Texas is among the states with the highest property taxes in the country, in part because the state does not collect income tax revenue. There are generally two ways that Texas homeowners can reduce their property taxes, through tax exemptions or protesting their property’s assessed value.
Tax Code Section 25.18 states that all appraisal districts must complete appraisals on every property in their district at least every three years. With the high volume of property appraisals, it’s common practice for appraisal districts to do mass appraisals, which involve appraising properties in an entire county, neighborhood, or community at once, according to specific standards. Mass appraisals can often result in errors because any issues that are unique to your property and could lower your appraisal may not be taken into consideration.
Texas Appraisal Districts send a notice of appraised value in April or May informing owners of their property values for the current tax year. The assessment letter will include information such as square footage, lot size, assessed value, and other details about your property.
If you disagree with your home’s appraised value, you have the right to appeal the appraisal district’s findings, and it’s free to file a protest. The steps below will show you how to lower property taxes in Texas, so you can move forward with your appeal.
File a Notice of Protest
To protest your appraisal district’s appraisal of your property, submit a completed Notice of Protest Form (Form 50-132) and any supporting materials to your county’s Appraisal Review Board (ARB). It’s best to use certified mail and request a return receipt in case your form is lost in the mail.
The information you will provide on the Notice of Protest Form includes:
- Your contact information, address, and property description
- Your appraisal district account number
- Reasons for protesting
- Your opinion of your property’s value and any additional information
- The type of hearing you would prefer (in-person, by telephone, or a written affidavit)
- Your preferred method of receiving a notice of hearing (mail, certified mail, or email)
- Your signature
You may request a special panel to hear your property tax protest if your property is valued at $50 million or more, is located in a county with a population of at least one million, and is classified as multifamily residential real property or real and personal property used for utilities, commercial, industrial, or manufacturing.
The deadline to protest property taxes in Texas is May 15 or within 30 days after the appraisal district sent the appraisal letter, whichever occurs later. This 30-day countdown begins when the assessment district mails your assessment letter to you, not when you receive it. Missing this deadline may result in you losing your right to protest your property’s taxable value.
If you are serving in the military or traveling away from home due to work, you may be able to file a late property tax protest.
Prepare Information for Hearing
Once you file your property tax appeal, there are several things you will need to do to prepare for your hearing. This research and preparation will give you a better chance at getting a property tax reduction.
Collect Evidence to Support Your Claim
You will need to collect documentation that supports your claim that your property’s assessed value is too high. This may include:
- Blueprints, engineering reports, photos, receipts or estimates for repairs, deed records, or sales price documentation
- Statements from an independent appraiser or a builder that support your claim
- Any information in the notice of appraised value that is incorrect, such as square footages, lot size, number of bedrooms, and other attributes
- Information from the appraisal district used to determine your property’s value
Research Comparable Properties
Finding out the approximate assessments of properties similar to yours can provide you with a comparison. If you check out a few similar properties in your neighborhood and find that they are valued lower than yours, this may indicate that your taxes are too high.
You can find this information through your county tax assessor’s office, or you could enlist the help of a real estate agent to find properties comparable to yours that have sold recently and the sale amounts of those properties.
Determine Your Property’s Value
As you prepare for your hearing, make sure you consider these different appraisal approaches to help you get a clear picture of the value of your property.
Sales Comparison (Market) Approach
This approach uses data on comparable properties as a basis for establishing property value. This involves determining the sales prices of similar properties and the differences between the property being appraised and these comparable properties.
This approach uses income and expense data to determine the future value of a property. This is done by determining what an investor would pay for the property and estimating the revenue that an investor would receive from the property in the future.
This approach estimates the equitable replacement cost of the building. Depreciation is applied to this replacement cost, which is then added to the amount of the land’s value.
Uniform and Equal Approach
Texas law requires property be taxed at 100% of its market value, in an equal and uniform manner. This approach involves collecting data about a number of comparable properties and making the appropriate adjustments for differences between your property and these comparable properties. This may include the lot size, square footage, garage space, number of bedrooms, or any other differences.
For example, if a property that is considered comparable to yours has more bedrooms and a larger garage than your property does, you could argue that your property should be assessed at a lower rate than this property.
As you compare your property with other properties, make downward adjustments to your property’s assessed value for these items that a comparable property has but your property does not. Then, calculate the median assessment for the comparables and multiply the median assessed value per square foot by the size of your property. This should give you the appropriate assessed value of your property.
Attend Informal Hearing at Appraisal District Office
An informal hearing typically takes less than 10 minutes and is held at the county appraisal district’s office. The appraiser will provide evidence supporting the district’s appraisal, and you will provide evidence that supports your appeal. Your supporting evidence may include sales data, listing information, and appraisals of comparable properties, as well as any photos that support your request for a lower appraisal.
These informal hearings rarely result in a substantial reduction in appraised property values, and most reductions that are approved are small.
In addition, participating in an informal hearing will prevent you from having the right to request a formal hearing or continue with your protest.
Attend Appraisal Review Board Hearing
A formal hearing takes approximately 30 to 45 minutes and is held in front of three appointed ARB members. These board members are independently appointed and are not employed by the appraisal district.
When you argue your case during a formal hearing, you will need to provide strong evidence that supports your protest, just as you would in an informal hearing. In this situation, you are up against an appraiser who has full access to databases that include information on property values and listings, along with sales of comparable properties, which may not be readily available to you as a property owner.
If you do receive a reduction in your assessed property value for the year, the burden of proof moves to the appraisal district for the following year, so their chief appraiser must provide convincing evidence that supports a subsequent increase and establishes a higher value for your property. This can make an appraisal district reluctant to increase the value of your property for the next year. In addition, if the ARB reduces your assessed property value, it’s unlikely that they would reduce it again the following year.
Appeal Through District Court or Arbitration
If you disagree with the ARB’s decision, you have the right to appeal the decision through your county’s district court. Binding arbitration may also be an option in some situations.
Appealing Through Your District Court
You have the right to appeal within 60 days of receiving the ARB’s decision. Before you decide to appeal through your district court, it’s important to determine if the tax savings you would receive would make up for any legal costs associated with your appeal.
If you choose to appeal, you would do so through the state district court in the county where your property is located. Even though you are appealing the ARB’s decision, you will still need to make a partial payment of your property taxes. Typically, this payment would cover the undisputed portion of the amount.
If you aren’t financially able to prepay your taxes, you could request the court to excuse you from doing so. You would need to file an oath saying that you are financially unable or that prepaying your taxes would hinder your ability to go to court for your protest. In this case, the court would determine the terms and conditions of your payment.
During your appeal, you may request a resolution by a jury, a judge, or through arbitration. You may also request to have settlement discussions prior to your trial date.
Appealing Through Binding Arbitration
You may be eligible to appeal through binding arbitration if your property is a residential homestead and if it has an appraised value of $5 million or less. If you appeal through binding arbitration, you must use the Comptroller’s Request for Binding Arbitration form (Form AP-219) to file your request with your county appraisal district no later than 60 days after you receive notice of the ARB’s decision.
You will also need to include a deposit, which varies from $450 to $1,550, depending on your property’s appraised value. The deposit amounts are listed on the form, and the Comptroller’s office will reserve $50 for their fee.
If the Comptroller’s office approves your request, it will appoint an arbitrator to handle your case. You may request an arbitrator who is from your county, but you may not request a specific arbitrator. The arbitrator will provide a decision within 20 days.
If the amount in the arbitrator’s decision is closer to the ARB’s assessed value or halfway between the ARB’s assessed value and what you have determined is your property’s assessed value, the arbitrator’s fee will be taken from your deposit. If the decision is closer to your suggested assessed value, the county appraisal district will pay the arbitrator’s fee. The comptroller’s office will then refund your deposit, with the exception of its $50 fee.
Hire a Property Tax Protest Company
If you’re a resident of Texas, and you believe that your property taxes are too high, you have the right to protest your appraised value. If you decide to file an appeal to lower your property taxes, use the steps and information above to do so.
If you want help with handling your protest, a Texas property tax firm can file an appeal on your behalf. You don’t have to spend your valuable time wading through the Tax Code, collecting data on comparable properties, and preparing an argument for reducing your property taxes.
At NTPTS, we help homeowners in Dallas, Collin, Denton and Tarrant counties reduce their property value and lower their taxes. We specialize in high-end residential properties, but represent properties valued at $250,000 or more.
We will review your property’s appraised value, perform research to form an argument, and file an appeal on your behalf. Our knowledgeable tax consultants will file any paperwork and attend all hearings so you don’t have to.
We operate on a contingency basis, so when you work with us, you won’t owe anything upfront. If we get you a reduction, our fee is 40% of the amount.
Work with a trusted firm that understands tax valuations and appeals in North Texas.