John A. Hay III, Managing Partner
Property values in Central Texas and all across the State continue to rise, so what does this mean for your ad valorem taxes, commonly referred to as property taxes? It means that the appraised value, by which the County derives your tax bill at the end of the year, is likely higher than it was in 2015.
How is this calculated? What can I do about the valuation? Below is a brief summary of the process related to Travis County, which is the same throughout Texas counties.
First, how is the value of your property determined?
The county’s appraisal district calculates the value. In Travis County, the Travis Central Appraisal District (“TCAD”) website is where you can search for values and other information for properties, as well as gather forms and related information from TCAD. Their website is informative and easy to navigate, but be aware many counties are behind the curve.
The appraisal district is charged with valuing property and generally their information comes from a few places. In Travis County:
- -TCAD monitors recorded documents as they are posted with the Travis County Clerk. These include your deed and deed of trust among other things. It is important to not place the sales price in a deed, which sometimes is done in a cash situation.
- -Then TCAD uses its own eyes, through monitoring of building permits and improvements, to set values based on its own observations.
Note: When you buy a property, TCAD will send you an information statement asking you to disclose what you paid for the property. YOU ARE NOT REQUIRED TO COMPLETE THIS FORM and I suggest that you rarely do, as it provides unnecessary information that may be used to your disadvantage down the road.
With all that being said, the values are set by applying blanket factors or codes relating to the property such as lot and structure size, neighborhood, condition, proximity to freeways, and green space – just to name a few, stirring them in a big pot, and out comes your value.
As improvements are made or codes for the neighborhood are changed, so does the method by which your appraised value is calculated. Thus, sometimes you may see a large jump or decrease in your value that on the face may not look to be commensurate with your perception of the value.
Second, how do I fight or correctly termed, PROTEST, the value placed on my home by the appraisal district?
Time is of the essence as most protests need to be filed by May 31st or no later than 30 days after the appraisal district mailed you a notice of appraised value, whichever is later. The filing of the protest is fairly simple.
First, complete the Protest Form and be sure to indicate your correct appraisal district on the top of page one. With this protest you only have to complete the minimum information, as rarely does the County simply change your value based solely off the information completed here without at least an informal hearing.
Once you complete the protest form, next gather all your data and information to present your case. You will be notified of the date for both an informal and formal hearing date.
The informal hearing is just as it sounds – you sit down with a representative of the appraisal district and discuss your value and upon agreement, settle on an agreed value. You are not required to go to or notify the county if you will/will not attend the informal hearing.
The next phase – if you do not settle or attend the informal hearing – is the formal hearing.
- -Here, a panel of three people who serve on the appraisal review board acts as the “judges” to conduct the proceedings, listen and to and weigh your evidence, the evidence and rebuttal of TCAD’s appraiser, their own observations, personal knowledge and other factors to decide on a value, including deciding not to change your value.
- -This value is made up of the value of the land and improvements, both of which combine to be your appraised value.
- -Generally, the county is hesitant to make changes in the land value, so you likely will see a change in the improvements.
Should I hire a professional to handle my affairs as related to a property tax protest?
As different firms operate in different ways, ultimately you need to decide if you think that a professional can get the same or better results, without you spending the hours it takes to complete the protest process.
Some firms provide their services at a flat fee value while others charge a % of your savings. You should weigh your goals and the experience and approach of each organization to decide what is best for you.
Important – each property and matter is different and there is no way to predict results. Should you hire someone to handle your property tax protest, you would complete the Appointment of Agent form and indicate your appraisal district on the top of the form.