Should You Protest Your Property Taxes?

Property taxes are a primary funding source for essential local services such as schools, police and fire departments, and road construction. These taxes are generally determined by multiplying a property’s assessed value by a local tax rate. Tax assessors, who work for local taxing authorities, estimate the value of all real estate within a district to establish these assessments.

Property owners have the right to challenge their property assessment if they believe it is inaccurate. An incorrect assessment can lead to a higher tax bill than warranted. Understanding the assessment process and protest avenues can help reduce tax burden.

Understanding Your Property Assessment

Local appraisal districts determine property assessments using various methods to estimate market value. The most common method for residential properties is the sales comparison approach, where assessors compare a property to similar ones that have recently sold. They consider factors like property size, age, features, and location.

Another method, the cost approach, calculates the cost to replace a structure and then subtracts depreciation, adding the land value. This approach is often used for newer or unique properties. For income-generating properties, the income approach analyzes potential rental income against expenses.

Assessments can sometimes be higher than a property’s actual market value or unfairly appraised for several reasons. Property records might contain errors, such as incorrect square footage or an inaccurate number of rooms. Market conditions can change rapidly, and assessments may not always reflect a decrease in value due to recent shifts. Damage or conditions that reduce a property’s value, like a leaky basement or foundation issues, might not be known to the appraisal district.

An assessment might also be unequal compared to similar properties in the same area. If comparable homes in the neighborhood have lower assessed values, it could indicate an overassessment. Home improvements, such as adding a garage or an extra bathroom, can increase a property’s assessed value, but sometimes these increases are disproportionate.

Gathering Information for a Protest

Property owners should first obtain the official appraisal notice from the appraisal district, as this document outlines the current assessed value. This notice also typically includes information on how to file a protest and important deadlines. Protest deadlines are often around May 15, or within 30 days of receiving the appraisal notice, whichever is later.

Collecting comparable sales data is a primary step in building a strong case. This involves researching recent sales of properties similar to yours in location, size, age, and features. Sources for this data include real estate websites, local real estate agents, and public records from county tax assessor offices. Focus on sales within the last 6 to 12 months for accuracy.

Evidence of property condition issues can also support a protest. This includes photographs of damage, such as roof leaks or foundation cracks, and repair estimates from contractors. Information on property characteristics that may be incorrectly listed, like a survey or blueprints showing a different square footage, can also be useful. Any professional appraisals obtained by the homeowner can provide strong evidence of the property’s worth.

Property owners will need to complete an initial protest form, often called a “Notice of Protest.” These forms are typically available on the local appraisal district’s website. The form usually requires contact information, property description, appraisal district account number, reasons for protesting, and an opinion of the property’s value. Use gathered information, such as comparable sales or repair estimates, to complete the form’s relevant sections.

The Property Tax Protest Process

After gathering information and completing the initial protest form, the next step is formal submission. Property owners can typically submit the completed protest form online, through mail, or by delivering it in person to the appraisal district office. Using certified mail with a return receipt is a reliable option for mailed submissions to ensure proof of delivery.

Following submission, many appraisal districts offer an informal review process. This often involves a discussion with an appraisal district representative where the property owner presents their evidence. This informal meeting provides an opportunity to potentially settle the protest without a formal hearing. If an agreement is reached, both parties typically sign a consent form, and the agreed-upon value becomes the final assessment.

If an agreement is not reached during the informal review, the protest proceeds to a formal hearing before an Appraisal Review Board (ARB). The ARB is an independent group that hears testimony and reviews evidence from both the property owner and the appraisal district. Hearings are often scheduled for a limited time, such as 15 minutes, with equal time allocated for each side to present their case. Property owners should organize their evidence clearly and be prepared to explain why they believe the assessed value is incorrect.

After the hearing, the ARB will issue a decision regarding the property’s assessed value. If the property owner is not satisfied with the ARB’s decision, further appeal options may be available. These options can include binding arbitration or a judicial appeal through the court system. These subsequent steps have their own specific requirements and deadlines.