Property Tax Appeal: How to Protest Property Taxes in Texas
In the absence of a state income tax and an average sales tax rate below the national average, Texans pay some of the highest real estate taxes in the country in order to support education, maintenance, and essential services. However, the Texas Tax Code and the state's constitution grant taxpayers the right to challenge appraisals that exceed fair market value or otherwise differ from valuations for comparable properties.
Read on to explore reasons to protest property taxes in Texas, learn how to gather evidence and file an appeal, and discover tips for navigating hearings before the appraisal district for your county.
Reasons to Protest Property Taxes in Texas: When Should You Appeal?
Texans may file an appeal or formal protest of their assessed property taxes with the appraisal review board in the county where the real estate is located. Objections can be filed for several reasons, including changes in the property's fair market value or in response to inflated appraisals, particularly when compared to similar properties in the area.
Appeals can also be initiated in response to the denial of specific exemptions, for agricultural or timber appraisals, when there’s been no notification of changes in property value, or when there have been significant changes to a property's intended use.
Such protests are to be filed by the property owner of record as of January 1 of the tax year. In cases of leased properties where the lessee pays the annual property taxes, the lessee may file an appeal if the property owner chooses not to.
Before filing a protest, any assessed property taxes must be paid in full. Filing an appeal does not relieve property owners from their liability, nor will it prevent the accrual of penalties and interest should taxes become delinquent.
Do Your Research: How to Protest Property Taxes and Win
To increase the chances of a successful property tax appeal, Texas property owners should be prepared to gather evidence supporting their protest. One of the first places to start is with the appraisal district's property record. Property record cards are typically available from the district office. However, much of the information can be found online through the appraisal district website for your county.
Property records hold information like lot size, structures, and improvements. Check for any discrepancies in square footage, bedroom or bathroom counts, and anything else that differs from the property's actual condition. Errors in the property record form a practical basis for winning an appeal.
Comparing a property's appraisal against comparable real estate in the area is another place for property owners to find cause for appeal. Neighboring parcels of similar size and structures that appraise for less might also be the basis for an effective protest. Your realtor is a good resource for finding information on comparable properties.
Among other reasons to protest property taxes in Texas is the existence of any damage or changes that would negatively impact the property's value. If your home needs repairs, get contractor estimates to support those costs. For example, the need for roof or foundation fixes is solid evidence for a property tax protest. Remember, though, that anything occurring after January 1 will have no bearing on the appeal hearing.
How to File a Protest
Most Texas counties allow property owners the option to e-file their property tax protests online. County appraisal district websites that support e-filing typically send immediate confirmation that the objection has been successfully filed. Once the appeal has been reviewed, the appraisal district will respond with an adjustment if warranted. Property owners can choose to accept the adjusted value, resolving the matter immediately. If adjustments are not offered, or a satisfactory settlement is not received, property owners may schedule a hearing before the appraisal review board.
Otherwise, protests can be filed by mail, and specific Texas property tax forms are required to initiate an appeal. Instructions for protesting property taxes are typically included with the appraisal notice from the county. The process usually starts with the Property Owner's Notice of Protest, Form 50-132 (or Form 50-132a for smaller counties).
Residents choosing to contest property taxes in Texas should be aware that protests must be filed no later than May 15 or 30 days from the date of the appraisal notice. Exceptions to this deadline may be granted in certain situations, particularly in instances where appraisals are egregiously higher than fair market value, appraisal districts failed to send required notifications, or clerical errors need correction.
The Informal Hearing: What to Expect
Property tax disputes in Texas are most frequently resolved through the informal hearing process. After a tax protest has been filed, the appraisal district will notify the property owner of the date and time for a scheduled meeting. This is usually a short sit-down with a staff appraiser at the district office. Property owners are given a chance to present any evidence supporting their position for an appraised market value reduction. They are also allowed to review any evidence the appraisal district may have supporting their assessment. Upon completion of the hearing, the appraiser may make a settlement offer for a reduced property assessment. It's also possible that the appraisal district could refuse any adjustment at all.
Property owners who do not receive a satisfactory outcome from the appraisal district through the informal hearing process will be granted the opportunity for a formal hearing with their county's appraisal review board.
The Formal Hearing: the Appraisal Review Board
In the event a property tax appeal isn't resolved through the informal hearing, a formal hearing before the appraisal review board may be necessary. Such formal meetings, sometimes referred to as ARB hearings, typically involve the review board members, a staff appraiser from the county district, a hearing clerk, and the property owner or their representative. Depending on the county where they live, taxpayers may participate in formal hearings by phone, videoconference, or in person. In certain instances, arguments and evidence may be submitted by written affidavit.
The property owner or their agent will present evidence in support of their case for filing the appeal, while the county's appraiser represents the contrarian position, presenting evidence in support of the initial assessment. Both parties must answer questions from the ARB members, who will review the evidence presented and issue a final determination. Property owners dissatisfied with the outcome of the formal hearing can appeal the matter to a Texas court in their district.
Further Litigation: Appealing to the District Court
Property owners who disagree with the results of the appraisal review board hearing have the right under state law to appeal to the Texas district court. The property owner's attorney must file a petition with the court within 60 days of the formal hearing decision. Once served, the appraisal district has 20 days to respond.
As with most such proceedings, a discovery process comes next. The appraisal district requests the property owner's evidence and vice-versa. Discovery may also include written interrogation, oral depositions, and requests for other documentation.
If the parties don't settle the lawsuit out of court, the case will go to trial. If the judge or jury ultimately finds in favor of the property owner, they may also be awarded attorney's fees in addition to their tax savings. Decisions to litigate should be made carefully, weighing potential property tax savings against any related legal expenses.
Are Property Tax Protest Companies Worth It?
Appealing property taxes in Texas is typically initiated by the individual property owner. In some cases, though, taxpayers may opt to hire a licensed property tax protest consultant to file the appeal, prepare the necessary evidence, and represent them at appraisal district hearings.
Before hiring, be sure to find a company that charges contingency-based fees. Be wary of companies that require you to pay upfront, and look for a consultant that charges only if they successfully win a reduction for the property owner. Choose a company with extensive knowledge of the appeal process, an understanding of appraisal methods, and an awareness of any and all exemptions, such as homestead exemptions, for which a homeowner might qualify.
Employing the services of a property tax protest company makes the most sense in situations where the ultimate tax savings will be significant. And some property owners simply do not have the time necessary to file the appeal, collect the evidence, and appear before the appraisal review board. Protesting property taxes in Texas is a time-consuming process. Still, with the right company and a successful outcome, property owners can save both time and money.
Your Right to Fight Property Taxes in Texas
Fighting property taxes in Texas may seem an arduous task. But, if property owners disagree with the appraised value of their land or home, appealing for a reduction might be worthwhile. With the proper research and evidence supporting the claim and knowing how, when, and where to file their protest, taxpaying Texans have the opportunity to save serious money on their annual real estate taxes. Whether going at it alone or hiring a consultant to help, appealing property taxes in Texas is every citizen's right.