PROTESTING PROPERTY TAX APPRAISALS
IN TRAVIS & WILLIAMSON COUNTY
With the direction home prices and values are continuing to grow to extremes due to the lack of supply in housing to meet the immense demand, it's created a sizable tax burden to homeowner's. For those who don't know the process of protesting your county tax appraisal of your home's value, we'll go over that here. Below are some tips on how to be effective in your tax appraisal protest.
THE PROCESS OF THE PROTEST
Stage 1 - Filing Your Notice of Protest You should receive your county's assessment of your value by mail in the first to second week of April. If you disagree with their assessment, you need to file your Notice of Protest. Often, the appraisal district will provide the option to e-file your notice online. If you did not receive the option to e-file your Notice of Protest, then you'll have to mail your notice in. In either method, you select "Value is over market value" and/or "Value is unequal compared with similar properties" and write the value you genuinely believe your home is worth. In the online protest, it will sometimes give you a proposed settlement which you may find acceptable, in lieu of having to come into the appraisal district. It may take awhile to come back with an online settlement, if it does offer one. If you reject their online offer, or they don't give you an online settlement offer, then you're going into the County where you reside's appraisal district office.
*In Travis County as of late, if you efile your notice and you reject their online settlement, they send you straight to the Appraisal Review Board (more below), which is much more difficult to get a lower value. I recommend just mailing in your Notice of Protest and requesting the evidence packet of the comp sales they used to assess your value. This way, your next step is the formal protest in a cubicle with one appraiser. In my opinion, the chances of your protest falling on reasonable ears is better here.*
Stage 2 - Formal Protest You should receive by mail the notice of your appointment for your formal protest. You can reschedule it through the district office if you cannot make their assigned day and time. How this portion of the protest works is simply meeting with one county appraiser in a cubicle where you will provide them with information and comparables for why you believe your home value is not as high as they've assessed. This can include internal characteristics, such as your home has no upgrades compared to the properties they used or that your value isn't equal to others based on size and finish. Or it can include external characteristics, such as where the home is located; by an electrical field, bordering a busy road, or train tracks for instance. If your home had major repairs performed in the prior year such as a roof replacement or severe termite damage, you can also use these things as a basis for lowering your valuation by providing an invoice. If your home is in need of significant repairs, you can have a contractor put together a quote and attempt to use that to justify to the county that your home is of poor condition.
The appraiser may debate with you about the inclusion of some comparable sales you attempt to provide. You can use comparable sales from January 1st of the prior year to the current year as long as the deed has been recorded (this is usually around March 30th or so by the time you get to your protest appointment). They generally will not let you use foreclosure or other distressed sales as comparables. They will deem these sales invalid. This meeting is usually not very confrontational, so don't be intimidated. At the end, the appraiser will hopefully make you an offer. You can accept and finalize the value for the current year OR you can reject their offer which will advance your protest to the Appraisal Review Board (ARB).
Stage 3 - Appraisal Review Board The Appraisal Review Board is a more professional setting. In this stage, dressing a little nicer than casual would be appropriate. If you go to this stage, in Travis County it's scheduled for another day and time. In Williamson County, they have been doing it the same day immediately after rejecting the settlement offer in the formal protest. The Appraisal Review Board consists of three citizens (non-appraisers) who will hear your case as well as the county appraiser's. Before you begin, the board will explain to you that by going in front of the Review Board they could determine your valuation to be higher than previous settlement offers and you must agree that you understand that. They usually will audio or video record the meeting.
You and the county both supply the Board members copies of all evidence and take turns speaking, making your point/counterpoint for why you believe the value is what it is. If you enjoy a good debate, this can be quite exciting. If you're more reserved, you may see this stage as a bit more intimidating. It costs nothing to advance to the ARB stage and can be a valuable experience, win or lose.
After hearing both sides, the three board members will discuss and each individually will give their feeling as to what the value is. The head of the board members will ultimately decide if the decision isn't unanimous. The verdict is not an offer. At the end, they do not ask if you accept or reject the valuation they determine. The market value number they assign is the value you get, unless you advance to arbitration. The Appraisal Review Board is the last stage of the tax appraisal protest process that has no cost to fight.
Stage 4 - Arbitration If you still don't agree with the valuation arrived at by the Appraisal Review Board, you can file for arbitration. This can range from $450 to $1050, depending on the county and the value of your property. Most will fall into the $450-500 range. If you win in arbitration you receive all of the deposit back less the $50 Comptroller's administrative cost. If you lose, it's all gone. Once you file and pay the arbitrator's deposit in certified funds to the county, you are provided a list of arbitrators from all over Texas. Their background profiles of the arbitrators are online. Some will travel. You can have the meeting over the phone or in-person. You will select several arbitrators from the list in order of preference and then submit to the county. The county has to agree to your selection. Usually they'll be ok with your first selection, but not always.
Once an arbitrator is agreed upon, the arbitrator will reach out to both sides to set the appointment which is usually about a month out. The county's "side" is usually represented by an independent appraiser. *Note* Individual Arbitrator's may have their own way of conducting their hearings and information gathering.** In the time leading up to your meeting, you are given about 2-3 weeks to submit ALL evidence to the appraiser. You are not allowed to submit ANYTHING in the meeting that hasn't been provided to the arbitrator prior during the exchange of evidence email session. The arbitrator will submit to you the evidence given to them by the county's independent appraiser and then you are allowed to gather more evidence to submit to try to negate those findings.
Once you get to the meeting, it's simply the three of you in a pretty casual setting discussing everything. After you both make your case, the meeting ends. The appraiser then reviews everything and will arrive at a decision usually a day or so later. The process for arbitration can vary by how the arbitrator wishes to conduct the hearing process, so your experience may be different. If you still disagree with the arbitration's verdict, you will have to contact an attorney for advice on how to proceed.
TIPS FOR A SUCCESSFUL PROTEST
TIP 1 Always be prepared. If you come into any stage of a tax appraisal protest with no evidence and just hope to argue your way to a lower valuation, you will never be successful. Remain calm and courteous in the presentation of your evidence and you'll usually yield a better outcome. Consult a Realtor or someone who has the insider info on sold information. There are several tax protest companies that fight on your behalf and charge a percentage of the money they save you. However, you may want to try protesting yourself at least once to see if you can manage on your own for free. Bring as much evidence and comparable past sales as you can and know what you're arguing. Point out upgrades the comps have that your home doesn't. If a comp home has a pool and yours doesn't, point it out. If you back a landfill, let the county appraiser know about it. If you had mold consuming your walls, give them an invoice to prove it.
**Note: On AustinHomeSeeker.com we provide sold information and suggestions to fight your property tax appraisals every year to former clients FREE FOR LIFE! Just another reason we rank so highly in customer satisfaction!**
TIP 2 If you bought your home the year prior and the appraisal district is appraising higher than you bought it for, then your tax appraisal protest is usually pretty easy. You can get the value you paid by simply showing them your Closing Statement. If your goal is to still get lower than what you paid due to certain circumstances that arose with the property with damage, repairs, etc. or because you felt you overpaid, then there is no obligation to give them your Closing Statement. You can simply protest based on unequal value with others in the neighborhood and possibly use your Closing Statement as a backup.
TIP 3 You are not required to show the county all the information that you have, but also check the tax record to make sure the information they have about your home is accurate. Perhaps you don't want to show them photos of your highly upgraded interior. Simply focus on the prior sales that are better than your home and sold for less than the amount at which the county valued your home. Sometimes the county appraisal district has incorrect information. If you received a document that measures your home smaller than they had it recorded, this may lower your valuation. If they have your home with more bedrooms or bathrooms, this also may effect value.
TIP 4 You can use sold information all the way back to January 1st of the prior year! The appraisal district uses sales from the past year to determine the value for the current year. The valid sold term for the inclusion of comps is January 1st of the prior year to the current year up until the deed has been filed, which is roughly March 31st by the time you receive your original valuation. For example, on your tax appraisal for 2018 they will take comparable sales from January 1st, 2017 to December 31st, 2017.
TIP 5 Consider protesting every year. The county can raise your property tax valuation every single year. If you have a homestead exemption they are capped at a 10% rise in valuation each year. If you don't keep their assessment in check, they'll build on this one for next year. Austin has had dramatic price increases for the past few years. If they're going the full 10% each time, then protesting every year can save you hundreds or even thousands year over year.
TIP 6 File for any tax exemption that you qualify for. See Tax Exemption Info. Tax exemptions will remove part of your home's value from taxation, which in turn lower your tax obligation. You must file your exemption application between January 1st and April 30th. Once you receive the exemption, you do not need to reapply every year unless the chief appraiser sends you a new application. If a home is your principal residence than you qualify for a homestead exemption. This is the most commonly filed exemption. During the year, if you turn 65 or become disabled, you must apply for the 65 or older or disabled exemption no later than one year from the qualification date. There are several exemptions. Check with your county to see which ones you and your property qualify for.
FREQUENTLY ASKED QUESTIONS (FAQs)
In an effort to increase efficiencies and reduce cost to taxpayers in 2015, Travis CAD mailed a Notice of Appraised Value to either the owner OR to the owners Agent of Record. Travis County Appraisal District will no longer mail Notices to BOTH owners and agents. Your current value information is now available on their website. If you would like to request a copy of the notice that was sent to your agent please contact their Customer Service department at (512) 834-9138, email to email@example.com, or simply visit their office. Please have your account number available when making contact.
The chief appraiser sends out a detailed notice of appraised value to the owner of property annually. The notice of appraised value contains a description of your property, its value, the exemptions and an estimate of taxes that might be owed. Property value information is also available on the website Property Search, or by calling or visiting the Travis Central Appraisal District offices.
The current years notices of appraised value are typically mailed out mid April of each year. Values on the website are not updated until the notices have been mailed.
The district first collects detailed descriptions of each taxable property in the district. It then classifies properties according to a variety of factors such as size, use and construction type. Using comparable sales, income and/or cost data, a TCAD appraiser applies generally accepted appraisal techniques to derive a value for your property.
The appraisal district may use three common methods to value property: market, cost and income approaches.
Market – What are properties similar to this property selling for?
Cost – How much would it cost to replace the property with one of equal utility?
Income – What would an investor pay in anticipation of future income from the property?
The appraisal district must repeat the appraisal process for each property in the county at least once every three years; however, it can reappraise as often as every year if the market is active in that area.
Value changes may occur for several reasons. Often sales information may indicate the current appraised value is lower/higher than fair market. Also, corrections to appraisal records may affect value, such as, change in square footage, a pool not previously accounted for, or a correction of a property characteristic.
In order to make accurate appraisals on every property TCAD must visit them periodically to ensure that the data used in making the appraisal is still correct. For instance, the appraisal district could have received a copy of a building permit indicating that a room was being added.
A building, structure, fixture, or fence erected on or affixed to land; or A transportable structure that is designed to be occupied for residential or business purposes, whether or not it is affixed to land, if the owner of the structure owns the land on which it is located, unless the structure is unoccupied and held for sale or normally is located at a particular place only temporarily.
Fair market value means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
Exposed for sale in the open market with a reasonable time for the seller to find a purchaser. Both the seller and the purchaser know all of the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use. Both the seller and the purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.
If the foreclosed property was given an adequate exposure to the market, there was no attractive financing associated with it, the closing and repair costs were typical, and the sale is representative of its neighborhood, then it will. If the price it sold for is not consistent with the marketplace of a property with similar quality and condition, it will not.
A rendition is a statement listing taxable property and the name and address of the owner. The statement should also contain an owner's estimate of the property's value. The deadline for filing a rendition is April 15. Be sure to identify your property and attach any documentation that you may have such as closing statements, appraisals or sales of similar properties in your neighborhood.
The capitalization rate which TCAD will use in the valuation of properties with a Community Housing Development Organization designation is 8 to 9% for 2015.
In general, the appraised home value for a homeowner who qualifies his homestead for exemption in the preceding and current year may not increase more than 10 percent per year.
The Property Tax Code sets a limit on the appraised value of a residence homestead, stating that its appraised value for a tax year may not exceed the lesser of the market value of the property; or, The sum of : 10 percent of the appraised value of the property for last year; The appraised value of the property for the last year in which the property was appraised; and The market value of all new improvements to the property, excluding a replacement structure for one that was rendered uninhabitable or unusable by casualty or by mold or water damage.
The appraisal limitation first applies in the year after the homeowner qualifies for the homestead exemption.