Last year’s data shows that property tax savings from tax protests in Travis County increased by 69.7%, from $181.3 million in 2012 to $307.7 million in 2021. In comparison, statewide property tax savings rose from $1.509 billion in 2012 to $4.38 billion, reflecting a 190% increase.
Travis County Tax Protest Property Tax Savings
Homeowners were the major force behind increased property tax reductions from Travis County property tax protests. Tax protests saved Travis County homeowners $54.02 million in 2012, but savings increased 73% to $93.53 million in 2021. Property tax savings from Travis County commercial property owners increased by 68%, from $127 million in 2012 to $214 million in 2021.
Texas Tax Protest Property Tax Savings
The statewide property tax savings for homes had a significant surge, increasing from $251 million in 2012 to $677 million in 2021, representing a remarkable 170% growth. The property tax savings derived by business owners had a substantial growth, increasing from $1.258 billion in 2012 to $3.702 billion in 2021, representing a significant 194% surge.
Are Tax Protests Worthwhile?
The average savings for homeowners in Travis County who protested was $905, compared to the statewide savings of $527 from informal / ARB hearings. In 2021, commercial property owners in Travis County achieved an average savings of $5,660, although the average savings per commercial tax protest statewide was $4,086. Engaging in tax protests has significant benefits, resulting in huge savings.
Are Benefits of Protests Spread Equally?
No, since few homeowners complain, protest advantages are skewed toward commercial owners. Fewer than 10% of homeowners object. In 80 to 90% of informal protests, state-wide owners get a decrease in the informal hearing. The probabilities are significantly greater in Travis County. In 85 to 95% of informal protests for homes, homeowners get a decrease in the informal hearing.
Travis County was not the Global Leader in Tax Protests
Travis Central Appraisal District doesn’t exceed the number of tax protests at any other Texas appraisal district, reporting 141,184 tax protests in 2021. However, Harris County easily outpaces all other Texas counties in total protests. Tarrant County takes the second spot with 148,004 property tax protests, and Dallas follows as the third with 147,665 protests in 2021, the most recent year for available data.
Travis County Protest Rate High
Travis County has one of the highest rates of property tax protests in the county, and the proportion of accounts challenged exceeds that of Texas. In recent years, 35.6% of tax parcels in Travis County have been protested, marking an increase from 23% in 2014. The statewide percentage of protested parcels in Texas rose from 6.5% in 2014 to 10.5% in 2021. In 2021, only Travis (35.6%) and Galveston (30.6%) had a higher proportion of protested accounts.
Travis County Tax Protests versus Statewide
In 2021, there were 20,960,000 tax parcels statewide, with 2,191,000 (or 10.5%) being protested. This marks an increase from 6.5% of protests in 2014. Specifically, Travis County had 397,540 accounts in 2021, and 141,184 of these accounts were protested. Travis County property tax protests accounted for 6.4% of statewide tax protests. In Travis County, the frequency of protests increased from 23.6% in 2014 to 35.5% in 2021.
In Travis County, assessment reductions increased by 69% from $6.72 billion in 2012 to $11.4 billion in 2021. The amount of Texas assessment reductions climbed by 190%, from $55.9 billion in 2012 to $162.2 billion in 2021. Judicial appeals, informal hearings, and hearings before the appraisal review board are examples of these assessment decreases. There is no relevant data on assessment decrease from binding arbitration.
Assessment Reduction by Stage
You can lower your property taxes through the informal hearing, appraisal review board hearing, or binding arbitration / judicial appeal. Texas has a single Tax Code that covers property valuation and tax protest procedures. However, the implementation of these procedures varies among counties for different reasons. Some appraisal districts favor resolving protests in the informal hearing, while others are more inclined to escalate cases to binding arbitration or judicial appeal instead of settling at the appraisal review board.
While evaluation reduction has grown dramatically in the informal hearing and judicial appeal stages. Between 2012 and 2021, assessment reductions fell by 69%, from $4.21 billion to $1.3 billion. Assessment reductions obtained via a judicial appeal increased by 15%, from $1.9 billion to $2.2 billion. Meanwhile, the ARB’s assessment climbed by 1284%, from $0.57 billion to $7.89 billion.
Travis County Resolves Most Single-Family Accounts at the Informal Hearing
The following are remarks on the assessment reduction procedure in Travis County and statewide. Travis County assessment reductions occur 11% in informal hearings, 69% in ARB hearings, and 19% in judicial appeals. Statewide, informal hearings account for 45% of assessment reductions, while ARB hearings account for 36% and judicial appeal reductions account for 19%. Judicial appeals are an often-ignored method for lowering property taxes.
Are Informal Hearings Worth It at TCAD?
Informal settlements in Travis County see a decrease in value in 65-90% of cases, while the success rate at informal hearings across the state is approximately 80%. Homeowners have a higher likelihood of success compared to commercial property owners in both Travis County and statewide. Specifically in Travis County, 87-90% of informal protests by homeowners are successful, whereas the success rate for commercial property owners ranges from 40-75%. Statewide, around 80% of homeowner informal protests result in a reduction, while the figure for commercial property owners is about 62%.
Are ARB Hearings Worth It?
Travis County ARB hearings frequently lead to lowered valuations compared to the average across the state. Specifically, 86% of protest hearings result in reduced values at the Travis County Appraisal Review Board, with 92% for single-family properties and 65% for commercial properties. In contrast, the statewide success rate for appraisal review boards is significantly lower, standing at 20% overall, approximately 30 to 60% for single-family properties, and around 5 to 10% for commercial property protests.
Options after the Appraisal Review Board (ARB)
State Office of Administrative Hearings (SOAH), judicial appeal (lawsuit in county district court), and binding arbitration are the alternatives following the ARB. In contrast to the abundance of judicial appeals and binding arbitration filings, the number of SOAH cases is comparatively limited. A hearing is not necessary to resolve the majority of binding arbitration cases. Following the appraisal review board, the following entry for this Travis County blog will discuss appeals.
Advice for taxpayers: It is advisable to lodge a protest every year and continue with the appeal process until reaching the level required to get the most favorable outcome. Recur on a yearly basis. Typically, yearly protests may be resolved with an informal hearing. Nevertheless, some features provide more challenges in terms of valuation, while others include intangible worth that must be separated from the overall value. Intangible value may be shown by the commercial enterprise value of a hotel or the credit rating of a lease guarantor.
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Source: Appraisal district assessment and protest data from Texas Comptroller. Tax savings are estimated based on a 2.7% tax rate and no exemptions or homestead caps. O’Connor is a private company specializing in tax reduction and is not affiliated with the Texas Comptroller or and government entity or appraisal district.
