Property tax sticker shock is brutal in Texas, this year. Thanks in large part to rising home prices during the pandemic-era housing boom, property appraisals are higher than many homeowners have ever seen.
According to recent data, 2022 residential appraisals are up by:
- 15-30% in Harris County
- 20% in Tarrant County
- 24% in Dallas County
- 25% in Bexar County
- 53% in Travis County
Fortunately, in a few simple steps, you can challenge the appraisal to fight for a lower property value by filing a property tax protest. The process for protesting your taxes begins in January, so now is the perfect time to get up-to-speed on how it works and become empowered to fight for a lower property tax bill.
In this blog post, we’ll examine the factors contributing to property tax rate increases in Texas, fill you in on all the relevant dates, and give you tips for navigating the residential property tax protest process in Texas.
Some Good News Regarding Market Value vs. Taxable Value
After the recent housing boom, some homeowners statewide have seen the market value of their homes increase by double digits. Austin homeowner, Forrest Wilder, related his recent experience in Texas Monthly:
My partner and I bought our 1,100-square-foot home in 2011 for $200,000—what seemed like a fortune at the time. The market value has soared since then…Last year, the Appraisal District pegged our home’s market value at $428,032. According to the Notice of Appraised Value we received in April, that figure has soared to $656,039—a staggering 53% increase.
When the notice arrived, I took a screenshot of the document and sent it to my partner with a simple note: “greeeeeat.”
Fortunately for Texas homeowners, even if your home’s market value doubles, its taxable value may only go up by a few thousand dollars. Your local appraisal district will determine your home’s taxable value and it is usually lower than the market value.
Your municipality uses your home’s taxable value to calculate how much you owe in property taxes. Most homeowners receive the benefit of a homestead exemption, which allows you to deduct a certain amount from your taxable value. This taxable value amount is what you will actually pay property taxes on.
For example, if your home’s taxable value is $200,000 and you have a $50,000 homestead exemption, your municipality will only tax you on $150,000 of your home’s value.
Per state law, the taxable value for a residential homestead property cannot increase by more than 10% annually. Property tax increases also vary based on the rate set by your municipality. Texas’ average effective property tax rate is around two percent, but this number may be as high as three percent in some areas.
Protesting Your Property Taxes
Property taxes are also referred to as ad valorem taxes. Many people believe this type of tax is like an income tax that you can’t appeal. In fact, “ad valorem” is Latin for “according to value,” which means the amount you owe in taxes is based on the value of your property—and that’s open to protest.
Statistics vary by area, but experts estimate that between 30-60% of taxable properties in the country are over-assessed, leading to higher property tax bills.
Through the tax protest process, you can appeal your home’s value on a local level. You can take it through further appeal, arbitration, mediation, and more thorough litigation. You can fight it all the way up to the Texas Supreme Court.
Relevant Dates for Protesting Your Property Taxes
If you want to protest your property taxes, the process will begin in January. Here are the most relevant dates:
January 1: Home Value Appraisal
At the beginning of the year, the appraisal district determines your home’s appraised value by calculating the market value of your property based on its condition and its possible sale price.
April/May: Appraised Home Values Arrive
Beginning in April, you will receive a notice in the mail from the appraisal district that includes the value of your home and the exemptions that apply.
May 15: Protest Deadline
May 15 is the last day to file a “Notice of Protest” to your appraisal district. You can file via the form on the notice you received in late April/early May, or you can file online through your appraisal district’s website.
June: Meet with Appraisal Staffer and the Appraisal Review Board (ARB)
Once you’ve filed your “Notice of Protest,” your appraisal district will send you dates for an informal meeting and a formal hearing with the Appraisal Review Board (ARB).
If you want to reduce your tax burden, fighting for a lower property value by filing a tax protest may be your ideal solution! With tax bills increasing year after year, homeowners are left with the decision of challenging the appraisal themselves or hiring a property tax service to file a protest on their behalf.
SWBC Ad Valorem Tax Advisors can help you reduce the appraised value of your residence, lowering your annual tax bill.
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