Have you had your online protest of property tax value denied by the Central Appraisal District? Don’t give up! We strongly encourage our clients to protest their property tax values every year. Assuming you’ve filed a protest and are awaiting your hearing, the following tips from our president Mark Pickle could prove helpful in your quest to minimize your property taxes.
The protest really has three levels: informal protest (the online one), ARB Hearing and Arbitration. Rarely will any meaningful reduction occur at the informal level. To get the maximum relief, you’ll likely have to prepare and deal with all three, never settling on the first two. Even though there’s a distinction between appraised value and fair market value (FMV), your entire focus should be around attacking and reducing their version of FMV. If their version of FMV is a lot higher than the appraised value due to Homestead Cap, lots of folks don’t even bother protesting. But that’s a big mistake. Whatever FMV reduction you can achieve this year AND every year impacts a current and/or future tax bill.
Here are some tools to help your case:
1. Start with a CMA: Comparative Market Analysis.
Most realtors are happy to help you and can do a CMA quickly. Usually, this will involve 3-6 recent sales of comparable homes. That will give you a baseline dollar per square foot going rate for your home in the context of your immediate area.
2. Community Impact Newspaper research.
This local publication found at communityimpact.com tracks how values by zip code are adjusting as a percentage of increase/decrease from the previous year. This usually reveals a more tempered view of market values than the appraisal district models. Often this analysis alone will be evidence enough to argue or at least validate whether the CMA is accurate.
3. List of Comps
Look at your Central Appraisal District’s (CAD) list of sales comps they use to justify their version of your home’s value, then go to har.com and look up the sales description for those addresses. Often these descriptions will brag on recent updates and renovations–kitchens, bathrooms, roofs, HVAC systems, flooring, paint, etc. When it’s obvious these descriptions don’t match your current interior, then you have to aggressively resist and argue against these comps by estimating the reduction of the items which are not present in your own home. Remember, the CAD’s appraisal ALWAYS wrongly assumes your home is in tip-top ready to sale condition–INSIDE and OUT.
4. Consider your home….
Next magnify every flaw of your home (inside and outside) by getting detailed photos and estimates of repairs to reduce the value even more from what you establish from #1 and #2 above. The appraisal district has most likely only done a drive by or computer appraisal, and they’re missing tons of value-affecting data about your home
Sometimes during a protest (especially if you go all the way to arbitration), they’ll offer to come by and do inspection. They are experts in twisting the narrative in front of an arbiter. Never allow them in your home. Also, written estimates from contractors aren’t really that necessary like the CAD appraiser says it is. I have gone and won at arbitration many years, bringing my own reasonable estimated calculations for what is an obvious repair need.
5. Your Neighbors…
Then, when that’s done, and you’re confident of the number you’re getting ready to defend. take a close look at your neighbors’ appraised values at CAD website and make sure someone on your street or around your corner isn’t getting a more favorable treatment per square foot than you are. That will be a very tough thing for them to argue, and it can further reduce the numbers from 1, 2, and 3 above.
6. Lastly, if you’re not satisfied with the above, then go all out and hire your own independent appraisal. I did this about 3 years ago, since I knew I couldn’t sell my property for anywhere close to what the CAD said it was worth.. The appraisal cost me about $600, but was worth every penny when I realized the multiple years of tax savings it would bring. When you walk into an ARB meeting or arbitration with a certified appraisal, this is a slam dunk!
Comment below and let us know if you’ve protested in the past. What was the result for you?