Posts Tagged: property tax appeal

Can a Tax Agent Really Get a Bigger Reduction Than I Can on my Own?

Can your tax agent get you bigger reductions than you can on your own?

If not, it’s time to reevaluate your agent

Property Specific Knowledge

Knowing the subject property is one of the first rules in valuation.  As an owner or property manager, you likely have visited your property and know the difficulties it is facing.  This is critical to determining an accurate value.  For an agent to secure a greater reduction than you, they should know the property as well as, or better than the owner.  This can only be achieved through site visits where the agent puts boots on the ground.  First-hand knowledge by a dedicated agent allows them to find valuation issues that even a very diligent owner may overlook.  Online maps, street views, and satellite pictures can never replace a real visit.

Valuation Knowledge and Time

The next critical step is knowing standard valuation methods, and which ones are most appropriate for your property type.  For Texas multifamily, the income approach is usually the best method for determining value.  In the case of new construction, cost would be more appropriate.  As an owner, if you have experience with the approaches and the time to research market income conditions, you might do fine appealing on your own.  However, if like most owners, you have dozens of other important issues demanding your attention, it may be difficult to devote the necessary time and resources to a valuation appeal.  Your time would be far better spent doing that which only you can do and utilizing a professional specialized in Texas multifamily property taxes.  

 The right property tax agent has the time and resources to focus on your valuation appeal.  They have extensive experience in the approaches and market.  By utilizing a dedicated agent, you can free up your time to accomplish your vital priorities and still secure results.  Thereby increasing your productive output, without becoming overwhelmed.

Relationship with the Central Appraisal District

As a final point, it is critical to remember that relationships matter.  If you plan on owning the property for any length of time or want to keep doing business in the county, you should consider your relationship with the Central Appraisal District (CAD).  They are trying to do their best with their limited time and resources.  Approaching them with an aggressive attitude usually will result in the same behavior right back.  When both sides begin by entrenching themselves in their position, it is hard to make progress.  Unfortunately, some agents take this approach. Not only does is it hurt your potential valuation, but it can also harm your company’s reputation in the county.  Whether you appeal on your own or seek a tax agent’s help, find those who are good at building bridges.     

How Can I Reevaluate My Agent?

If you have an agent but wonder if they are getting you the best results, use the Tax Agent Checklist to evaluate your agent today.  The insights you will gain from these 10 easy questions will help you determine if your agent can really get you a bigger reduction than you can on your own.  You shouldn’t have to go it alone or settle for mediocre help.  With something as important as your property taxes, you should Experience Excellence.

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 the 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 the value you believe you can secure. Multiply that number by the most current tax rate used in that county 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 one eye on the value in future years and file an appeal when the property does become significantly overvalued.

That’s all you need to do when deciding on filing a protest. Examine your market to see if an appeal can even 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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How Much of My Time Will a Protest Take?

How Much of My Time Will a Protest Take?

The answer depends on the course you take

A Fork in the Road

Imagine you are traveling and you come to a fork in the road. Both routes eventually lead to your destination, which makes you wonder if it matters which route you take. So you ask yourself this question: Which route will get me to my destination in the fastest, most enjoyable way?  If you are going to make the drive, you might as well enjoy it.

So it is with property valuation appeals.  Whether you appeal it yourself, or you hire a property tax agent, the goal is to still settle with the Central Appraisal District (CAD) or have a hearing before the Appraisal Review Board (ARB).  The destination may appear the same, but the journey and results can be very different.

Course 1: Doing it Yourself

When handling your own protests, it is common that there are many projects and important tasks that pull you in a million directions, because property taxes are usually only one of the hats you wear.  They are easily put on the back burner for another day down the road, while more pressing sales tax issues or real estate deals are considered.  Since property taxes on Texas multifamily are the number 1 or 2 expense item, it is clear that affecting that expense can have a tremendous benefit to your bottom line.  Yet, it is still easy to be overwhelmed with all the specific deadlines and valuation evidence.  Successfully appealing your valuation involves arguing valuation concepts and knowing the market.  It involves studying comparable properties, documenting adjustments to their valuations, and attending meetings with the CAD or ARB.  In the end, your simple appeal may take many more hours than you anticipated or wanted to give it.  

Course 2: Hiring a Property Tax Professional

Hiring a property tax agent can alleviate most if not all of the above stress.  An agent takes on the responsibility to ensure filing deadlines are met, evidence is gathered, and hearings are attended.  Because agents focus on property valuations, they can give dedicated time to knowing your properties and aiming to secure you the best reduction.  They are familiar with the laws and the markets.  Following this course usually results in better outcomes for you, with a lot less time commitment and stress.  

So How Long Will My Protest Take?

The ultimate answer depends on the course you choose.  While both will typically last about the same number of calendar days, doing it yourself will involve substantially more time and commitment from you.  If freeing up your time for other important projects, and potentially securing greater tax reductions is appealing to you, consider hiring a property tax professional to handle your appeals.

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What difference could filing an appeal make on my property taxes?

How Does Filing an Appeal Make a Difference on my Property Taxes?

Don’t assume that the Central Appraisal District is correct

What types of issues can be corrected by filing a protest?

One of the simplest reasons for filing a protest of your noticed value is to correct misinformation.  This could be from incorrect building size, land size, construction quality, ownership, or other reasons.  Additionally, contesting the noticed value can allow you to provide property-specific facts that are not accounted for in the mass appraisal valuation method, and thereby change your taxable value.  

Is the system set up for me to fail?

Texas has a wonderful property tax system that is designed to ensure taxpayers are heard.  Part of this process revolves around evidence supporting the noticed value. As a taxpayer, you need to prepare and bring your own evidence, but unlike most other states, the Appraisal District is not presumed to be correct at your hearing. 

Under the Texas Tax Code §41.43(a) the Appraisal District bears the burden of proof to support their value.  In other words, they need to prove why the value they set is accurate.  This unique system is not set up for you to fail.  Come with evidence supporting the correction you are seeking and present your case before the Appraisal Review Board.

How does any of this make a difference to me?

Your Texas property tax bill is determined from your taxable value multiplied by the tax rate.  When you protest the noticed value and the result is a reduced valuation, your tax bill will be lower.  Additionally, under Uniform and Equal provisions, others can be helped by your protest.  Placing checks and balances on government taxation and overreach is a freedom we hold dear in this country.  While we are subject to property taxes, filing an appeal of your valuation is one way you can exercise your freedom to ensure that you are not being overtaxed.  

Here is an example of just what protesting your taxes can look like to you.

 

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The noticed value was $2 million and after the taxpayer’s appeal the value was reduced to $1.5 million.  The tax rate in the jurisdiction is 2.5%.  The $500,000 reduction in the noticed value would reduce the taxpayer’s property tax bill $12,500. 

Wayfinder offers taxpayer representation and assistance

If understanding and filing your own protest feels overwhelming and complicated, don’t worry.  Wayfinder’s property tax experts offer personalized service to know your properties and help you achieve the lowest legal value for your property.  We help liberate capital for our clients so they can do what they do best without stress.

 

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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 Can I Find My Property Tax Rates?

What is the difference between the tax rate and the taxable value?

Who Exactly is Taxing You?

To accurately determine your property taxes, you need to identify each taxing jurisdiction for your property. There are typically several entities that will be taxing your property, and they are listed on last year’s property tax bill(s). Once you locate that list, you can confirm by reviewing the current year’s notice of proposed value. Typically, the notice of proposed value will list the taxing entities along with the estimated tax rates, possibly answering two of your questions at once. 

It is also important to note that the taxable value and tax rate work together, but are very different pieces of information. The taxable value is the value that has been determined for your property as the basis for taxation. The tax rate is multiplied with your taxable value to determine the tax bill owed.

Where do I go to find out my tax rates? 

Once you have identified the taxing entities, it is now time to locate their current tax rate.  If you are determining the 2021 tax bill from the 2021 valuation, you will need to find the 2021 tax rates. Most of these rates are set in August or September, right before the tax bills are sent to taxpayers. The Central Appraisal District does not set the tax rates, but many times they will put the tax rates on their websites in an attempt to help taxpayers know who is taxing them and their estimated taxes. 

For example, when reviewing the Dallas CAD website (dallascad.org) you can select “Search Appraisals” on the left-hand column. Then you can search for your property by owner name, account number, street address, etc. Once you have located your property, you can scroll down to the Estimated Taxes section, which lists the taxing entities and their tax rates. It is stated that those rates are estimates, so you should further confirm those tax rates.

Is there a second way to confirm my tax rates? 

The Tax Assessor/Collector is responsible for issuing property tax statements. Their websites should have a list available for each jurisdiction and the associated property tax rate. The Dallas County Tax Assessor/Collector (dallascounty.org/departments/tax) has a link on the left-hand side titled “Tax Rates.” Click there to see the rates that are available, and you can even see the rates from a few previous years. If the current year tax rate is not yet available, then it likely has not been set or published yet. Continue to check back periodically during the fall until it is published. 

What if I still need help? 

Each Texas county uses a different process to find property tax rates. This article provides general information that has worked in many counties and is a great starting point when searching for your tax rates. If you need more specific help, or have detailed questions, please reach out to the experts at Wayfinder today.

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