Posts By: Brendan Reeder

Helpful Hints When Protesting To The Appraisal Review Board

Helpful Hints When Protesting To The Appraisal Review Board

Know Your Rights

As a taxpayer that has decided to appeal the noticed value of your property to your local Appraisal Review Board (ARB), you need to know some of your rights to have a successful appeal. First, you have the right to inspect the Central Appraisal District’s (CAD) evidence before your hearing. As long as you made a request, Texas law requires that the CAD send you their evidence fourteen days before your hearing. Use this right to examine the CAD’s evidence. Additionally, there are several ways to reschedule your hearing. Arguably the most common way to reschedule a hearing for an owner with multiple properties across multiple counties is if the owner has hearings scheduled on the same day in different counties. Whichever county notified the taxpayer last on those same day hearings must reschedule their hearing. And finally, you have the right to appeal any ARB decision to litigation (or arbitration if your properties qualify) following your ARB hearing. In most cases, you will have sixty days after the ARB hearing decision was issued to file to court or an arbitrator.

Tips when in an ARB hearing

There are also things you should do in your ARB hearing that will help your appeal chances and your reputation with the county. First and foremost, prepare your case, and have evidence. If you show up at an ARB hearing without doing your homework on the property or market, you most likely will not find a sympathetic board. You need to have evidence supporting your requested value, and it should make sense. You also need to review the CAD’s evidence and come prepared to rebuff or correct their support. Second, be respectful. These hearings can get heated for taxpayers especially when their outcome may impact peoples’ jobs or livelihoods, but remember, these board members and the CAD representative are just doing the job required of them by Texas law. Stay calm and respectful at all times while still vehemently stating your case. It will help you when the board deliberates and protect your reputation in that county.

After the Hearing

After the hearing has concluded, it’s time to review your appeal. Yes, you need to examine the possibility of pursuing litigation or arbitration like we covered earlier, but you also need to evaluate what evidence worked and what did not. This is extremely helpful because you may have another hearing before this board this same year for a different property and need to rethink your strategy/valuation methods. Moreover, the members on these boards can stay around for years so you could have the same board members for several years in the future. You need to be thinking about how you can improve your appeals and make them more persuasive to those specific members.

If you have any questions about how to handle an ARB hearing successfully, please contact one of our Texas multifamily specialists today.

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What is A Central Appraisal District?

What is A Central Appraisal District?

The Central Appraisal District’s Role

In Texas, Central Appraisal Districts (CADs) are in charge of determining market value for both real and personal property within their jurisdictions. They generally release these values to the public and their taxpayers at some point around May each year. These values are pivotal in the functioning of a county because they will be the basis for establishing the upcoming year’s tax rates that will help fund county and municipal functions for the next year. Despite the appearance of this role, it is important for taxpayers to understand that their local CAD does not set or control tax rates. Moreover, the CAD does not collect taxes or issue tax bills. Their sole job in the taxing process of a county is to set taxable values on taxpayers’ properties.

CAD’s Role in the Appeal Process

An important part of the CAD’s function in government is working with taxpayers each year to establish accurate values for property taxation. This is achieved when taxpayers appeal their noticed value sent by their local CAD. Once filed, these appeals can primarily end in one of three different ways; 1) the taxpayer ultimately withdraws their protest, 2) the CAD and taxpayer settle on a value for the property, or 3) the CAD and taxpayer can not agree on a value and must go to an appraisal review board to determine the value of the property. Following these appeals, the CAD will finalize any changed values into the tax roll.

CAD’s Role after Appeal Process

After the appeal season concludes, the CAD’s valuation cycle begins again for the following year. The CAD office will start collecting data on the market and start to shape its mass appraisal methodology. If you have any questions about the CAD’s role in determining your multifamily property value, please reach out to one of our Texas multifamily specialists for answers and guidance.

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Should I file a protest?

Should I File A Noticed Value Protest?

Do Your Due Diligence

When taxpayers are deciding to file a protest of their noticed value, they must first come to an opinion of value. If the taxpayer’s opinion of value is less than the noticed value, it may be worth filing an appeal. However, taxpayers should be honest in their valuation approaches so as not to file a fruitless or even frivolous appeal. Examine market impacts and see if there are any sales of comparable properties near your own. You can also look at similarly situated properties and see if they are near your same value. If after you have done your due diligence and come to the unbiased opinion that your property is overvalued, you then need to consider the impact of an appeal.

Is the Reduction Significant

After you have settled on a value for your property you believe evidence supports, it is then important to analyze the impact your reduction will have on your tax liability. To roughly calculate the tax savings a successful appeal will yield, subtract your opinion of value from the noticed value. This number is the reduction to value you believe you can secure. Multiply that number by the most current tax rate used for your property and you can estimate your tax savings following a successful protest. Is it enough for you to file the appeal and potentially go to an appraisal review board hearing? If so, file that appeal right away! Otherwise, maybe just keep an eye on the value in future years and file an appeal when the property does become significantly overvalued.

That’s really all you need to do when deciding on filing a protest. Examine your market to see if an appeal can be successful, and then review the tax savings of a successful appeal so as not to waste your time for nonconsequential savings. If you need any help deciding on the success probability of an appeal or calculating your savings, please contact one of our Texas multifamily specialists today.

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Will Filing a Protest Affect My Sale Price

Protest of Taxable Value and The Impact on A Property’s Sale Price

Will filing a protest affect the sale price of a property?

Some property owners worry that reducing the taxable value of their property will ultimately hurt the potential sale price of an asset in the future. Their concern is that the taxable value of the property is evidence of the true value of the property and will result in a lower sale price following a reduction. This is not the case, and these concerns should not stop a property owner from filing an appeal of their property’s noticed value. If anything, a successful appeal will actually increase a property’s future sale price since the tax burden of the property decreased.

Independent Appraisals

When a county appraisal district (or an appraisal review board) works with a taxpayer to set the market value for a property, it is with the intent of finding the value that all sides believe to be reflective of the value the asset would exchange hands on an open and free market. However, appraisal districts and appraisal review boards are often burdened with so many other properties to value that this type of appraisal is often not terribly deep or encompassing. Moreover, negotiations between taxing districts and taxpayers can skew values one way or another for the sake of settling appeals. The appraisal communities recognize and understand these types of appraisals and generally take them with a grain of salt.

Appraisals done by parties looking to sell/buy assets perform appraisals independent of appraisals done by taxing jurisdictions. The main reason for this is that these parties will typically have more information than the appraisal districts and much more time to value the individual asset. As such, they can take the appraisal to a much deeper (and in their opinion), accurate level. These separate appraisals often result in much different values.

What does this mean for owners wanting to sell their assets and appeal their property value?

Ultimately, because appraisals for taxing purposes are independent of appraisals for sales/loans, taxpayers can work to reduce their tax liability without much concern of boxing themselves into a lower sale price for an asset. If you are looking to pursue a reduction to your taxable value, please reach out to our Texas, multifamily specialists.

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How are Appraisal Review Board members appointed?

How are Appraisal Review Board Members Appointed?

Appraisal Review Boards

If you own property in Texas and have ever appealed the noticed value, you most likely have dealt with an Appraisal Review Board (ARB). These ARBs handle valuation disputes between taxpayers and Central Appraisal Districts (CADs) by holding hearings where both parties present evidence and support for their valuation. At the conclusion of these hearings, ARB board members issue a decision and can change the market value of a property if they find it appropriate. Typically, an ARB hearing will consist of three to five board members from a larger pool of active members that varies in size depending on the size of the county.

Selection of ARB Members

Now that we understand the role an ARB plays in setting property values, the question that often seems to pop up in peoples’ minds is “who are these ARB members and how are they chosen to sit on the board”? This is an important question which is easily answered. For starters, there are no special requirements for ARB members to be on the board other than they must be a resident of the appraisal district for two or more years before taking office. This requirement is universal throughout all of Texas. While there are certain rules that restrict an individual serving on the ARB panel, they primarily depend upon conflicts of interests from serving rather than the potential board member’s knowledge or experience in appraisal work. However, who gets to choose and approve these members depends on the population of a county. If a county has a population of 120,000 or more, ARB members are appointed by the local administrative district judge. Alternatively, if a county has a population of less than 120,000, the board of directors for that county appoints the ARB members.

If you have any more questions about your local ARB board and its operations, please contact one of our Texas multifamily property specialists today for information.

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How to know if you’re being taken advantage of by your tax agent?

How can a tax agent take advantage of a taxpayer?

The property tax world can be a complicated nightmare for many multifamily property owners in Texas. There are just so many variables and factors that need to be considered following a fair valuation of a property that it can be painfully confusing. Often, even the most diligent owners are ignorant of most of these factors and require guidance to navigate the appeal system. Some tax agents take advantage of this (reasonable!) ignorance and seek to twist it to their advantage. They will make promises they never intend to keep, blame others for their poor performance, and treat clients like a number while charging high rates. This is not fair to the taxpayer and should not be accepted as the status quo.

How to identify when you’re being taken advantage of by your agent 

The good news here is that it’s fairly simple to spot the bad agents in these scenarios when you take a closer look. They usually are radio silent until they need something from you, and they typically avoid responsibility for most issues. If you want to test your agent, ask how your portfolio looks this tax year, or simply ask them when was the last time they saw your properties they represent. If it wasn’t at least within the past 12 months, there is a good chance you are being treated as just a number by your tax agent, and it may be time to make a switch. The same can be said if you never hear from your agent, or it takes them an unreasonable amount of time to get back to you. You pay them to help you through this process; they need to be available to you. Paying a premium for a service is great so long as you are also getting premium value in return.

What to do if you are being taken advantage of?

Leave your tax agent! Why would you settle for being insignificant to a person or group that you depend on for guidance and help? These properties are important to you, and they should be important to your agent as well. I promise you there are agents out there that will treat your properties as if they were their own. If you notice the described red-flag attitudes in your tax agent, make the switch.

If you have any questions about what to expect from a quality tax agent who cares about you and your properties, please contact one of our Texas multifamily specialists today.

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Will an Appeal of my Noticed Value Really Make a Difference?

The Impact to You

As a multifamily property owner in Texas, you have most likely received a “Notice of Proposed Value” from your local county appraisal office and wondered whether to appeal that value. If you have never appealed this value, you may be unaware of the benefits that a successful (and even an unsuccessful!) appeal may bring. 

The Impact on Your Relationship with the CAD

If successful, an appeal will result in lowering a property’s taxable value. This means tax savings for the owner. But even if your appeal is unsuccessful, just by filing it you will have had the opportunity to learn more about your county’s appeal process and build a relationship with your Central Appraisal District (CAD). Building this relationship can be invaluable in later years/appeals.

YOUR Impact on the Community. 

In the multifamily industry, tax savings are often passed along to multiple parties; owners may see a healthier bottom line while tenants may see improved amenities and accommodations. However, there are also benefits to owners of different properties. By lowering the taxable value of your property, it may provide evidence for another owner of a comparable property to help lower their taxable value. Thus, the benefits that your property and tenants receive may also be possible for others in your market. Besides improving the lives of those in your communities, the beauty of this type of relationship is that this initial reduction may fuel tax savings for years to come because now the whole market has a lower taxable value. Upward movements in values will be offset by lower starting values.

 And those are the two main impacts your appeal could have on both you and your properties, as well as the communities you serve. The next time you believe your property is overvalued by your local CAD, remember that the impacts your appeal can have are far reaching and helpful to all. If you have any questions about pursuing a valuation appeal for your Texas multifamily property, please contact our team of specialists today!

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Filing a Protest of Noticed Value

What Does it Mean to Me? 

Every year, multifamily property owners receive a proposed notice of value for the properties they own. Left unappealed, this proposed noticed value will become the taxable value of their property for the current tax year. Many owners ignore these notices or simply approach it indifferently. They often ask, “Why should I file a protest of this value?” When examined, there are multiple reasons to file a protest of your proposed value.

Tax Savings can Benefit Multiple Parties

This is the most obvious and impactful reason owners should appeal their noticed values. By reducing the taxable values of their property, they can directly lower their property tax bills dues later in the year. The savings generated from these reductions can mean owners are able to improve the assets they currently occupy, or potentially acquire new ones. Never forget, the service multifamily property owners provide their communities is extremely important. Oftentimes, benefits that property owners receive work their way into the public in some form or fashion (be it new amenities, updated units, etc.). The benefits following tax savings are significant and far reaching for more than just the property owner.

Taxing Entities are Held Accountable

Central Appraisal Districts (CADs) are in charge of setting the value for properties within their counties. They have the difficult job of valuing every property in their county annually. This is impossible without something called “mass appraisal”. Mass appraisal is a way of valuing large groups of properties by applying common multipliers or factors to some individual characteristics of a property. However, the problem with this methodology is that it cannot account for factors plaguing individual properties. This is where the owners and agents of a property are able to help CADs accurately value a property. By sharing specific factors that impact your properties’ values, you can provide insight to the CAD that may impact not only your valuation, but other properties’ values. It helps taxing entities be more accurate.

Your Rights can be Exercised

Finally, appealing is a right afforded to you by the Constitution and laws of the land. Texans are big on believing their government should be working for them, not the other way around. If nothing else, your appeal will be a signal that due process in the Lone Star State is strong and present.

If you have any other questions as to why you should annually appeal your property valuation, please reach out to the specialists within our office.

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What do I Need to do to Get a Property Tax Reduction?

Reductions Require Evidence

If you appealed your multifamily property’s value, you most likely feel that your local Central Appraisal District (CAD) overvalued your property. As a result, you probably want to reduce that value and ultimately save yourself from paying unfair property taxes. Well, to do this you need to have strong evidence of your property’s overvaluation and explain this evidence effectively to either the appraisal office or an Appraisal Review Board (ARB). A common mistake made by individuals handling their own appeals is that they believe values increasing from one year to the next is by itself evidence that their appeal should succeed. That is not the case. You need to have strong evidence of what you believe the value should be to get that desired reduction.

Getting an Informal Reduction 

In Texas, most CAD’s will communicate with taxpayers in an effort to settle the appeal and avoid an ARB hearing. To take advantage of this, you need to do research in your market. Are there sales comps? Did you recently build the property for less? Is the property charging less in market rent than it did in previous years? You really need to examine the functionality and external impacts on the property to determine if a reduction is warranted. Once you have strong evidence, reach out to the CAD. Most offices are happy to take a look at your evidence and at least communicate with you about why they set the value where they did. Remember, you have a right to the evidence the CAD used in setting your value, and you should request it when you reach out to attempt settlement of your appeal. Review it critically and fairly.

Getting a Reduction at the ARB 

If you were unable to secure a reduction at the informal level with the CAD, it is time to prepare your case for an ARB hearing. These hearings are generally fair and most evidence is considered. To secure a reduction at these hearings, you need to put your evidence into one packet and make multiple copies to hand out at the hearing (check your local ARB hearing procedures packet for the exact number of copies needed). Next, you need to be sure that your evidence is accurate and can stand up to scrutiny. The CAD will most likely attack your evidence as unreliable and claim your requested value is too low. You then need to be able to attack the CAD’s evidence fairly, and cast doubt on their method of valuing your property. If you are more convincing, the ARB may choose a lower value than the CAD’s proposed one, or they may simply take your exact requested number if your case was strong enough. 

There are two main ways to get a reduction to your property value: 1) informally settle with the property’s CAD, or 2) win your hearing before an ARB. Both of these stages are extremely important when pursuing a reduction, so please reach out to our multifamily property specialists for guidance, consultations, or excellent representation.

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What Does A Great Property Tax Agent Do?

When it comes to service, the difference between good and great is noticeable. Good service fits a need while great service exceeds expectations. Most of us have experienced both good and great service, and I am willing to bet that great service providers stand out to us, while good providers fall by the wayside. This is mainly because great service is much rarer, and we feel its impacts immediately.

A Great Agent is Hard to Come By

There are a lot of good property tax agents in Texas, but not many great ones. This is because the level of service a great agent can provide is often much higher than most groups are able or willing to offer. Great agents visit all the properties they represent so that they can intimately understand their clients’ assets. They also act as an extension of their clients and treat every appeal as if it were their own property being valued. They are considerate of their clients’ needs, expectations, and goals throughout the entire tax year, not just during appeal season.

A great agent also knows when to be aggressive with an appeal and push for a large reduction and when to work with an appraiser to come to a settlement. You can usually identify a great agent by their consistent large reductions and favorable reputation with the appraisal districts they work in. As a result, their clients benefit from lower taxes and elevated reputations in the communities they serve. 

The Wayfinder Way

All multifamily property owners deserve great property tax services. To be sure you are receiving great service, download the Property Tax Agent Checklist and evaluate your current provider. If you find that there is some room for improvement, it may be time for a change so you can get the service you deserve. 

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