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Property taxes
represent a substantial expense for
Texas homeowners, averaging about
$3,200 annually. To reduce this
expense, property owners should
annually review and consider
appealing property taxes. While
there is no guarantee that an appeal
will be successful, a recent survey
indicates that 70% of property tax
appeals are successful.
Property taxes tend to be a hidden
tax. Although homeowners write the
check, including taxes and insurance
monthly, the property tax component
is not evident. The property tax
component can become quite evident
when the homeowner is asked to fund
a deficit in the escrow account.
Although 70% of property tax appeals
are successful, only 2% of
homeowners appeal each year.
Research indicates five primary
reasons homeowners do not appeal:
●The
process seems overwhelming and they
do not know how to appeal,
●They
do not think an appeal is likely to
be successful,
●They
think their home's assessed value is
below market value and there is no
basis for
appealing,
●They
do not understand they can appeal on
unequal appraisal,
●They
are busy and do not want to set
aside time, given the presumption
that "you can't fight city hall".
●Why
appeal?
Consider an appeal for a $150,000
house where the property taxes are
reduced by 5%. This would reduce the
assessed value by $7,500 and the
property taxes by $225, based on a
3% tax rate. Since the typical
appeal hearing takes less than an
hour, these are meaningful savings
for the time involved. Regularly
appealing your property taxes will
minimize the value, so you are
assessed for less than most of your
neighbors. Most of the property tax
appeals are resolved at the informal
hearing, which is the first step in
the process.
How to appeal
The first step to appealing annually
is to send a written notice to the
appraisal review board (ARB) for the
county in which your home is
located. Even if you have not
received a notice of assessed value
from the appraisal district, file a
notice of appeal by May 31st for the
following reasons:
●The
notice of assessed value can get
lost in the mail,
●A
notice of assessed value is not
necessary unless your assessed value
increases by more than $1,000, and
●You
should appeal annually
You can file a notice of appeal by utilizing the
Comptroller's form available at
www.PropertyTaxWatchdog.com or by
sending a letter to the ARB. The
letter to the ARB simply needs to
identify the property being appealed
and the basis for your appeal. You
should always appeal on both market
value and unequal appraisal. Since
the appraisal district staff is
extremely busy during late May and
early June, sending any data on the
value of your property tax is
probably a waste of time. At the
same time you send your notice of
appeal to the ARB, send a "House
Bill 201" request to the chief
appraiser at the appraisal district.
The House Bill 201 request will
provide you a volume of information
at a modest price.
Reasons for obtaining House Bill 201
information
Since most homeowners are not
familiar with House Bill 201, you
may be wondering what it is and when
it became available. House Bill 201
is the term used by property tax
consultants and appraisal district
staff to describe provision 41.461
of the Texas Property Tax Code. This
section reads as follows:
"at least 14 days before hearing on
a protest, the chief appraiser
shall: … inform the property owner
that the owner or the agent of the
owner may inspect and may obtain a
copy of the data, schedules,
formulas, and all other information
the chief appraiser plans to
introduce at the hearing to
establish any matter at issue."
The property tax code further
provides the chief appraiser the
right to charge up to $15 for each
residence, and up to $25 for each
commercial property owner for this
information. However, there are
limits on the cost per page an
appraisal district can charge.
Practically speaking, the maximum
charge is $1 to $2 for a residence.
In Tarrant County, and most larger
populated counties the homeowners
can print this information from the
appraisal district's web site once
an appeal has been filed.
This section of the tax code was
added in 1991, but many appraisal
districts have attempted to ignore
this section of the property tax
code for years and some still do.
After discussing this section of the
Texas Property Tax Code on a radio
show in 2005, several listeners
called back a week or two later to
report certain appraisal districts
were claiming to be unaware of this
section. It is surprising that
taxpayer friendly legislation has
been passed, that appraisal
districts are still ignoring
property owners and tax consultants
who ask for this information.
There are at least seven reasons to
utilize House Bill 201 to obtain the
information the appraisal district
will use at the hearing:
●It
is an effective way to obtain
information regarding both market
value and unequal appraisal for your
property tax appeal,
●You
will receive the appraisal
district's information regarding the
size, condition and other
qualitative and quantitative data
for your house,
●The
information can be obtained for a
nominal cost,
●It
is helpful to know what information
your adversary will be able to use
at the hearing,
Making the request limits what
information the appraisal district
can present at the hearing.
●If
you do not request their information
prior to the hearing, they can use
any information available to them at
the hearing. However, if you request
the appraisal district information
using a House Bill 201
request, they may only use
information previously provided to
you,
●If
they do not provide you information
on market value or unequal appraisal
in the House Bill 201 request, you
win by default at the ARB hearing,
and
●In
many cases, the appraisal district
House Bill 201 information clearly
supports a lower value.
●Preparing
for the hearing
When you receive the appraisal
district House Bill 201 information,
start by reviewing the appraisal
district's description of your home
and ask yourself these questions:
Is the year built accurate?
Are the qualities and amenities
accurate?
If the appraisal district overstates
either the quantity or quality of
improvements to your property, this
is an excellent means to reduce your
property taxes both for the current
year and subsequent years.
Filing a 2525c Appeal
If the appraisal district has
overstated the size of your house by
more than 5% to 10%, even if you did
not file a property tax appeal in
prior years, you should consider
filing a 2525c appeal. This will
allow you to reduce the assessed
value of your property for the
current year and for prior years.
Read more about Preparing for the
Hearing.
Read more about The Hearing Process.
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