Everything You Always Wanted To Know About Property Taxes But Were Afraid To Ask
If, after reading this, it has piqued your interest and you want to know more, email us at SanAngeloProtest@gmail.com. We’re looking for at least 20 people who are tired of having their “government rent“ increase year after year. We want to help you fight back and hopefully get some relief. Time is crucial , so do not delay. Remember, you have only a limited amount of time in which to initiate a property appraisal protest.
The following is a quick summary on how Texas property taxes are determined; the process for reviewing and protesting property taxes; and what your rights are as a taxpayer and how you should be treated by the Tom Green County Appraisal District (TGCAD). Finally, we will discuss how TGCAD treats Single Family Residents unfairly when compared to Commercial Property Owners.
The first step in the property tax determination process is called Property Value Study or PVS. Government Code Section 403.302 requires the Comptroller’s office to conduct a study to determine the total taxable value of all property in each school district at least once every two years. In order to prevent a county from under-appraising its property and under-funding its school district, the State of Texas tells the appraisal district what the county is worth. Once a value is established the school district will know how much tax revenue will be available. If the revenue generated by property taxes is not enough to fund the local district, the State of Texas will have to fund the deficit. This means that the state will want the PVS amount to be skewed on the high side so that the school district is self-funding.
Once a county’s estimated value is determined, the appraisal district will try to make the PVS match its appraised values. The appraisals are done under 23 different categories. Examples of some categories are single family, multi family, commercial, rural, industrial, and manufacturing. The district must perform appraisals in each category. The total sum of these appraisals must be within 95% to 105% of what the state thinks the value of that category should be. The state audits random categories every two years under a process called Stratified Ratio. The state randomly selects properties under PVS categories to determine if the appraisal district is under or over its perceived value. This ratio helps members of the tax-paying population see how the district is assigning values. It’s a quick way to see if a district is taxing one category at a higher percentage than another category.
Now, this is how the protest process is supposed to happen. Appraisers will typically use sales data or production (rent) data to determine the value of a property in a particular area. They will then take the average value from that data and apply it to every property in that area. These values do not take into account the actual condition of the property, but instead assume every property in that area is in the same condition. This poses a problem for most single family homes. In Tom Green County, the data for the sale of a single family home is provided by the local Multiple Listing Service (MLS). Most homes listed by a Realtor and sold inside the MLS system are in sale-ready condition. People typically fix their homes up to the best possible condition to ensure the highest possible sales price. However, the typical home is not maintained in sale-ready condition. This creates a situation in which the district is taxing property/homes assuming they are remodeled and in sell-able condition. You might ask, “Well, what about the houses that are in disrepair that sell?” This is where the system fails most home owners. A house that sells for cash, as do most distressed properties, is not usually picked up by MLS. The sale is simply documented at the court house as “sold for Ten Dollars and other Considerations.” By using MLS data, the district is only picking up the higher dollar sales and not including cash sales when figuring the average. This allows TGCAD to keep the appraisals on single family homes unfairly high. Likewise, properties in the other categories are often sold and transferred outside the MLS system, so the district has less sales data to go by. This lack of data allows the district to undervalue these properties.
Once you receive your notice of appraised value, the clock will start. You have only a limited time to file a protest. Your choices on how to proceed are:
—Accept the value provided by the appraisal district;
—Go to the district for a pre-protest negotiation, and if you come to an agreement you will have to sign a binding agreement on the value and forego any further protest; or
—File a formal protest and request an Appraisal Review Board meeting, and if the ARB outcome is not acceptable you can request an arbitration or file a lawsuit in district court.
When a single family home owner goes to the district to protest, the district knows the home owner is not well-versed in property tax laws. It will just say property prices in the county are going up and so is yours. It will also say it cannot lower the value more than 10% because of state law. This is false. It can lower an individual house by more than 10%, based on condition or merit. If you continue to negotiate, the district will then tell you if you are not happy take it to the Appraisal Review Board (ARB), knowing that most people will not do that.
When a commercial property owner or owner of multiple rental properties goes to the TGCAD, the meeting goes very differently. The owner of the property can argue the value based on production. Production value is the annual rent (monthly rent times 12) multiplied by 8. This equation is brought up by the owner only when it leads to a lower value. This might also explain why rental houses in your neighborhood are appraised lower than your house. If after the pre-negotiation the commercial owner is not happy, a protest is filed. Often times these owners will retain a lawyer or tax agent to file the protest. TGCAD will usually call the commercial owner before the review board appointment to prevent the case from going forward and offer a more favorable appraisal amount. TGCAD doesn’t want to risk losing a case in district court. When a district loses in court, the value of the property is lowered and the district must pay the property owner’s legal fees. All this leads to an inequitable situation for single family home owners. TGCAD knows that most home owners will not or cannot afford to hire a lawyer in order to save a couple hundred dollars in taxes, so it plays hard ball with home owners and negotiates with large property owners.
Following are just some of the rights you as a property taxpayer in Texas have:
- YOU HAVE THE RIGHT to equal and uniform taxation.
- YOU HAVE THE RIGHT to ensure that your property is appraised uniformly with similar property in your county.
- YOU HAVE THE RIGHT to have your property appraised according to generally accepted appraisal methods and techniques and other requirements of law.
- YOU HAVE THE RIGHT to inspect non-confidential information used to appraise your property.
- YOU HAVE THE RIGHT to protest your property’s value and other appraisal matters to an appraisal review board composed of an impartial group of citizens in your community.
- YOU HAVE THE RIGHT to appeal the appraisal review board’s decision to district court in the county where the property is located.
- YOU HAVE THE RIGHT to fair treatment by the appraisal district, the appraisal review board and the tax assessor-collector.
After reading all this, you might wonder if your rights are protected in Tom Green County. Well, let’s see…
You have the right to fair treatment. However, large property owners are treated better and offered deals ahead of review board. Why are single family home owners not afforded the same treatment? Every taxpayer, no matter how big or small, should receive the same courtesy and treatment.
You have the right to the Appraisal Review Board. If you ask for a meeting, TGCAD will tell you it can only meet during business hours. Most single family home owners do not have the luxury of being able to leave work to argue their taxes. Large businesses and lawyers are able to attend during business hours, because that’s their job. What TGCAD won’t tell you is by law it must make times after 5 pm and on weekends available. This includes Sunday as an option. Also, as a single family home owner, you are allowed to reschedule, one time, if it is for a good reason. So, if you have an issue arise on the day of your protest appointment (family emergency, you get sick, just cannot get to appointment, etc.), you can call TGCAD and it must by law reschedule. TGCAD will do everything it can to avoid nights and weekends, but it is your right and you should insist TGCAD honor it.
You have the right to equal and uniform taxation. This one could take hours to explain, but simply put, based on the Texas Constitution and court cases, you should not have to pay a higher proportional tax rate than another property owner in the county. TGCAD will argue market value all day because it has lots of data to justify that argument. Also, arguing market value puts the burden of proving the property is overvalued on the taxpayer. Since the home owner does not have access to the confidential data the district has, it is difficult to show condition or production values of houses within the data set. However, arguing for equal and uniform puts the burden of proof on the appraisal district. It is also a huge risk for the district because if you are able to find undervalued categories or properties, then every other taxpayer in the district can use that same argument to win their appraisal protests. The district does not want to open Pandora’s Box and will do everything possible to only discuss market value.
Because most people have not researched tax law, arguing for equal and uniform could be difficult. Consequently, Tom Green County appears to have gotten very heavy-handed with single-family home owners and small businesses over the years. It has allowed large property owners and large commercial properties to be undervalued, resulting in the perfect set of conditions for single-family home owners to have a very convincing argument for equal and uniform. We won’t mention names, but if you look down Sherwood Way, Knickerbocker Rd. and most large industrial locations, you will see some of the worst offenders of under-valuation.
A CALL FOR ACTION!!! What can we as individual taxpayers do?
Get educated, learn your rights and file to request a protest hearing before the ARB. The form to file a protest should be included with your Notice of Appraised Value. If not, request one from TGCAD right away. You have a limited time frame within which to file.
- Include a written request for a House Bill 201 package with your protest form. This will greatly increase your chances for a successful appeal and limit the information the appraisal district can use at your hearing. The appraisal district can charge no more than $15 for this information.
- Under “Section 3: Reason for Protest” be sure to check the boxes for “Incorrect appraised (market) value” AND “Value is unequal compared with other properties,” as well as other reasons that apply to your individual situation.
- Do the research to find the properties that are under-valued.
- Demand the TGCAD treats you fairly and respects your rights.
- Take as many cases as possible to the Appraisal Review Board. Demand that your meeting be scheduled at your convenience, such as after business hours or on the weekend. You should not have to miss work or neglect other personal responsibilities in order to protest.
- Even if you choose not to protest, request and demand TGCAD provide you with all the data used to appraise your property (House Bill 201 package). The more people that request and review data, the more likely unequal taxation will be uncovered.
- Track TGCAD performance. If you meet with the district and are treated poorly, let us know. It is important we document how we as individual taxpayers are treated. Tell us your story so we can document and trend the issues.
If this has piqued your interest and you want to know more, email us at SanAngeloProtest@gmail.com. We’re looking for at least 20 people who are tired of having their “government rent“ increase year after year. We want to help you fight back and hopefully get some relief. Time is crucial , so do not delay. Remember, you have only a limited amount of time in which to initiate a property appraisal protest.