If you filed a protest on your property tax value, then your hearing date is soon approaching. There are four necessary pieces of information you must bring to the hearing to aid your attempt in getting a reduction in your property value. The four main types of information to be compiled for the hearing are:
- Pictures of the subject property
- Income analysis (for commercial properties only)
- Comparable sales data
- Assessment comparables
1. Pictures of the property should show:
- The quality and condition of improvements on the property
- Any lack of maintenance, documented with pictures and bids
2. An income analysis for protesting commercial properties
- Income analysis should have a profit and loss statement for the previous year, and a rent roll as of January 1 of the current tax year. The counties in Texas use January 1 as the effective date for assessment.
- The analysis should also provide a detailed market rent value, market vacancy and market expenses in order to arrive at the net operating income for the property.
- If your property has above-market occupancy or rental rates, or below-market operating expenses, you should make adjustments when calculating the net operating income.
- If you operate your own property, your income analysis should include an allowance for labor and management fees, if these fees are not included in the profit and loss statement.
- Revenue is not directly related to real estate rentals like box sales, truck rentals, etc., these and other related expenses should also be excluded.
- The net operating income is then capitalized to determine the value of the property. This appraisal should be sufficient to support your value.
3. Comparable sales data for residential and commercial properties
- Comparable sales data are given strong consideration at the hearing, because they are an indication of market value.
- Data from sales of comparable properties for the past one or two years should be collected and rechecked.
4. Assessment comparables for commercial and residential properties
- Assessment comparables are given strong consideration by some appraisal districts, but not by others. Pictures of competing self-storages that are assessed for less than your property value can be an effective tool for cutting your commercial property taxes.
- To protest your home, you can select a reasonable number of homes in your neighborhood and prepare a table including your property’s assessed value and the assessed value of the selected comparables.
**Be sure to remember the following:
- Make enough copies of all the evidence you have
- Present separate copies of the evidence to each member of the Appraisal Review Board (ARB) panel
- To know how many copies you need, check the ARB hearing procedures on the county appraisal district website
- The ARB hearing procedures will provide an indication on how much time you will have to present your case
- Be prepared and be on time for the hearing
- Be persuasive and show the evidence that supports your opinion on the value of your property
- The ARB panel does not know all things about your property nor do they know all things about your neighborhood so provide the facts and avoid getting emotional
If you are unsatisfied with the results from your hearing, you can appeal the decision and file suit or request binding arbitration. You have 45 days to do this.
To find out if your property is over-assessed, go to the Texas Fairness Checker at CutMyTaxes.com and enter your property’s information. You will quickly find out if you are fairly assessed or not based on unequal appraisal.