1. How is my property appraised?
Central appraisal districts assess market value using the sales, cost or income approach to value, and are required to use generally accepted appraisal principals when assessing value of a property.
2. How much can they raise my taxes?
Excerpt from the Dallas CAD website:
“Effective January 1, 2008, the Texas Property Tax Code, Section 23.23, states that a residential homestead is limited to a 10% increase. Rules:
- Limitations take affect one year after you receive your Homestead Exemption.
- Limitations do not apply to new improvements added in that year (i.e., additions, pools, garages).
- Limitations are removed when a property sells.
- Limitations will be shown on the Notice as "Capped Value".
- All granted exemptions are subtracted from the Capped Value instead of the Market Value.
- Capped Value minus applicable exemptions equals Taxable Value.
- The Capped Value is not a lifetime limitation.”
The market value can be raised more than 10% a year, but taxes are calculated on the capped value as long as the property maintains a homestead exemption and complies with the rules listed. However, it is important to recognize that homestead exemptions can be lost (see rule 7)! In the event of losing the homestead exemption on a property, the taxpayer would be obligated to pay the taxes, without the benefit of an increase cap. This is why it’s important to protest, regardless of the “capped value”.
3. I just turned 65 years old. Can my taxes be frozen?
Excerpt from Dallas CAD:
“The amount of the exemptions that are granted by each taxing entity is subtracted from the market value of your residence and the taxes are calculated on that "lower value." In addition, when you turn 65, you may receive a "tax ceiling" for your total school taxes; that is, the school taxes on your residence cannot increase as long as you own and live in that home. If you significantly improve your home (other than ordinary repairs and maintenance), tax ceilings can go up. For example, if you add a swimming pool, a garage, a storage building, and a room to your home, or significantly remodel your home, your tax ceiling can rise. It will also change if you move to a new home. The tax ceiling is set at the amount you pay in the year that you qualify for the senior citizen exemption. The county, city or special district may adopt a tax ceiling.”
It’s important to note that each taxing authority (city, county, school, etc) can determine the over 65 exemption for their taxing district, and can change that exemption. Some taxing districts do not provide an exemption for being over 65 years of age. This is another reason why protesting is always important.
4. How and why do I obtain a homestead exemption?
“A homestead can be a separate structure, condominium or a manufactured home located on owned or leased land, as long as the individual living in the home owns it. A homestead can include up to 20 acres, if the land is owned by the homeowner and used as a yard or for another purpose related to the residential use of the homestead. To qualify, a home must meet the definition of a residence homestead: The home's owner must be an individual (for example: not a corporation or other business entity) and use the home as his or her principal residence on January 1 of the tax year. If you are age 65 or older, the January 1 ownership and residency are not required for the age 65 homestead exemption.” Texas Comptroller of Public Accounts
A homestead exemption allows a taypayer to be eligible for various exemptions (based on the taxing district) and limits the taxable value to a 10% increase annually.
You must file your homestead exemption with the appraisal district that the property resides. This is not automatic! The taxpayer must submit the exemption within one year of the delinquency date. Link to application
5. What can I expect from the appeal process?
After formally filing a protest, we have an opportunity to meet with an appraiser informally to discuss the protest and try to negotiate a reduction based on our evidence. If at this point we are unable to establish a market value that the district and the taxpayer can agree on, we have another opportunity to present our evidence the Appraisal Review Board (ARB). The ARB hearing is a formal meeting between the appraiser, the taxpayer or their representative (Preston Bend Consulting), and three appointed individuals (the board) with various levels of expertise in real estate matters. Each side has an opportunity to present their evidence, as well as an opportunity for rebuttal. Then the ARB will rule on what they believe the fair market value should be. This is known as a board order.
The ARB hearing is not the final avenue to determine the market value. If the taxpayer desires, they can pursue litigation, or binding arbitration. They have 45 days to file the appropriate paperwork. Preston Bend Consulting can advise the client on pursuing their appeal past the ARB, and can assist in presenting and compiling evidence for the case.
6. How much will my appeal cost?
PBC charges 40% of the tax bill savings after exemptions. This covers the in house research to establish a target value backed by PBC proprietary data as well as the informal and formal ARB board hearing representation. If the client chooses to pursue the appeal through litigation or binding arbitration, and chooses to use PBC to assist in the matter, PBC charges a contingency fee of 40% of the tax savings awarded.
7. How long will my appeal take?
It depends. If we are able to obtain a value that is acceptable to the client during the informal hearing, the appeal should be resolved within a few weeks of the appeal deadline. If the client wants to pursue the appeal to the formal ARB board hearing, it’s usually (depending on the district) resolved by the end of July. If the client chooses to pursue the appeal to litigation or binding arbitration, it will take longer.
8. What is the deadline to file an appeal? Is there any exception to this?
The deadline varies from district to district, but is usually within a day or so of June 1st. There are a few exceptions to this rule.
9. What do I need to do for PPC to start my appeal?
Please review and fill out the start my appeal form under the property tax tab.
10. My property is not in the best shape. How can this affect my appeal on my market value?
Deferred maintenance is improvements to the property that have been “deferred” or put off. For example, your home needs a new roof, and you would have to replace the roof to sell the property for a fair market value. The cost of the new roof contributes to the fair market value, and can qualify as a reduction. To optimize your deferred maintenance issues, be able to provide PBC with pictures and quotes from contractors for the needed repairs.