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Austin Asset Blog: It’s Time to Protest Property Appraisals and Taxes

April 1, 2015

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Most of us are interested in saving thousands of dollars every year on income taxes. Imagine being able to save comparable or incremental amounts just as well through ad valorem taxes i.e. property taxes. Fortunately, we as property owners can do just that at this time of year by familiarizing ourselves with the relatively easy property protest process or by hiring a property tax consultant.

property tax imageFor every $40,000 you are able to shave off of your assessed value, you could save approximately $1,000 in property taxes. You will have to decide whether the time is worth it and we’ll get into the time estimate, or you can have the process automatically taken care of every year by hiring a property tax consultant and only have to pay them if your taxes are reduced. The benefits are lasting since a successfully reduced appraisal carries forward in future years and the appraisal district cannot increase your value more than 10% of the previous year—note that this only applies to properties that have a homestead exemption.

I have gone through this process twice—once in Travis County and once in Williamson County.

When selling my home in Travis County, I received a lower than expected market value by an appraiser which needless to say bothered me. The market value was less than the appraisal value. To make lemons out of lemonade I quickly set up an appointment with the Travis County Appraisal District. Since this was my first time, I expected it to be a long laborious process and was pleasantly surprised that I was in their office for less than thirty minutes (most of that time waiting until my number was called) and they accepted the appraised value directly from the appraiser with no questions asked.

home-appraisalLast year, I decided to go through the process in Williamson County, however I didn’t have an appraisal in hand to help. I had the next best thing…half a dozen comparables from a family member who is a realtor. Again, I thought it would be a long process and again I was pleasantly surprised. The assessor had what seemed to me a very simple program that they gladly showed me of the four comparable properties that they used to value mine. All I had to do was provide them different properties of lower value per square feet with two caveats—the properties had to have been bought/sold within the first quarter of the year and the properties had to be within my neighborhood not just in my same zipcode. So what did I do? I stack-ranked my properties by price per square foot and gave the appraiser the lowest I had. Ten minutes with the assessor (plus 25 minutes wait time) and I was out of the office with a lower appraised value in hand…and the knowledge that my property taxes would be lower come year-end.

So the details. Let’s start with dates. For Travis County, “you should file your written protest by May 31 or no later than 30 days after the appraisal district mailed you a notice of appraised value, whichever is later.” For Williamson County, “…property owners who wish to file a protest must do so before June 1st or within thirty days after a notice of appraised value is delivered.” For Hays County, “The deadline for filing written protests for homestead properties is April 30th or 30 days after the date the appraisal district sends a notice of appraised value, whichever is later.”

Each district will send you the forms (usually one page double-sided) along with your preliminary assessed value usually around the first or second week of April. One tidbit of advice that I learned from a property tax consultant…for each district there should be a box to check for the reason for protest. Check the box for value being over market value (or if there is a more pertinent reason, check that one). When the form asks you to state the facts that may help resolve the case, do NOT fill that box out—present that information when you are there.

Each jurisdiction has the opportunity to present your case before an Appraisal Review Board (“ARB”) if you don’t get a satisfactory agreement with the initial assessor, however I have never gone that far. Getting the ARB to agree with your lower value is much more difficult so give your best shot to the appraiser and think twice before spending the time going to the ARB.

To have this process handled for you automatically every year, you can hire a property tax consultant—they will usually work off of a contingency fee of 30-40% of the tax savings. Please touch base with your Wealth Planner for additional insight or property tax consultant recommendations.

For more information on any of these planning opportunities, contact the Austin Asset team.

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