. This can lag behind for several years, meaning a taxpayer might be getting appraised for a hot market that no longer exists. This is one of the most common reasons to appeal. Overassessment is quite common thanks to delays and mass appraisal techniques that do not look at individual homes or businesses.
Improvements added to a home can often increase its value. These are things like garages, driveways, and pools. Improvements can often make two similar homes appraised significantly differently. Many repairs that require permits, such as new roofs, are reported to the appraisal district, which will then often raise values to match. Two homes with nearly identical statistics might be valued at very different levels thanks to improvements.
Why do Property Taxes Increase?
Since taxes are built on values, market increases will also tend to lead to higher taxes. Additionally, tax rates change every year as they are created by dozens of taxing entities. Since organizations like school districts or MUDs have different annual budgets, tax rates must be raised to meet funding goals. This makes tax bills unpredictable every year, as both values and tax rates can be quite different from year to year. This is why it is important to appeal annually, as it can fight unfair increases and keep costs stable. Businesses typically use annual protests to cut costs, but homeowners should look to do so as well, as there is no downside to trying each year.
O’Connor has Over 50 Years of Experience with Appeals
While there is no risk to protesting your taxes, winning an appeal or maximizing the results can be difficult. It is easy to prove simple errors, such as the incorrect owner or a missing exemption, but it is another matter to prove that your property is overvalued or unequally appraised. This requires extensive photography, property records, sales records, and comparisons between appraisals. Even after all of that is gathered, and an appeal is filed, you must attend an informal hearing with the CAD or a formal appraisal review board (ARB) hearing. We at O’Connor can help in all of these aspects.
For over 50 years, we have been helping taxpayers in Texas get the reductions they deserve. When you sign up with us, you get a client success consultant who will walk you through the whole process and act as a personal point of contact, answering all of your questions. In many cases, we can also send out our concierge service to visit your property, where they will check your appraisal and look for any evidence that can help in the appeal process. Once evidence has been gathered, we will represent you at all levels of protest, taking your case to the highest protest type needed to get you the maximum reduction. We can even organize lawsuits if you want to go into litigation. There is no cost to join, and you will only pay from your savings if we are able to lower your taxes.
Frequently Asked Questions About Property Tax Myths
Q: Can appealing my home lower its resale value?
A: No, as the actual value and the official market value of a home are separate, and appeals simply challenge the CAD’s values. Having a proven value can even be a plus for a home seller, as many sites post previous tax bills.
Q: Can appeals lower tax rates?
A: No, as protests can only challenge values. Lowering taxable value tends to make bills go down, as these are multiplied by tax rates to create bills, but the rates themselves cannot be lowered.
Q: Does appealing hurt my exemptions?
A: No, in fact, they enhance them. Both target values separately, meaning they can combine their effectiveness when used in tandem. Even if your school taxes have been reduced to zero by the homestead and over-65 exemptions, appeals can still benefit you by lowering other taxes.
Q: Is there any risk to protesting my property taxes?
A: No, protests can only benefit you. The worst outcome is still good, as it at least confirms that you are being taxed correctly.
Q: What is the deadline to file appeals?
A: May 15 is the official deadline, but there are some caveats. If it falls on a weekend, then it is extended to the next working day. Also, if your notice of appraised value is late, you may have more time. You have 30 days after your notice was mailed to appeal, or May 15, whichever is later.
