PropertyTaxAppealsProcess
Thecompletepropertytaxappealsprocessconsistsofthreesteps:
Informalhearing
Appraisalreviewboard(ARB)hearing(akaBoardofEqualization)
Judicialappeal(litigation),bindingarbitrationorStateOfficeofAdministrativeHearings(SOAH)
Theprocessmayberesolvedateitherofthefirsttwosteps.Forexample,aprotestresolved satisfactorilyattheinformalhearingdoesnotproceedtotheappraisalreviewboard(ARB)hearing stage.Infact,apropertyvaluewhichisagreedtoattheinformalhearingcannotbefurther protestedtotheARBorthroughlitigation
However,ifapropertytaxprotestiscontinuedthroughtheinformalstagetotheARBstage,theownermaychoosetocontinueit,buta judicialappealisnotrequired.Thepropertyownermaystopthepropertytaxprocessatanyoneofthethreestagesiftheyaresatisfied withtheresultofthetaxdisputeresolution.
InformalHearingsforPropertyTaxDisputes
Theterm“informalhearing”aptlydescribesthefirststepintheprotestprocess.Somecountiesrequiretheinformalhearingtobe conductedbeforethetimeoftheappraisalreviewboardhearing.Forexample,inDallasCounty,ifyoushowupatthescheduledprotest time,youwillbedirectedtotheappraisalreviewboardhearingwithoutanopportunitytohaveaninformalhearing.Therefore,youneedto inquireastothetimingoftheinformalhearingprocessinyourcounty
Othercounties,suchasHarrisCounty,scheduleaninformalhearingbeforetheappraisalreviewboardhearing.Fromapractical perspective,thisisoftendonetoreducethenumberofhearingstheappraisalreviewboardisrequiredtoperform.ARBhearingsaremore expensivetoperformthaninformalhearingssincetheyrequiremorepersonnel.
Theappraiserwhoperformstheinformalhearingmayormaynothavesettheassessedvalueforyourproperty.Insmallercounties,the appraiserwhosetsthevaluealsoconductstheinformalhearing.Inlargercounties,suchasHarrisandDallasCounties,itisnotpractical forthepersonwhosettheassessedvalueforaparticularpropertytoperformtheinformalhearing,sothepersonperformingtheinformal hearingtypicallyhasnotvaluedthepropertyandprobablyhasnotseenit.
Portionsofthepropertytaxprotestprocessarearbitrary.Onesucharbitraryelementistheskillandexperienceoftheappraiser performingtheinformalhearing;heorshemayhaveverylimitedtrainingandexperienceormayhavebeenperforminghearingsfortwenty years.
PracticalTip:Donotassumethattheappraiserholdingyourhearingisavaluationexpert.
Theinformalhearingallowsthepropertyowneranopportunitytopresentevidenceexplainingwhyhebelievesthepropertyisovervalued orwhyitisnotassessedonauniformandequalbasis.Iftheprotestisforanotherpurpose,suchasanexemption,pertinentevidence mayalsobepresented.Theinformalappraiserwillconsidertheevidencepresentedbythepropertyownerandtypicallycounterwith informationhehasavailableregardingmarketvalueforthesubjectproperty.Inmostlargecounties,staffappraisersareprovidedafile withmarketdataandinformationonthesubjectpropertyimmediatelybeforethehearing. UnequalAppraisal–TexasVersusOtherStates
Texasislikelytobetheonlystatethatformallyaddressesunequalappraisalbasedonstatutes.However,appraisaldistrictappraisersin manystateswillconsiderunequalappraisal,alsoknownasequity,tobefair
Manyappraisaldistrictshavebeenreluctanttoconsiderappealsbasedontheuniformandequalconcept.Theyoftenreportthatthe uniformandequalpresentationisnotinanacceptableformat.Forexample,onecountystatesthattheonlywaytoprotestunderuniform andequalistopresentaratiostudy,eventhoughthisdoesnotappeartobeconsistentwiththerequirementsoftheTexasTaxCode Therefore,althoughitisappropriatetopresentinformationbasedonuniformandequal,beforewarnedthatitmaynotreceiveserious considerationduringtheinformalhearing.
Aninformalhearingtypicallylastsonly10to20minutes.Youmayberequiredtowaituptoseveralhoursbeforethehearingprocess, althoughmosthearingsbeginwithin15to30minutesofthescheduledtime.Theinformalhearingcanbea briefandeffectivemechanism eamodestchangeintheassessedvalueofyourproperty.Theappraiserperformingtheinformalhearingfortheappraisal districtoftenhaslimitedlatitudeandcannotmakesignificantchangeswithoutobtainingapproval.Ifyouareaskingforalargechange (perhapsover10percentoftheassessedvalue),bepreparedwithincontrovertibledatasupportingyourposition.
Rulesonappealsvaryfromstatetostate.YoumayprotesttheassessedvalueofyourpropertyannuallyinTexas.Somepropertyowners findthisthemosteffectivewaytominimizetheirpropertytaxes.Remember,ifyouagreetoanassessedvalueattheinformalhearing,you havecompletedthepropertyprotestprocessfortheyear.However,youmayprotestvalueinsubsequentyearswhetherornotthe assessedvalueincreases
AppraisalReviewBoardHearingforPropertyTaxAppeals
Ifapropertyownerisnotsatisfiedwiththeassessedvalueofferedbythestaffappraiserattheinformalhearing,hemaycontinuethe appealtothenextlevel.Thenextlevelisoftentermedtheappraisalreviewboardortheboardofequalization.Anoffermadetosettlethe protestattheinformalhearingisnotguaranteedattheARBhearing,whichmayconcludewithavaluehigherorlowerthantheassessed valueofferedattheinformalhearing.TheARBhearingtypicallyoccursthesamedayastheinformalhearing.However,youmaybe requiredtowaitanhourortwoaftertheinformalhearingbeforethestartoftheappraisalreviewboardhearing.ARBtimingdependsona numberoffactors,includingthetypeofproperty,countyandvolumeofappeals.
Theappraisalreviewboardhearingisoftenconductedbeforeathree-memberappraisalreviewboardpanel.Italsoincludesanappraiser fromthecentralappraisaldistrict,aclerkorrecordingofficerfromtheappraisaldistrict,and,ofcourse,thepropertyownerorhisagent. ThethreememberswhoformtheARBtypicallycomefromalargerappraisalreviewboard,whichistechnicallyindependentofthecentral appraisaldistrict.Inmostcounties,membersofthepanelarerotatedtominimizetheirrelationshiptoeachother.Thelevelofexperience oftheARBmembersvariesdramatically.SomehaveessentiallynorealestateexperiencewhileothersareRealtors ,commercial brokers,ordevelopers.
Asapracticalmatter,mostARBmembershavelimitedrealestateexperienceandtraining.However,theydoundergoafour-hourtraining processmandatedbystatelawbeforetheycanperformARBhearings
BothARBmembersandthepropertyownerorhisagenttakeanoathatthebeginningofthehearing.TheoathfortheARBmembers indicatesthattheyagreethattheyhavenotdiscussedthepropertywitheachotherorwithmembersofthecentral appraisaldistrictstaff beforethehearing.Thepropertyowner/agent’soathrequiresthattheypresentinformationwhichtheybelieveisaccurate. ThestepsintheARBhearingincludethefollowing:
Oaths
Descriptionoftheproperty
Presentationofevidencebypropertyowner
QuestionsfromARBmembers
PresentationofevidencebyCADappraiser
QuestionsfromARBmembers
Rebuttalbypropertyowner
DecisionbytheARB
Afterabriefdescriptionoftheproperty,theownerpresentsevidenceregardingtheirvalue.Thepropertyownermayalsopresentevidence astowhyhethinksthepropertyisnotassessedinauniformandequalmanner.Beforewarnedthatsomeappraisaldistrictsarenot inclinedtoconsiderevidenceregardingauniformandequalprotest.However,youshouldpresentsuchevidenceifyouareconsideringa judicialappealfollowingtheARBhearing.TheARBmembersaregivenachancetoasktheowner/agentquestions.TheCADappraiseris thenallowedtopresentevidenceregardinghisopinionofthevalueforthesubjectproperty
Formostproperties,theARBhearinglasts15to20minutes.Thereareexceptionsforlargepropertiesandcomplexsituations.However,in manycasesyouwillnotbeallowedtopresentevidenceformorethan5to10minutesregardingyourproperty.Afterthepropertyowneror hisagentpresentsevidence,theappraiserforthecentralappraisaldistrictoftenpresentsevidenceordiscusseswhyhebelievessomeor alloftheevidencepresentedbythepropertyownerisnotappropriate.ThemembersoftheARBoftenaskthepropertyownerorstaff appraiserquestionsregardingtheinformationtheypresentedortheiropinionofvalue.TheARBmembersthenmakeadecision.
ARB/BoardofEqualizationRulesVaryStatebyState
ARBhearingguidelinesvaryfromstatetostate.TheinformationisreliableinTexas.However,therulesandprocessesvarystatetostate. Inaddition,inpractice,therulesandproceduresvarycountytocounty
TheARB’sdecisionispresentedtothepropertyowneroragentatthehearinginTexas.Thedecisionissubjecttoratificationbythefull ARB(uptoabout200membersinlargecounties)althoughitishighlyunusualforthefullpanelnottoratifythedecisionofathreememberARBpanel.TheofficialnoticeoftheARBhearingistypicallymailedtwotofourweeksafterthehearing.
EitherthepropertyownerorthechiefappraiserwhorepresentstheappraisaldistrictcanappealtheresultoftheARBhearing.(Tax )Inpractice,achiefappraiserseldomfilesajudicialappealofanARBdecision.Thepropertyowner(orhisagent) eceiptoftheARBhearingresulttofileajudicialappeal.
JudicialAppealsforPropertyTaxReductions
Ajudicialappealisthethirdandfinalstepinthepropertytaxappealprocess.Veryfewprotesthearingsresultinajudicialappeal.For example,thereareabout350,000protestsannuallyinHarrisCountybutonlyabout4,200judicialappeals TexasPropertyTaxParcels,ProtestsandLawsuits
Hence,onlysevenpercentofassessedvaluesareprotestedand0.05percentcontinuestothejudicialappeal.Thesearestatewide numbersforTexasin2015.
AppealsDoubleover25Years
Thestatewideaveragefor1998/1999was2.86percentofassessedvaluesprotestedandajudicialappealfiledfor0.009percentof accounts,accordingtodataprovidebytheTexasComptrollerofPublicAccounts.Hence,theportionofaccountsprotestedhasmorethan doubledover25years.Thevolumeofaccountslitigatedincreasedfivefold,from0.009percentto0.05percent.
Issuestoconsiderwhendecidingtofileajudicialappealarethepotentialtaxsavingsversusthecostoftheappeal.Taxsavingsmay applyonlytotheyear(s)litigatedormayextendtofutureyears.Ifyoubelievesignificanttaxsavingswillresultthroughthejudicialappeal, youshouldcontactanattorneytodiscussthetimeandcostsinvolved.
DeterminingWhetherYouShouldProtestYourPropertyValue
Protestpropertytaxeswhenareductionislikely.Thiswillvaryfromstatetostate.ARBsgrantedreductionstosixty-ninepercentofthe protestsin2015inTexas,foralltypesofproperty(real,personalandmineral).(Thisisthemostrecentdataavailableatthetimeof writing.)
Personalpropertyvaluationsarelikelytoexceedmarketvalueifyourenderusingcost.Ifyourenderedwithcostforpersonalproperty, yourtaxablevaluelikelyexceedsthemarketvalue.Theexceptionscouldbe:1)inventorythatcanbesoldatcostand2)physicalwork-inprogress(asinmanufacturing).
Determiningwhethertoprotestmostlyinvolvescontrastingthepotentialpropertytaxsavingsversusthecosttoappeal.Thecostcould includeanappraisal,staff,ataxconsultantandanattorney.Mosttaxconsultantsofferacontingencyfeeoptionwithnocostunlessthey reduceyourtaxes
PropertyTaxLocations
HoustonOffice (Corporate)
2200NorthLoopWest, Suite200Houston,TX 77018. 713-686-9955
AtlantaOffice (Byappointmentonly)
4751BestRoad,Suite 316CollegePark,GA 30337.
770-835-4126
DallasOffice (Byappointmentonly)
4101McEwenRd,Suite 200Dallas,TX75244. 972-243-9966
ChicagoOffice (Byappointmentonly)
75ExecutiveDrive,Suite 349Aurora,IL60504. 708-630-0944
SanAntonioOffice (Byappointmentonly)
8632FredericksburgRd, Suite105SanAntonio, TX78240. 210-226-0829
NewYorkOffice (Byappointmentonly)
70EastSunriseHwy, Suite500ValleyStream, NY11581.
934-203-9917