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Moore Homes, Moore Listings, Moore Results ™ |  |
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| Appealing Property Taxes |
- Protect Your 10% Property Tax Cap
Homeowners must annually protest their property taxes to preserve their right to a 10% maximum increase in their assessed value. The Texas Property Tax Code provides that the maximum increase in a homeowner's assessed value is 10% per year times the number of years since the property has been appraised. (The 10% cap only applies to residence homesteads.) The property can be appraised either by the appraisal district setting a new assessed value, an agreement at an informal hearing, a decision by an appraisal review board or a decision by a binding arbitrator.
Many Texas homeowners will be relieved to see no increase in the assessed value for their home in 2006. However, this creates an illusionary and false sense of security. Since the appraisal district did not increase the assessed value in 2006, they can increase the assessed value by 20% in 2007, assuming the homeowner does not appeal in 2006.
Homeowners who appeal annually protect and preserve their right to a maximum increase of 10% per year. When a homeowner elects not to appeal because the value did not increase, they are forfeiting their right to a maximum increase of their property taxes of 10% per year.
In addition to protecting the 10% cap, annually appealing property taxes has many benefits including substantial savings and a high probability of success. Although only about 7% of homeowners appeal their property taxes annually, approximately 70% of those to appeal are rewarded with a reduction in their property taxes.
Given such a substantial level of savings and probability of success, why don't more Texas owners appeal their property taxes? A survey conducted by O'Connor & Associates indicates that homeowners perceive the process to be overwhelming and difficult with a low probability of success. In actuality, the process is simple and straightforward and most homeowners who appeal are successful.
Knowledge of unequal appraisal and House Bill 201 are key factors in making annual property tax appeals viable for many homeowners. Most homeowners believe you can only appeal if the assessed value is greater than the market value. This is not true. Homeowners can appeal on unequal appraisal if their assessed value is greater than "the median appraised value of a reasonable number of comparable properties appropriately adjusted." Translated into English, this means you can appeal your property taxes if you are assessed for more than similar properties. House Bill 201 allows property owners to obtain a copy of the appraisal districts evidence two weeks before the hearing. The cost to obtain this evidence is nominal (usually $1 - 2; it can be printed off HCAD's website in Harris County) and the appraisal district may not present any information not included in the House Bill 201 package at the hearing.
Most homeowners who obtain the House Bill 201 package and research unequal appraisal using the appraisal district's web site will reduce their property taxes at the hearing. Benefits of appealing annually include meaningful tax savings, a sense of satisfaction from reducing your property taxes and protecting your 10% property tax cap.
Please inform your friends, neighbors and coworkers of the danger of not appealing your property taxes if the value did not increase. Even though government makes the laws, you have rights and there are laws in place to help homeowners fight back. So, don't be a victim - appeal annually and protect your 10% cap.
Patrick O'Connor, MAI, is president of O'Connor & Associates, a 130-person firm which is Texas' largest property tax consulting firm and serves over 23,000 clients. Tips for appealing property taxes are available at cutmytaxes.com
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