It sounds daunting to protest your property taxes. The taxing authorities are intimidating and that’s no accident. They have earned their reputation as bullies by endless red-tape, stacks of official documents, and a foreign terminology. Still, you should not let that keep you from protesting your tax appraisal. It will take some time out of your schedule, but it can potentially save you thousands and it helps keep the system in check. After successfully protesting our taxes every year, I wanted to share some tips and details on the process.
If everyone protested their taxes every year, values would be lower and more accurate. Year after year, I protest our taxes (and have always been successful), and the appraisal district’s top arguments against me are homes that are appraised well over what they could sell for by homeowners who never protest. It keeps the system in check, making it more fair and honest if you appeal every year. It will take an afternoon or two out of your life + some time to research, but it is well worth it for the money saved as well as contributing to a process that would be a runaway freight train without citizens who take the time to protest their appraisals. “Protest” makes it sound so official and ugly, but really it’s just a meeting or two where a value that your property taxes will be based on is agreed upon. It has much less to do with what your home is worth in the market and what you could sell it for. For that, speak with a Broker and not the Tax office. Even if you “like” the value they put on your home, you could be leaving money on the table and unfairly swaying neighborhood values. It will not have an effect on what you can sell your home for.
- File a protest every year just before the May 31st (Travis County) deadline
- Don’t eFile your protest
- Request all of their documentation in your “packet” & do your research at www.traviscad.org
- Request the latest hearing appointment in the year as you possible can
- Use the “Equity Approach” by using similar homes in your neighborhood that are appraised for less than your property (not sales data)
Don’t be intimidated by the process
It’s much easier to ignore the mail or let yourself feel good about the high value they put on your house – “it’s worth more, yay!” (but really, it’s not). Whether you’re selling soon or not, it’s costing you big money to let that high appraisal go. Protesting is simple. In Travis County, you just fill out a few lines on the back of the form they send you (make a scan or copy for your records!) and mail it in. Don’t put what you think the value should be yet, just get this form mailed in by the May 31st deadline. Then you wait for a date for an informal hearing.
Tip #1: Check the “Value is unequal compared with other properties” box, this refers to the “Equity Approach” in determining your appraisal value which experts will tell you leads to much higher success rates.
Tip #2: Mail this last minute. The deadline is May 31st, consider mailing it May 27th or delivering it on May 31st. You want the latest possible hearings (keep reading for why).
Tip #3: Ask for every extension and every piece of documentation. Separately. To slow things down. Slow and steady wins this race.
If it gives you major anxiety to even consider taking this on yourself, hire a firm to do this for you. They will handle everything and typically charge based on what they save you. So, if they lower your tax bill from $10,000 to $9,000, their fee will be a percentage of the $1000 the saved you. The best known firm in Austin for handling Appraisals is Texas Protax Austin, Inc., 512-339-6671; email@example.com. Currently, they charge 40% of what they save you, so in this scenario, you would owe them $400 and you keep the $600.
Don’t bother with the online protest eFile
They may offer you a pittance, but it’s not worth your time. This is the quickest and easiest way to protest, but it also means that you’re first in line. Your neighbors haven’t argued their values down yet so your argument is based on higher values. The staff is still fresh and ready to argue with you. They’ve been through this before are ready to go. This is the 1st Quarter of the game. Wouldn’t you rather come in fresh when they are winded at the end of the 4th?
The informal hearing
Watch your mail for a letter from the tax office. They will assign you an informal hearing date. At this time you want to request your packet which will have a spreadsheet and details on the homes they have selected as com parables to your own. They may not be very comparable at all, in which case you need to make an argument for which one should be comparable. They will want them to be close in proximity, age, and size. You will need to do research on those homes and any others you want to use.
Request your informal hearing be rescheduled to as late a date as possible. This, again, is so that the comparable homes have already had their values argued down and you are coming in fresh at the 4th quarter when the appraisal district is ready for the final whistle to be blown.
Your Realtor can help you, but ask them to pull tax data, not sales data. This data is public record so you should be able to pull it from the Tax Office’s website (Travis County is www.traviscad.org). Your first reaction may be to ask your Realtor for sales comps, but there are two approaches for calculating your value: Equity Approach and Sales Approach. The equity approach is well know for leading to much more success. The Travis County Appraisal District does not officially have access to MLS, but they do. They have access in two ways: unofficial cooperation with Brokers & through MLS data brought in by protesters. Assume that they already have this data. You aren’t bringing any new information in. These values are more subjective than you’d think in the tax office. Your tax appraisal should be the market value, but unlike a Realtor pricing your home, they are much more concerned with data other than sales.
Instead, focus on the Equity Approach. This takes precedence over the sales data at the appraisal office when you can demonstrate that your home is overvalued relative to “a reasonable number of comparable properties appropriately adjusted”. You should use this approach at your (rescheduled) informal hearing or formal hearing if you opt to go straight to the big leagues (which most experienced protestors do, but the informal can give you some experience with the process).
Go in with a value at which you will leave happy. If you get this at your informal hearing, you may want to accept and move on. Most of the time, you will have better results with the formal hearing. After going to many of these, I can tell you that going in with a polite, cooperative attitude will get you much further than an argumentative, fiery attitude. The person you meet with at the informal hearing has been yelled at all day. They know the system well and can help you if you come in with a “help me understand how they came up with this figure when these homes on my street are valued at $X”, but not if you come in with a “this is B.S., you’re stupid, fix this now” attitude. They’ve also been dealing with all sorts of people all day, all week, all month. A little empathy & kindness will go a long way.
Be sure to also check your construction class. It’s a number that may look like “4-” or “5+”. Make sure yours is the same as your neighbors. If it’s higher than your neighbors, you need to find out why and if it’s a legitimate reason. If it is, you’ll need to research construction classes & come in with google maps & other images showing why your home should be like homes A, B, & C; not D & E.
Check for other errors, like size. Do you have an appraisal or other records that show a different square footage measurement for your property? If your record shows a lower value, bring this in. If it shows higher, leave it at home. Often, simple errors cost taxpayers big money. When TCAD employees come out and measure your home (and they do make unannounced house-calls, even coming into your backyard unannounced), they are measuring around the outside and doubling it if you have a 2-story. They do not know that most of that 2nd floor is vaulted ceiling or attic.
The formal hearing
It sounds so official and “formal”, but it’s just a name. At this hearing in Travis County, instead of meeting with one TCAD employee at their desk, you will meet in a room with 3 members of the public and 1 TCAD employee. You argue your case, the TCAD employee argues the Appraisal District’s Case, and the 3 individuals decide on the value of your home. Again, you don’t want to come in hot & heavy to this meeting. Come in with copies of your data for each member of the panel and present it in a clear and concise way. You have as much time as you need. You will have to wait a bit because your appointment time is really a suggestion since everyone is allowed to take their time presenting their case. Bring a book and never feel rushed or pressured. It’s all just business. Get an appointment as late in the year as possible, just before they blow the whistle. Your neighbors will have their values argued down so you will be using lower values in your Equity Approach arguments and you should get the lowest number possible. Don’t forget to update all of your data just before your hearing. Hopefully your neighbors have had some success reducing their appraisals.
Property Taxes in Texas are big. You may be leaving thousands on the table if you don’t protest your taxes every year – not just your own money but also your neighbor’s. Keep the system in check and protest every year either yourself or by hiring a firm to do it for you!