All property owners have the right to protest their property taxes every year. Whether you live in Montgomery, Harris, Fort Bend, Waller, Galveston or Brazoria counties, you should take the proper actions to protest your property tax appraisal.
Each year you don’t protest, will exponentially increase your assessed property value to inflated values that no longer mirror the true market value. This means you’ll be paying higher taxes based on the higher assessed value, when that value isn’t really an accurate representation of your home value.
Curious about the various important details and processes, on how to protest property taxes in Houston, Texas, to help you fight and win?
Follow along below.
According to the State of Texas, appraisals should be mailed by April 1. You then have until May 15, or within 30 days of receipt, to file online or mail your protest. Most counties have simplified the process and allow online protests. I recommend online protests, as it allows you to formulate your protest easier with fact based evidence. If you are not able to informally resolve your protest with the CAD or County Appraisal District, you will then be assigned a date and time for your formal protest hearing via the ARB or Appraisal Review Board.
ARB or Appraisal Review Board
The ARB is an independent board of citizens that hears and determines protests regarding property appraisals or other concerns listed below. It has the power to order the CAD to make the necessary changes based on evidence heard during the ARB hearing.
What is the Difference? Assessed and Market Value
It is a common misconception that Assessed Value and Market Value are the same. Many homeowners are paying more taxes than they should because their Assessed Value is too high.
Assessed Value is based on the county appraisal, while Market Value is realistically what your home would sell for, based on comparable sales in your neighborhood. Put simply, the Market Value of a property is the amount of money a buyer will pay for it. This is the evaluation method real estate agents use when determining a list price for a home. The Assessed Value of a home is rarely the same as the Market Value and involves the use of a complex set of calculations to determine property taxes. The Appraised Value of a home is determined by a professional appraiser, to ensure that the home is selling at or above Market Value before lending on it. If you protest successfully, your Assessed Value and Market Value will be equal.
Property Tax Exemptions
To keep the explanations simple, we will be referencing the 2019 tax year. Property taxes are paid in arrears, so your 2019 taxes are paid in 2020. Your 2020 taxes will be paid in 2021. Exemptions are very important as it saves you money in paying taxes. You will be able to file these exemptions via your CAD or County Appraisal District.
Make sure all possible exemptions are attached to your home, some options & highlights include:
Residence Homestead – The property must be your primary home. This puts a 10% cap on how much the district may raise your value. So, if last years value was $200,000 and they raise your value to $250,000. The homestead will cap the increase at max 10% or $220,000. In order, to take advantage of this exemption, you must be in the property for the entire tax year. For 2019 taxes, it is important to be moved in prior to January 1, 2019. If you move in on January 2, 2019, you will need to wait an entire year to homestead.
Age 65 and Over – This provides a tax ceiling on school taxes.
Veterans – If you are a disabled veteran, uou may have zero tax liability.
For more details on each exemption, check out the following: https://comptroller.texas.gov/taxes/property-tax/exemptions/index.php
You may follow these appeal procedures if you have a concern about:
- The appraised (market) value of your property;
- the unequal value of your property compared with other properties;
- the inclusion of your property on the appraisal records;
- any exemptions that may apply to you;
- the qualification for an agricultural or timber appraisal;
- the taxing units taxing your property;
- the property ownership;
- the change of use of land receiving special appraisal;
- failure of the chief appraiser or appraisal review board (ARB) to send a required notice; or
- any action taken by the chief appraiser, county appraisal district (CAD) or ARB that applies to and adversely affects you.
Steps to Win Your Appeal
In order to win your appeal, it is important to keep emotion out of the process. Be straight to the point and provide fact based evidence to support your appeal. Follow this link for an example of a letter which will help you formulate your appeal: https://www.needhelppayingbills.com/html/property_tax_appeal_letter_exa.html
The following are the typical steps to help formulate your protest.
Step 1 – CMA or Comparative Market Analysis
Get in contact with your favorite Realtor and obtain sales for 2019 for homes in your neighborhood that are similar to yours, in size, age and lot size. This is also known as a CMA or Comparative Market Analysis. Try to keep it to 2019 sales, as your taxes are based on the 2019 tax year.
You will need the average price per square foot. Your average price per square foot is then multiplied by your homes square footage to obtain market value. You will then attach to your protest or bring to your hearing.
Average 2019 Home Sale Sold Per Square Foot = $100 sq.ft
Average 2019 Home Sale Sold Size = 2,500 sq.ft.
Equals = $250,000
If your county appraisal indicates your home size is 2,500 sq. ft. and the value is $300,000, your CMA will provide evidence showing the county is valuing your home too high.
Step 2 – Certified Appraisal from an Independent Appraiser
You have the ability to hire an independent appraiser to provide an appraisal on your home, if you feel the CAD is unfairly appraising your home. Prices run around $500 per report. This is important in many ways, as this is another piece of evidence for your protest.
Step 3 – Check for Errors
You will then use the appraisal to make sure all data on the county website is correct. Double check the square footage, number of bedrooms and bathrooms and any piece of data that may affect your home value. If your square footage is too high on CAD, you are paying unnecessary property taxes. You will then attach to your protest or bring to your hearing.
Step 4 – Check Your Property Classification
Most counties have a property classification guide, which essentially rates the build quality of your home. For example, Montgomery County has a system with Classes 1 – 9. The higher the class, the higher the perceived build quality, the higher the taxes.
I have provided the guide, so that you may compare with your own home.
Another tip is to compare with your neighbors, to ensure you are being compared equally and fairly. For example, If your home is classed at a 7 and believe you are a 6. Find the sold comparable or take pictures of your neighbor’s homes showing the class differences, you will then compile this data into documents, in order to, reduce your property class. If you can justify a reduction in classification, you will reduce your taxes. You will need to attach this evidence to your online protest, or bring it to your hearing.
Step 5 – Obtain Quotes & Notate Property Repairs
If you need a new roof, have foundation issues, need pool repairs, or require a new Air Conditioning unit, for example, obtain quotes from licensed vendors. You can then use these quotes to reduce your property value. Think about the list of repairs someone would request from you, if you were to sell your home. They would try to use these repair costs to reduce the market price. For example, a new roof is $10,000. Your home is valued at $250,000. You then may request your property value be reduced to $240,000.
Step 6 – Utilize HB 201
Ask for evidence. The state property tax code requires the chief appraiser to provide homeowners the “House Bill 201 package,” information the district plans on using at the hearing to show how it determined a property’s value. State law says you must send a written request at least 14 days before your protest hearing. Drop the request off in person or mail it to the CAD. For more details: https://texas.public.law/statutes/tex._tax_code_section_41.461
Step 7 – Leave the Emotion out of your Argument
During your informal and formal protests, remain positive, firm and amicable. You will get the desired results you seek, if you treat the opposing side as you would want to be treated. The more professional and prepared you appear, the better your results will likely be.
If you’re not happy with the board’s decision, you can file a Judicial Appeal or, if you’re protesting market value, you can request binding arbitration.
If you have any questions or need help on How to Protest Property Taxes in Houston, Texas, please reach out.
I was able to reduce my property value over $100,000 by using this method.
Your High Performance Realtor