Part 2: Protesting Your Property Taxes and Winning
In Part 1, we summarized the inherent corruption, conflict of interests, and incestuous relationship among:
- The taxing entities (e.g. cities, counties, school districts, etc.)
- The Appraisal District Board of Directors
- The Chief Appraiser
- The Appraisal Review Board
In summary: the very people who set your tax rates, spend your tax dollars, demand ever more of your hard-earned money, also determine who will sit on the Board of Directors of the Appraisal District. The Board of Directors in turn hires or fires the Chief Appraiser, and (in the case of counties with fewer than 120,000 residents) the Board of Directors selects who will sit on the Appraisal Review Board and hear your protest.
Yes, the people that hear your protest are selected by people who are selected by the very taxing entities that have an insatiable thirst for your money.
(In the case of larger counties, the Appraisal Review Board members that hear your protest and reach a decision on your taxes are selected by the local administrative judge for the county. This provides a small measure of increased independence. Unfortunately, residents of smaller counties are not granted the same measure of protection.)
But despite the corruption, let’s talk about how we can win.
Filing a Protest
You only have 30 days from the date of the Notice of Appraised Value to file a protest. As of the writing of this, April 19, assuming you’ve received your notice in the mail — the clock is ticking. The appraisal district would like you to forget about this and miss the date. But go find that letter now and take action so that you don’t miss the date.
You don’t have to have all your ducks in a row in order to file a protest, but you’ll need some sense of what the evidence supports.
(For ease of reading, I’m going to first describe the process of filing a protest. It’s really quite simple and takes only 5 minutes. Then, we’ll return to some suggestions of how to research and find evidence that will support your case.)
Many counties now support an electronic protest filing method.
Here’s an example from the Kaufman County Appraisal District Website.
In the upper right corner of their website, you’ll see a link for Online Protest.
Really, all this link allows you to do is file a protest. The actual protest will be conducted later, either in-person or by telephone.
Note: In many cases you can call the appraisal district and have an informal conversation with the Chief Appraiser or their team. It may be that your valuation can be lowered immediately and without much effort. This is always a good first approach. If you do this, have an articulate story. Maybe you bought the house recently and can prove what you paid for it, and maybe this amount is far below what they’ve appraised it for. Have a brief factual story ready to go. If this works, and you get the reduction you want — great! Game over. Pat yourself on the back and you’re done. Citizen advocacy is fun and rewarding.
Second note: you can hire a company to handle the protest for you. That may have advantages. But my purpose in this article is to show you how you can do it yourself and win. It takes a bit of work, but it’s not an extreme amount of work. And for me, there’s nothing quite as fun as defending my own financial assets against the government.
Okay, assuming an informal conversation with the Chief Appraiser is not effective, you’ll need to file the online protest form. If by chance your county doesn’t support an online protest, you probably will have received a paper protest form in your Notice of Appraised Value letter. Use that instead.
The instructions below are geared toward an online protest. You should be able to make the adjustment pretty easy.
Typically, you will receive a formal notice from the Appraisal District in mid-April. This “Notice of Appraised Value” will detail what the Appraisal District thinks your property is worth this year. It is not a bill, but it will have dollar amounts near the bottom that provide an estimated tax amount.
From the date of this notice, you have 30 days to file an protest. Don’t let this window of opportunity slip by. If you miss the 30 day window, there is no make-up period. You will have lost your opportunity to protest for this year.
The online tax protest system will typically rely on you creating an account, using an initial PIN (provided to you by the Appraisal District — usually in the same letter with the Notice of Appraised Value). You’ll create a login and password, provide phone numbers and email addresses, etc. You’ll typically receive an email from the online service asking you to confirm your account by clicking on a link.
Screen captures below may vary with your appraisal district.
Once you are logged in, you will be be able to start e-file a protest. It will look something like this. You’re looking for a button to start the e-filing of your protest.
After starting the e-filing of your protest, you’ll select your property. It should look something like this:
When you click on the blue E-File button for your property, you’ll be asked for a brief comments, and your daytime and evening phone numbers. It should look something like this. Enter a few brief comments. This is not the place to lay out your arguments. Just a few comments like, “Protesting my property appraisal” or something of that sort is plenty in my judgement.
Then you’ll be asked for your opinion of your property’s value and the protest reasons. It should look something like this. Note that in this example I’ve supplied my opinion that my property is worth $195,000 and I’ve selected both reasons for my protest. More on those reasons below.
There are two reasons claims you are allowed to make:
- The appraisal amount is simply incorrect.
- The appraisal value is unequal compared to other properties.
Reason number 1 is pretty straight forward. The job of the appraisal district is to set your property value at fair market value. Your argument here is that they have appraised your property in a way that is inconsistent with fair market value.
From the Texas Comptroller’s website:
Fair market value is what your property would have sold for on January 1 of the current year, in an open market.
If you are convinced that the appraisal district has valued your property too high, then you’ll want to make this claim. You’ll have to support it with evidence, of course, but this is an important claim to make.
Reason number 2 is has nothing really to do with fair market value. Rather, here the argument is that your property is unfairly valued as compared to other similar properties in a similar area, with similar age and condition, etc.
Essentially, if you can prove that in a roughly apples-to-apples comparison your neighbor's house is valued at $150,000 but your house that is substantially the same is valued at $175,000 — you’ve got grounds for this sort of appeal. The Texas Constitution requires that the appraisal district value property equally and fairly.
I recommend making both appeals and supporting them with evidence.
Don’t forget to finalize and submit your e-filing for a protest hearing.
What Happens Next?
You may receive a settlement offer from the appraisal district. If the offer is to your liking, then accept it and you are done. Case closed. Again, pat yourself on the back. You’ve done an important work toward safeguarding your assets from the government. Your appraisal will be updated, your taxes owed amount will be updated, and you’re done.
If you don’t like the offer, reject it and proceed to a protest hearing before the Appraisal Review Board.
Researching and Gathering Evidence
As noted above, you’ll want to have at least some sense of the evidence to empower you to have an informed opinion of a better value for your property.
Here’s are some ways to get that evidence:
- If you have a connection with a realtor, ask for a list of comparable properties in your area that have sold recently. These will provide useful evidence of what fair market value is for your property. Try to make sure these are truly comparable properties. Comparing your house built in 2018 to a house built in 1974 is not exactly comparable. Ideally, houses in the same neighborhood, built about the same time, make good evidence in support of the first type of protest — that the appraisal district has not accurately appraised your property in keeping with fair market value. However, if your house is the one built in 1974 and you’re finding that it is being valued more expensively than a house built much later… this may be the start of key evidence for you to gather.
- You may want to browse services like Zillow.com and select criteria to filter for recent sales. Print this as evidence of recent sales. All of this will help you provide evidence to support your position for the first type of protest.
- In Google maps, locate four or five streets in comparable neighborhoods. Make a note of those streets. You might use your own neighborhood, and a few neighborhoods elsewhere in the same city.
- Go to the appraisal district website and use their property search function. Each appraisal district website will have a property search function. Here’s a link for the Kaufman County property search, as an example. All property tax details are public information. Use this against the appraisal district.
- In the property search function, enter the name of the street. For example, a nearby neighborhood has an Lawnview Drive with many similar houses to yours. In the appraisal district website just enter “Lawnview” and you’ll get a listing of every house on Lawnview Drive in that neighborhood. Pick a few of those and start seeing what the data shows.
- There are usually two key components to a typical house’s appraisal: the property value (the land value) and the improvements value (the value of the structures). Make a simple spreadsheet or note those values for maybe four or five houses on Elm Street.
- Now find your own property and begin to make some comparisons. You’re looking for differences between similar properties — whereby your property is valued higher than similar properties.
- Suppose your house is on a 6,000 foot square lot and the lot is valued at $75,000. Suppose other similar neighborhoods have similar lot sizes and those lots are only valued at $50,000. This is evidence of unfair and unequal valuation that you’ll want to use. Be sure to evaluate whether one property might be out of the city limits and the other property is in the city limits. You’ll be able to determine this by looking at the taxing entities that each property is subject to. The mere fact that a lot is outside the city limits and another is inside the city limits does not necessarily mean one should be more expensive — but it can be a factor. The more apples-to-apples of a comparison you can make, the better.
- Likewise, if there are nearby lots that are much larger in size and yet are only valued at $80,000 you have evidence to argue that your tiny lot at $75,000 is unfairly valued against a 1 acre lot at $80,000. I’ve successfully argued that it is incomprehensible that someone would pay $75k for a .15 acre lot when around the corner there’s a 1 acre lot for $80k. That defies a reasonable market. This sort of argument and evidence can be helpful.
- Take notice of the square footage of other houses and the overall cost per square foot of your house and those comparable houses. If your house is valued at $125 a square foot and similar houses in similar areas are valued at $90 a square foot — you’ve got evidence to support your argument.
Initially, you’ll use this evidence to help you provide an informed opinion of what your property value should be when you e-file the protest form (see above). While it is important to be realistic, don’t set a number too high. Use a quick survey of data to inform you as to an aggressively optimistic starting opinion of your property’s value. Think of this as a negotiation. Start realistically low. I’ve seen the Appraisal Review Board split the difference and settle in the middle. It’s better if they come all the way to your number of course, so push hard for the reduction you feel is warranted by evidence.
Remember, you don’t have to have all the evidence pulled together at the time you file the protest. Just enough to give you a sense of reality and which way to take your arguments.
After You File a Protest Request
You’ll receive a date and time for a protest hearing before the Appraisal Review Board. You’ll also want to contact the appraisal district and request copies of any and all evidence they plan to introduce. This is your right. Note: there may be a way to request their evidence when you e-file your protest. Keep an eye out for this. If they’re going to present evidence against you, make them work for it and make them put all their cards on the table so that you can be prepared.
Note: you do not have to share your evidence before the hearing, nor should you. Remember, the appraisal district works for you. You don’t work for the appraisal district.
Remember, if your Notice of Appraised Value was mailed on April 15, the 30 day period to file a protest ends on May 15. Hearings might begin as early as May 18 or so.
When you get notice of your date and time, don’t be afraid to negotiate on a better date that is consistent with work commitments, childcare, etc.
Use the intervening time to accumulate more evidence.
Organize your evidence into a packet. I recommend putting page numbers on each page for easy reference. If you refer to other properties, be sure to have the full address of the property and the property ID number. Some suggest driving by those properties and taking a picture. This can help establish that the property that is valued lower than you isn’t some sort of dump, but is a truly comparable property. It also can be good to include a picture of your property.
An appraisal review board typically has five members, but you’ll want to verify the exact number of members. Make copies of your evidence package plus extra copies as you’ll need to provide one to the Chief Appraiser (in addition to the Appraisal Review Board members) when the hearing begins.
The Hearing Process
The hearing is semi-judicial in style. It is not a formal courtroom process. There’s no need to be nervous. In fact, as long as you present evidence in a clear manner, the burden of proof is on the Chief Appraiser to show evidence that is more compelling.
Let me repeat that. You will have to present evidence, but if your evidence shows that the appraisal district’s value of your property is wrong, the burden of proof is now on the Chief Appraiser to answer your evidence in a compelling way. If the Chief Appraiser cannot do this, the appraisal review board is bound by law to find in your favor.
This doesn’t mean the Appraisal Review Board always follows the law, but that’s what the law says about burden of proof.
The hearing begins with you taking an oath that you will present truthful information. The members of the appraisal review board will also affirm that they have not had inappropriate contact with you or others about the property in question.
You can elect to present your evidence first or allow the Chief Appraiser to present their evidence first. I recommend requiring the Chief Appraiser to present their evidence first. Remember, if you asked for their evidence, you know what they are going to present. On the other hand, the Chief Appraiser does not know what evidence you will present.
The Chief Appraiser will likely take anywhere from 5–10 minutes to present their evidence. You must be given a similar period of time to present your evidence. Questions and answers are permitted both from you to the Chief Appraiser, you to the members of the Appraisal Review Board, and vice-versa.
Be wary of the Chief Appraiser throwing around technical terms and acronyms that you don’t understand. Ask questions. Make them explain. Don’t allow technical jargon to trump real world facts.
Here’s an example loosely based on previous protests I’ve filed.
Me: “My property is overvalued by you. Here are three properties that prove that the value should be $150,000 instead of $190,000.”
Chief Appraiser: “Well, those properties are all in a property class of R7 and yours us R3 and thus when we pro-rate for the differences, our value is right.”
Me: “I’m not interested in your arbitrary ratings. The simple facts are: here are the pictures, these are comparable properties, and the value you put on my house is not right. $150,000 is the right value.”
The reason for this sort of approach is that I’ve seen cases where they argue based on the rating of the various properties. But these are quite arbitrary, and I’ve seen Chief Appraisers admit that they have the wrong rating. In other words, try to prevent them from using an artificially defined construct to justify a high valuation for your property. To the best of your ability, question their ratings, bring them back to reality, with your evidence appeal to the plain and clear conclusions.
Stick to the Evidence
You will be most effective by sticking to the evidence.
Lecturing the Appraisal Review Board about the unfairness of the property tax system is not relevant. Neither is a complaint about how government spends money, or about high taxes. Your comments should be laser-focused on the evidence you are presenting.
- “The Chief Appraiser claims fair market value is $200,000 but on pages 3, 4, 5, and 6 of my package you will find similar properties of similar condition with an average fair market value of $175,000. I request that you adjust my property value to $175,000.” (This argument speaks to the first type of protest — a protest over the fair market value of your property).
- “The Chief Appraiser has unfairly appraised my property in a way that is not consistent with similar properties, and does not meet the requirements of law. For example, the Chief Appraiser claims my 6,000 foot lot has a value of $75,000 but on pages 7 and 8 I show 12 examples of similar lot sizes in similar neighborhoods with average values of $50,000. I request you correct my appraised value. (This argument speaks to the second type of protest — a claim that the appraisal is not fair or equal to other values.)
Again, stick to the fact with a laser-like focus. Don’t go into a tirade against the system, the tax rates, the politicians, or anything of that sort. Be evidence-based and factual. Also be persistent.
Stay calm, cool, and collected, but don’t be bullied or pushed around. Even though I have often been disappointed by Appraisal Review Board members, I have also seen them respect me for the thoughtful, organized, and factual-based way I have made my case.
If the Chief Appraiser tries to counter your evidence, be persistent and relentless. Do the same if a member of the Appraisal Review Board tries to push back against your evidence.
- “I will again direct you to the 5 examples I have presented on page 7. While the Chief Appraiser can cherry-pick certain properties to support their case, a fair examination of the data shows the true value is $175,000.”
If necessary, it is fair to remind the appraisal review board, that by law the Chief Appraiser has the burden of proof and the Appraisal Review Board is required by law to find in your favor unless the Chief Appraiser presents overwhelmingly strong evidence to the contrary.
In most cases, after some back and forth the Appraisal Review Board will make a determination on the spot.
They may find fully in your favor. They may split the difference. Or they may rule against you altogether.
They often will point out to you that you are free to file a lawsuit in district court if you are unhappy with the outcome.
This is very disingenuous, as they know that average folks are intimidated by the prospect of finding an attorney to file a lawsuit in district court.
What they fail to tell you is that there is a very simple process of appeal that is available to you: An Arbitration Process.
The Arbitration Process can override both the Chief Appraiser and the Appraisal Review Board. It is not difficult or complex. It does not require an attorney, and you are perfectly capable of prevailing in such an arbitration. One great thing about an arbitration process is that you can select an licensed arbitrer from anywhere in the state of Texas. Thus, you can reduce the chance of outside influence from someone in your own county that might be sympathetic to the Appraisal District.
If there’s interest, perhaps we’ll explore the Arbitration Process in a future article. But hopefully you won’t progress this far and you will find relief from the Appraisal Review Board.
I hope these articles are helpful to you. While it may sound hard, it really isn't that difficult. And it’s a great reward to fight the machine and win.
If you have questions, feel free to reach out to me at davidwattsjr@gmail and I’ll do my best to answer. I’m happy to share personal opinions and personal experiences as a fellow citizen trying to fight back.