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Twenty Plus Reasons Texans Should Protest Property Taxes Annually

  • It is your money.
  • You can spend your money better than the government.
  • Property taxes are one of the most significant taxes for many Texas families. Texas has a high sales tax and no personal income tax.
  • Property taxes are the only tax that can be appealed.
  • Property tax is ad valorem. Ad valorem means based on value.
  • Reasonable people can disagree on value.
  • The number of parcels to value in Texas is huge: 20,663,600. There are only 2,221 appraisers at all Texas appraisal districts, and an estimated 75% work in the field measuring new property. That leaves an estimated 555 appraisers to develop mass appraisal models to value and average of 37,198 properties per appraiser per year, or 169 per day.
  • Appraisal districts use mass appraisal models that depend on accurate property data for all 20,663,600 parcels in Texas and accurate value and adjustment factors for cost, depreciation, etc.
  • Hopefully, you view your next notice of assessed value more carefully. It was not hand crafted by a Texas Licensed Real Estate Appraiser after driving past your house and then driving past carefully selected comparable sales, based on location, age and size.
  • The value for your property appraisal is generated using “Mass Appraisal”. After assembling model, data and values, they hit the “Easy Button” which spits out values for all houses in the land. On average, the home values are slightly lower than market value; 2 or 3%. However, about 45% of the values exceed 100% of market value and about 15 to 25% of the houses exceed 110% of market value. (The reason I know this is from doing ratio studies of sales prices versus assessed values for recently sold homes for fifteen years for major Texas appraisal districts. Our team has completed likely 50 to 100 ratio studies for Texas appraisal districts for our own use; not for sale to the appraisal districts.)
  • The combination of iffy noticed values and large volumes of property tax protests improve settlement circumstances.
  • The number of appeals in 2018 (1,809,439) was much larger than the number of appraisers hired by appraisal districts (2,221). On average, each appraiser is involved in 814 settlement attempts during a 3 to 6 month period.
  • In Texas statewide in 2018, 59% of property tax protests were resolved in the informal hearing process, with 80% of these settlements involving a reduction in value.
  • Results were about 50/50 at the appraisal review board (ARB). Of the 418,000 ARB hearings in 2019, 223,000 involved a reduction, or 53%.
  • Whether you settle at the informal or continue to the ARB, your chance of success is 53 to 80%! Those are excellent odds. And you can and should do this every year.
  • Assume a $300,000 home, a 4% reduction and a 2.7% tax rate yields $324 in year one tax savings. Final value $288,000.
  • Next year appraisal district does not revalue; value remains at $288,000. Taxes are starting at $324 less than last year and you can still protest.
  • Next year value is increased to $350,000, a shocking increase. Your maximum assessed value is now $316,800. Without the appeal two years ago and a base of $300,000, maximum assessed value would be $330,000 ($300,000 x 110%).
  • You can obtain a FREE hearing evidence package from the appraisal district. Starting 2020 tax year, they have to mail it to you without cost, even if it is available on their website.
  • Requesting this free hearing evidence package limits what the appraisal district can present at the ARB hearing.
  • People are the number one reason to protest your property taxes annually.
  • Some years the appraiser at the informal hearing will be open minded and focused on finding a win-win settlement.
  • Other years it will be virtually impossible to settle at the informal hearing regardless of the quantity or quality of evidence due to an intransient and inflexible appraiser.
  • Same for the appraisal review board. Some years will be reasonable. However, there are appraisal review board panels in some areas that vote for the appraisal district 99% of the time; two of these adjacent to Harris County.
  • The hearing evidence provided by the appraisal district within some years provide everything you need to support a meaningful reduction.
  • However, other years the hearing evidence will appear to provide a case with hope; all the sales are higher than your property.
  • You cannot get the hearing evidence package unless you protest.
  • You do not know the contents of the hearing evidence package and whether it is helpful until you protest.
  • You do not know if the informal appraiser will be reasonable or not until after you protest.
  • You do not know if the appraisal review board will be reasonable or not until after you protest.
  • You do not know the likelihood of further reduction in binding arbitration or a judicial appeal until after you protest.
  • There is no cost to protest.
  • You can protest every year regardless of whether the appraisal district raised, lowered or did not change the value.
  • You can protest market value and unequal appraisal.
  • You can also any action of the appraisal district or the appraisal review board that applies to the and negatively affects the property owner. This could include errors in grade, class, flood status, property type and other factors.
  • If you miss the normal protest deadline, you can file a substantial error (Tax Code 25.25 (d)) protest until January 31 of the next year.
  • If you are over 65, you should protest for two reasons: 1) it affects you city, county and MUD assessment. The ISD (school) property taxes are frozen when you turn 65; but not the county, city and MUD. Reason 2) It helps to avoid having unreasonably high tax assessments in the area. Accounts which are never appealed can become local outliers providing fodder for the appraisal district in arguing to sustain a value.
  • Your value cannot be increased if you protest. Not at the informal or formal hearing.
  • The 2019 Texas Legislature passed Senate Bill 2 which prohibited appraisal review board from increasing the value at a hearing. Previously, there was perhaps one account in 5000 raised at the ARB, so there was a chance of the ARB increasing the value.
  • Starting with the 2020 property tax season, the ARB can’t increase the value.
  • So, in summary, with the ability to get a free hearing evidence package by mail, an 80% chance of success at the informal and a 53% change of success at the appraisal review board hearing, why WOULDN’T you protest each year.
  • Your total investment is $0 and your payoff could range from hundreds of dollars to much larger amounts. O’Connor estimates 2019 property tax savings for clients at $95 million. Tax savings to date for clients estimated at in excess of $1 billion.
  • Please let us do our work for you. Don’t try to guess which years will be successful. We can’t do it and don’t think it is possible for you to do it.
  • You benefit by knowing everything reasonable was reviewed and analyzed to attempt to reduce your property taxes, despite the fact we fail in getting a reduction some year. As you may know, it can be a frustrating experience when it is not going well. However, we do that work in the easy years and the hard years. There is zero cost to you in years we do not succeed in reducing your property taxes.
  • O’Connor brings a team of over 100 professionals with over 500 combined years in property tax consulting. Our “Core Focus” is: improving the lives of property owners through cost effective tax reduction.
  • Your interests are aligned with our interests. We don’t get paid unless we reduce your property taxes.
  • O’Connor is passionate about what we do and clearly more aggressive than any known property tax consultant in pursuing all levels of appeal.
  • You can protest on your own and this website provides all the tips and tricks of the process. However, most owners do not protest consistently (every year). This sharply diminishes the effectiveness since you never know which years will be good. You can also get our book Cut Your Texas Property Taxes, by Patrick O’Connor, at Amazon.
  • I want to be clear. You do not have to hire us to protest your property taxes to be effective. However, you do have to protest annually on market value and unequal appraisal to be effective.

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