Are you shocked by your high Texas Property Taxes?
It’s soon again going to be that
time of year to fight your property taxes. If you are not fighting your
property taxes you are paying more than your fair share. As home values
increase so do property taxes. In 1999 the average tax valuation in the City
of Dallas was $76,139. In 2006 the average was $131,264 an increase of 75% over
those years with the underlying base tax rates increasing 9%, a shocking
increase.
The remedy for ballooning property taxes: Appeal your
assessment.
As a matter of principle I fight my property taxes every
year and usually manage to eliminate the proposed increase altogether. The
process for fighting your taxes is simpler than most people realize. At the end
of April, notices of property tax appraised value will begin to be mailed by
the Dallas County Appraisal District (DCAD). After May 1st you can
begin the process to protest your taxes. There are up to six steps you may take
to fight and reach a new agreement with the appraisal district.
Step One - Establish your
basis for your claim.
There are many reasons to protest your taxes. The two main
reasons are that your proposed value is unequal compared to other similar
properties and/or the proposed value of your property is too high based on the
condition of your property. The other reasons are kind of recording errors; a
claimed exemption was not applied or denied, incorrect owner, wrong tax
district, your recently purchased your home for less than the valuation, change
in land use etc.
Step Two - Compile your
evidence.
For a protest based on the condition of your property you
need contractor estimates and pictures. The best basis for this claim is
foundation and other structural problems. In Dallas County, the appraisal district
rates properties by their condition. A structural problem can award you the
lowest rating. Getting your rating changed from excellent to poor could
possibly reduce your property taxes by up to 1/3 of the total value. Fighting
your taxes on the basis of condition is the easiest way to get your taxes
reduced. All houses have problems that reduce its value. Make sure DCAD is
taking these into consideration.
For a protest based on unequal valuation you use tax and
historical sales to identify properties that are taxed unequally. For
instance, if your property is appraised at 100% of market value and similar
properties are appraised at 90% of market value, then you have a right to
protest your value based on the Appraisal District’s failure to appraise equally
and uniformly. To reach this conclusion get the historical sales information
from a realtor that gets it from Multiple Listing Service (MLS). Find
comparable houses that support your argument and use these for the evidence. If
you recently purchased your home for less than its valuation use your closing
records to support your protest.
Step Three - Request a
hearing
To appeal your valuation you must request in writing a
hearing in front of the Appraisal Review Board (ARB) by the end of May. The ARB
is composed of three citizens appointed by the chief appraiser that are fair
and impartial (Ha!). The procedures for requesting a hearing are provided with
your tax notice.
Step Four - Request DCAD
to provide you their evidence
You have the right to review the evidence DCAD plans to use
to support the valuation they have assigned to your property. To get this, you can
request it in writing 14 days before your ARB hearing. This will guide you in
your selection of properties for your counter claim.
Step Five - Go to the
hearing
When you go to the hearing you are given 10 minutes to
present your evidence. Make sure you have three copies of everything you have
to hand out. If you have evidence you don’t need to talk much and it will get
you very far. If you plan to talk and don’t have written evidence you won’t get
much of a break from the ARB. These hearings are usually completed by the
middle of July.
You can also request an informal review with appraisal
district staff. The appraisal district encourages all taxpayers to try to
resolve their issues with an appraiser prior to their formal ARB Hearing. You
should be prepared to present the same evidence that you would at a hearing.
The Appraisal District has an informal manner of settling
tax issues without going to the ARB for a formal hearing. You may talk to an
appraiser up until the day before your hearing, if you have filed a protest. If
you have not filed a protest, you may discuss the value until May 31 or thirty
(30) days after you received your Notice of Appraised Value. If you are able
to resolve your issue prior to the ARB Hearing, then there is no need for an
ARB Hearing. However, if we are unable to resolve your issue, then an ARB
Hearing is needed.
Step Six - Request Binding
Arbitration
In 2005, the Texas Legislature gave property owners a new
tool for the protest process--Binding Arbitration.
For more than 25 years, Texas property owners had one way to
protest and appeal local appraisal district property values. The owner had to
protest the matter to the local Appraisal Review Board (ARB) and, if still not
satisfied, then appeal to state district court in the county where the property
was located. Now, things have changed. Binding Arbitration offers a much more
affordable and less intimidating way for a property owner to appeal an ARB
order which the owner contests.
You can request Binding Arbitration by submitting a request
form and $500. If the arbitrator rules in your favor you get $450 of this back.
In this hearing you will probably present the same evidence. The exciting
thing about Binding Arbitration is that the Arbitrator is not affiliated with
DCAD in any form or fashion. To become an Arbitrator you must be a licensed
realtor or appraiser, complete 30 hours of training, and register with the
State of Texas. This process is new this year and could really have a
favorable impact on property tax valuations because of the impartiality of the
Arbitrator combined with their background.
In summary, if you are not fighting your taxes you are paying
more than your fair share and doing a disservice to yourself and your
neighbors. Fight your taxes – it’s your right to do so.
Regards,
Tod G. Franklin
DFWCityhomes.com
Buying or Selling a Home? Call Tod Today at (214)
207-0210.