Property owners recently received their appraisal notices from County Appraisal Districts (CADs). Keep in mind that Texas does not have a state property tax or a state personal income tax and that is why local taxing units fund local services by assessing property taxes by setting tax rates against property appraisals.
It’s up to these local taxing units to provide local services for schools, streets and roads, police and fire protection, and other infrastructure that support the needs of their communities.
There rarely is a situation when the value and market circumstances are the same in analyzing a protest. Accordingly, every protest, arbitration, and lawsuit stands on its own. The facts of each protest case can and usually do vary. However, for a homeowner, there are certain pieces of information that should be secured prior to a hearing. The property owner should be aware that the burden of proof – whether it’s the market value or the equal and uniform value of a property – is always on the CAD in the administrative protest process.
The process of assessing property taxes begins with the CADs’ annual appraisal of property values determined on January 1 of each calendar year. Notices of appraised value are prepared and delivered to property owners beginning in April. Property owners have 30 days from the date of the notice (not delivered date) to respond by filing a protest if they disagree with the appraisal. Protests are filed with the Appraisal Review Boards (ARB) electronically, by physical mail or in person.
It is important for those filing protests to request evidence supporting the CADs’ appraised value of the property. This information must be provided to the property owner fourteen days prior to the hearing concerning a protest. If the CAD fails to provide this evidence in accordance with the fourteen-day statute, the CAD cannot introduce any evidence at the hearing, except for rebuttal purposes.
The Bell CAD employs a taxpayer liaison officer (TLO). A TLO essentially is an onsite taxpayer assistance officer. The TLO is available as a resource for:
securing information and documents,
helping taxpayers with protest case preparation and presentation information,
explaining CAD processes and procedures as well as taxpayer rights and remedies,
taking applications to becoming a member of the ARB,
taking complaints relating to the CAD and/or the ARB, and
resolving non-value related complaints.
The TLO can be of great value to taxpayers as they navigate through the protest process.
Preparing for a Protest Hearing
First, the property owner should request a copy of the CAD’s evidence package. The package should contain all of the information the CAD used to appraise the market value of the property and identify the comparable properties used to determine an equal and uniform value. The CAD is restricted to presenting only this evidence in a protest hearing.
Also, the property owner should request a copy of the CAD’s “record card”. The CAD’s record card details all of the physical elements of improvements as well as the land characteristics. The property owner should compare the information in the record card to the actual characteristics of the improvements and the land. For example, the record card may indicate a home has 2,500 square feet of improvements when in actuality there are only 2,350 square feet; the year built was 1969 when it actually was built in 1954; or incorrect construction materials are identified. Land size and characteristics could be incorrect.
CADs use different types of codes and schedules to apply to each property. These codes typically are used on the record card. It is a good idea for property owners to learn and become familiar with CAD codes, their meanings, what various schedules mean, how codes are applied, and how correcting errors can affect the appraised value. Check every detail on the record card to ensure accuracy. Make sure the comparable appraised properties truly are comparable in terms of size, location, age, physical characteristics and condition.
Second, powerful evidence in an appeal is documentation of physical defects in/on a property. In these cases, property owners should bring pictures of the deferred maintenance, physical damage, curable and incurable obsolescence such as foundation or roof problems, etc. It is also recommended that property owners bring bids, engineering reports, and cost-to-cure estimates to document the dollar amounts necessary to remedy the problems.
Third, check with a realtor friend who can give you information/documentation of comparable sales in your market area. They may not want to give the information, but you can ask. Also, be careful in using sales as they may not support a lower value for your property.
Fourth, case presentation should be well organized, documented with pictures, copies of bids/reports, etc., and presented in a calm and confident manner. Remember, there is no one who knows your property better than you. You know every deficiency and defect – and the extent to which these factors diminish the value of your property – and how to best present the factors at the hearing.
Meeting with an Appraiser / ARB
In the event the CAD meets its statutory requirements, the property owner has an informal meeting with the appraiser in an attempt to resolve the protest. If a mutual agreement is not reached during the informal meeting, the property owner’s next step is to go before the ARB for a formal review of the protest.
Homeowners and all taxpayers should be aware that the ARB is a panel of independent decision makers. The Local Administrative Judge (not the Appraisal District or taxing units) appoints ARB members. ARB members are not subject to review or oversight by the Appraisal District or Chief Appraiser. Every year, the CAD solicits applications to become members of the ARB. If a taxpayer is interested in serving as an ARB member, he/she should consider applying.
During the ARB hearing, both the CAD appraiser and the property owner present their evidence for a determination of the appraised value by the ARB. If dissatisfied with the ARB’s final determination of value or ruling, the property owner may pursue arbitration or seek further review through litigation to district court.
Enclosed with your Notice of Valuation is a leaflet prepared by the State Comptroller's Office advising you of your Rights and Remedies in the property tax system. It is important you read and understand your rights and remedies as you have recourse whenever your administrative rights are denied or promulgated rules are not complied with by a CAD or an ARB.
Taxes Based on Appraised Values
Appraising (and the hearing of any protest) regarding the value of a property is the first step in the process that determines a property owner’s property tax liability. The second step in the process is applying the tax rate set by the local taxing units (cities, counties, schools, special districts) to the appraisal set by the CADs.
The CAD’s appraisal sets the taxable value of the property, and the local taxing units set the tax rate that becomes the property owner’s tax liability. For taxpayers to achieve real property relief they need to understand that tax rate setting is critical to controlling and minimizing taxes. In this respect, it behooves all taxpayers to involve themselves in taxing entities' budget meetings and tax rate setting hearings. If the thousands of taxpayers who protest their appraised values also attended budget meetings and rate hearings, true tax savings likely would be realized by all.
To further ensure homeowners minimize property taxes, they should verify that their Homestead or Disabled Exemptions are in place and that their school taxes are frozen if they are over 65 or are turning 65 this year.
Working to Provide Transparency
Minimizing the intimidation property owners experience and establishing procedures that are customer service friendly are legislative priorities for me. Property owners primarily fund local government. It is imperative that we have a system that respects taxpayers by being equal, uniform, transparent, and accountable.
The narrative given here is a minimum amount of information each homeowner needs to help analyze their own Notice of Appraised Value and what they need to build an effective protest case. I should mention that not all property is overvalued and sometimes it is smart just to accept a favorable valuation . . . but remain vigilant every year.
Since 2017, my goal as a legislator has been to provide greater transparency and accountability with less property owner intimidation. Those goals have been behind the previous session’s passing of House Bill (HB) 988 and the current session’s passage of HB 1285 and HB 4101. I have led the effort in the Texas House of Representatives to provide meaningful taxpayer protection and recourse in the property tax system.
It is important that Texas’ Property Tax Code sustain fairness, efficiency, and a clearly understood process. Provisions that give property owners protection and a grievance process in the event CAD’s violate statutes or fail to carry out legislative intent must be reviewed, evaluated, and revised routinely.
State Representative Hugh D. Shine
House District 55