Every year, Texas property owners anxiously await their property tax appraisals with baited breath. Sometimes, those valuations go down. But more often than not, they go up and homeowners scramble to find ways to protest those valuations. After all, with increased valuations, comes increased tax burden, and the only time property owners want to see increased value is when they’re ready to sell. Here’s our short and sweet guide on how to protest property tax appraisals.
Audit Your Property Tax Record
Prior to protesting your tax valuation, you should perform an audit of the tax profile on file with the county appraisal district in which you live. The county tax profile is the official record of your property and details the specifications about your home with which the appraisal district uses to estimate it value. It’s important to make sure there are no errors in your tax profile including, but not limited to:
- Lot Size
- Square footage of the home
- Number of Bedrooms
- Number of Bathrooms
- Number of Garage Bays
- Year Built
- And any other improvements such as pools, sheds, outdoor kitchens, etc.
And lastly, if appropriate, you should ensure that you have applied for, and received, your Homestead Exemption, as well as any other exemptions such as disability or the over 65 exemption if applicable.
Apply for Exemptions
Property tax in Texas is locally assessed and locally administered. You won’t find a State of Texas taxing entity on your tax record, but you will see entities such as school districts, mud districts, local counties and cities, as well as emergency services, and more. Each community is unique, which means the homes within those communities will have a unique list of entities to which tax is due.
These taxes make up the lion’s share of the money needed to fund schools, roads, police and firemen, emergency services, as well as capital improvements such as libraries, parks, and community centers.
State law provides for mandatory Homestead Exemptions for property owners and their PRIMARY residences. In addition to saving you money on property taxes, the exemption also provides for some additional protections. Check out our video and learn ALL about Homestead Exemptions here.
Exemptions from property tax nearly always requires an application. These applications are filed with the county appraisal district and are due by May 1st. Appraisal district Chief Appraisers are responsible for determining whether or not property qualifies for an exemption.
Compile Your Supporting Facts
If you are planning on protesting your tax appraisal yourself, you’ll need to compile some data to make your arguments. If however, you are planning to hire any number of tax protest consultants, they’ll handle this work for you. Keep in mind, they typically charge 50% of whatever tax savings they’re able to secure on your behalf. Over the years, we’ve had about a 70% success rate protesting our valuations ourselves, so decide for yourself what works for you.
Obtain Sales Comps
The first step in compiling your supporting facts is to obtain sales comps for your home as of January 1st. Although tax notices aren’t usually sent until April, Appraisal Districts base their valuations on home values as of January 1. Reach out to an experienced real estate agent and ask for their assistance in obtaining a list of comps, and be sure to let them know you’re needing them for tax protest purposes. We’ve offered this service free of charge for over a decade, so feel free to request yours online below.
Identify Similar Homes
In any given neighborhood there’s a pretty good chance that there are multiple homes that are the same model as yours. If you can identify them, and prove to the appraisal district that they valued those homes cheaper than yours, it makes a strong argument for yours to be adjusted downward.
Finding them is not always easy, but with a drive through your own section of the neighborhood, as well as the sections immediately surrounding yours, you’ll likely be able to identify homes that look largely identical. You can then search the appraisal district’s website for those properties, verify the details, and verify the builder name under the deed history. Look forward close matches and use those as your argument for a downward adjustment.
Detail Needed Repairs
Photograph and document any deferred maintenance items around your home as well as the approximate costs to repair them. With the flooding, freezing, and wind storms we’ve had lately, it’s a perfect opportunity to take advantage of the repairs you haven’t handled yet.
Downed fences, dead landscaping, busted pipes, drywall damage, flood damage. Even just deferred maintenance items like the front and rear doors that your dog tore up, heavily stained carpets, and broken wood and tile flooring, roof damage.
Document it all, estimate your repair costs, and provide detailed photos as part of your protest. These types of repairs can have a significant impact on valuation.
Many homes have little oddities that can affect their true market value. Do you back to a commercial development? Do you back to heavily trafficked road? Do you have a tiny lot, or a weirdly shaped one? Do you have power lines or transformers littering your yard?
These ALL affect the resale value of your home and should be pointed out to the appraisal district during your protest.
For New Owners & Those Who Have Refinanced
Now, if you purchased your home or refinanced it in the six months leading up to January 1, you should have some documentation that will be of great assistance in your protest.
If you recently purchased your home, you should have a Settlement Statement from your closing. It’s typically 3-5 pages, and contains information on the buyer, seller, lender and title company and shows the breakdown of all the expenses and credits from your closing. In most cases, appraisal districts will accept this as proof of value and reset your assessment to the amount your paid for your home.
If you recently refinanced your home, you should have a long-form appraisal that you can also use as proof of value. Professionals appraisals are much more in-depth than the county’s automated desktop appraisals and should be sufficient to argue the value of your home.
Download our FREE Guide
24 pages full of information on how to prepare and present your protest for the best results.
Now, keep in mind, I am NOT a professional appraiser, and make no claims to be one. The information I’ve shared above is what I’ve come to learn after decades of fighting my own tax appraisals, as well as my experience as a professional Realtor for the last 16 years.
It is my opinion that everyone should closely review their tax appraisals every year and protest them if it makes sense. Remember that your valuation each year sets the basis by which it can be increased next year, and we’ve seen far too many homeowners ignore their assessments only to find their home has been wildly overvalued for years.
Have more questions? Feel free to reach out to me at email@example.com.