Posts Tagged: property tax appeal

What is an Informal Meeting with the Central Appraisal District?

Informal Appraisal Meeting v. Appraisal Review Board Hearing 

When a taxpayer files an appeal of their property value, they are given a date that their protest will be heard by the Appraisal Review Board (ARB). This appeal will determine the final value of the property through the administrative process. However, before this hearing, a taxpayer may seek out an “informal” meeting with the county appraiser’s office in an attempt to settle the appeal. This allows both the appraisal office and the taxpayer to set the value for the property without the intervention of an ARB.

What to Do:

BEFORE THE MEETING

The first thing a taxpayer needs to do before their informal meeting with the appraisal district is examine their evidence. This should include the county’s evidence as well. After examining all the evidence, taxpayers must establish a justifiable value for their property and craft the narrative of their appeal (“My property’s value should be reduced because . . .”). Once they’ve done their homework, it is time to meet with the appraiser.

DURING THE MEETING

When having the informal meeting with the appraisal office, be sure to listen to what bit of evidence drove the county’s valuation. Where are they putting the most weight on in their argument? Was it a comparable sale in the market? Or maybe a new cap rate study? Be sure to listen to their argument; even if you cannot resolve the protest in the informal meeting, it will help you later in an ARB hearing. After meeting with the appraiser, try to rework your evidence using some of the data/numbers the county is using to bridge the gap between your valuations. It is ok to make concessions. If the number is higher than you find to be reasonable, then take your shot in front of the ARB. Otherwise, offer this new number to the appraisal district and see if that is agreeable to them.

The Wayfinder Way

These meetings can be extremely useful to taxpayers because they now know what the driving factor was in their property’s valuation. The meeting allows them to bypass a potentially risky ARB hearing to acquire a reduction in value. 

For help setting up or handling an informal meeting with an appraiser concerning your property valuation protests, ask how we can help.

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Why Are My Property Taxes So High?

You Need a Texas Multifamily Property Tax Specialist.

Why Your Taxes Keep Getting Higher 

Property taxes are determined based on the value of your property and the tax rates set by local jurisdictions. Since Texas does not allow income tax, the property taxes are higher than in other states. With multiple inputs, there may be many reasons why your tax bill is high. We will address a few of them in this article.

How Property is Valued 

Each year the Central Appraisal Districts (CAD) review and assess the value of your property.  As you might expect, most often the value increases. If you have not been contesting your value, this would definitely impact why your taxes seem high compared to others. Even though the CAD attempts to value every property fairly and equitably with others, it is a very difficult job.  They value thousands to hundreds of thousands of properties and cannot know your property personally. They use information they have gathered about the market to value properties en masse.  Hiring a tax agent to properly review your valuation each year and contest the value when appropriate can help keep the market value reduced, and thereby reduce your property taxes.

Why Tax Rates Matter

Another component of the tax bill is your tax rate. Even if your valuation stayed the same from last year, the tax rates may have increased. This would increase your tax bill. In the fall, the local districts have meetings to discuss their budget needs and proposed tax rates. This is really the only time you can voice your opinion about the tax rate. If you are not attending these meetings and letting your district know you want to keep the rate low, they will likely move forward with their proposal. 

Evaluating Your Agent 

If you have an agent who has been appealing your valuation and you still feel like your valuations are too high, then download the Property Tax Agent Checklist and rate your agent.  You may find out that it isn’t you, but it is your agent that is not giving you the representation you deserve.  Evaluate their fee, if it is a bargain price, you are likely getting bargain service.  Consider finding a Texas multifamily property tax specialist to take your results to the next level. 

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When Should You Hire A Property Tax Professional?

Anytime Of Year Is A Good Time To Get With A Property Tax Agent

Many Texas multifamily property owners already have representation concerning their noticed value protests. But not all. Whether you do it yourself–or even if you’ve never filed an appeal–you should engage with a property tax agent today to get specialized help with lowering your taxes.

2 Reasons You Need Specialized Help with Your Property Taxes

1. They can save you more than you can save yourself

If you do not have a property tax agent currently reviewing your properties’ values for potential protests, you should do so immediately. Agents specialize in property valuations–and in reducing them–to save you more on taxes. Doing these in-house may seem to save you money because you do not need to pay an agent’s fee, but you are most likely missing out on large tax savings every year that more than pays for the agent. In fact, most agents only charge a fee if they are successful in saving you money. Doing this work in-house creates more stress for you and your team members, requires the use of more resources, and often will result in suboptimal results. Getting expert representation is always advisable.

2. They can help you all year long

Now that you can see the value of a good agent, when should you reach out and engage with a firm for representation? The answer is: immediately. There is no bad time to start working with a good agent. If values have just come out, it means they can start preparing your case for appeal to an ARB and even court, if needed. If it has been months since your last appeal, an agent can review your portfolio for further reductions outside the normal appeal timeframe, or start prepping appeals for next year by doing site visits and learning your assets. Agents can, and should, even be providing you with tax estimates for budgeting purposes. There is no bad time to get with a great firm. A good agent can provide value no matter the season. 

If you do not yet have any representation for your Texas multifamily property, please visit Wayfindertaxrelief.com today and see what a specialist can do for you and your portfolio.

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What is a Property Tax Agent?

You Need Someone in Your Corner Who Will Fight For You.

A Tax Agent is… 

  1. Licensed by the State

A Texas property tax agent is an individual licensed in Texas to represent taxpayers in the valuation appeal process. There are education requirements and certification exams proving a base level of competency in Texas property tax law before someone can become licensed.  Once licensed, continuing education requirements ensure agents are staying up-to-date on Texas law and ethics. When evaluating an agent, first check to see that they are licensed and legally allowed to represent you.

  1. Your Advocate 

Tax agents are meant to be your advocate and represent your best interests.  They are an extension of you throughout the appeal process. Their goal is to reduce your property tax burden while preserving your relationship with the county. Your agent should communicate with you proactively and keep you in the loop. Unless you specifically state it, they should not be accepting valuations or settlements without your knowledge. 

  1. A Representative Who Works For You

Your tax agent should be working for you, not working around you.  They should not file appeals on your behalf without your permission. Occasionally, you may find an agent who is overly aggressive and ignores your instructions. They may even threaten to drop your appeal if you don’t do what they say. These agents are acting beyond their authority, and you should review your rights to hire a more respectful agent. If you encounter a rude agent, you should run in the other direction!  Agents like this run the risk of causing a rift between you and the county–and that could damage your future appeals. There are too many good agents out there; you don’t need to settle for poor representation.

An Extension of you

Ultimately, a tax agent should be an extension of you, decreasing your stress and fighting for reductions. They should handle the entire appeal process and keep you in the loop, while minimizing the burden on you. Hiring the right property tax agent will bring results to you and your property that can make a meaningful impact to your bottom line.

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How do I Calculate My Texas Property Taxes?

Calculating Your Property Taxes in 3 Simple Steps

Step 1: Find your property value. This can be found on your Notice of Value or on the central appraisal district website where your property is located. If you don’t know your property account/parcel number, you can often find it by searching by address or owner name.  

Step 2: Determine the tax rates that apply to your property. In many instances, the tax rates can be found where you find your property value. Be sure to locate all applicable tax rates, which may include the Independent School District (ISD), county, city, hospital, community colleges, etc. A good check is to review the previous year’s bill to ensure you have located all the taxing jurisdictions.    

Step 3: Multiply the property value by the total tax rate. Texas property taxes are calculated on 100% of the market value of the property.  If the total value is $10,000,000 and the total tax rate is 2.5%, then the tax bill would be $10,000,000 x .025 = $250,000.

That wasn’t so hard, was it? The tax system can seem intimidating at first, but a few good tips from an expert will give you a good handle on the terminology and formulas used in your valuation, driving you to ask the right questions and know when you can go it alone and when it’s time to reach out for assistance.

Why Does it Matter?

When you know how to calculate your own estimates, you no longer need to take your tax agent or the taxing jurisdictions at their word. You can verify that your tax bill is correct, and you can calculate the tax savings you are receiving. You will have more peace of mind knowing you are not dependent on someone else’s work.    

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Why Would You Pay a Higher Percentage?

The Cheapest Tax Agent Usually Costs the Most Money

Are You Getting What You Paid For?

Comparing Agents

Searching for the right Texas tax agent can be overwhelming.  There are so many options, and everyone seems to have something unique.  The most common criteria used to compare agents is the contingency fee they charge, and agents are typically paid based on the tax savings they achieve for their client.  The major benefit to contingency is that the agent carries the risk and the client always comes out ahead by pocketing the difference from the original taxes less the agent’s fee. 

Lower Fee or Better Results?

The property owner’s dilemma is whether to hire the agent with the lowest fee or the one with the best results.  If Agent A charges 30% and Agent B charges 20%, it is logical that the owner would see the net 80% as a better deal.  Unfortunately, experience shows that the cheapest agent usually is the most expensive.  

Low cost service usually indicates: 

  1. You are just another volume client
  2. Agents are typically overburdened and can’t provide you with specialized service
  3. Agents don’t have the time or the drive to visit your property and gain critical first-hand knowledge

On the other hand, agents who specialize may charge a higher contingency fee, but some of the benefits are they:

  1. Have time to know your properties individually
  2. Perform annual site-visits to help them see the property over time
  3. Perform deeper market research to help them achieve greater tax savings

Comparing Results

To illustrate the difference, let’s look at some real-life 2020 multifamily examples (with names redacted) in Midland, TX: 

  Agent A – 30%   Agent B – 20%
Property #1   #2
Noticed Value $52,074,060   $62,175,000
Final Value $31,000,000   $62,175,000
Tax Savings $359,569    $0 
Net to Client $251,698    $0 

 

Agent B did not achieve any tax savings for their client.  The fact that their fee was lower did nothing to help their client lower their property taxes.  However, Agent A’s expertise and focus produced results that put money back into the client’s pocket.  Remember, if you aren’t paying your tax agent, then they aren’t saving you money.  The age-old adage rings true, you get what you pay for.  The cheapest agent usually costs you the most in lost tax savings.       

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Suing After Deadline

Everyone makes mistakes, and sometimes people miss deadlines. We’re all human. But if you are a multifamily property owner in Texas who has missed the deadline to file a protest of value with your local appraisal district, there may be little hope for suing in court. 

In Texas, deadlines are everything and there are consequences to missing them. The Texas Tax Code requires taxpayers to “exhaust their administrative remedies” before they are able to file a property valuation appeal to court. In layman’s terms, this means you cannot file a lawsuit against your taxing county unless you have attempted to lower your property’s value through their administrative appeal process. This creates big issues for owners who have missed their appeal date but feel their values are unjustifiably high. Most will be stuck with this value. However, certain factors could be in play that may just save a few owners.

Correcting Errors on the Roll

As stated in a previous article, there is hope for property owners who have missed their deadlines and can meet specific requirements. Section §25.25 of the Texas Tax Code allows a taxpayer to correct certain errors that can result in lowered taxable values regardless of regular appeal deadlines. These appeals can be filed all year round. While these protests do not allow taxpayers to skip the administrative appeal process and go to court directly, they do give owners the opportunity to again “exhaust their administrative remedies”.If there is an unfavorable result after following proper procedure (an appeal and resulting Appraisal Review Board), the taxpayer may then file a lawsuit against the taxing jurisdiction.

Wayfinder’s Guidance

Missing an appeal deadline can impact a multifamily property owner’s bottom line terribly, as well as the communities they serve. As an owner in Texas, you need a strong ally that can help guide you through this significant time and yield more tax savings.

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10 Points You Should Use to Evaluate Your Agent Today

Has Your Agent Drifted?

Despite our best intentions, it is human nature to drift over time.  We may start a new fitness routine, but after a few weeks we slowly stop going to the gym.  Some of us may commit to eating healthier, but we quickly become bored with broccoli and slide back into bad eating habits (fried chicken).  Those who are conscious of this effect constantly check themselves to get back on track.  Property tax agents are no different.  When a tax agent wants your business, they will position themselves with all they can and will do for you.  At first, you are the apple of their eye and will be treated like a VIP.  Over time, drift begins to creep in, and you become just another number in their client pool.  If you are not careful-and diligently holding them accountable-it will likely begin to be reflected in your tax savings.  

Hold Your Agent Accountable

The Property Tax Agent Checklist is a free tool that allows you to rate your agent in 10 areas that impact you directly.  They are:

  1. Frequency of updates
  2. Ease of communication
  3. Communication when there are problems
  4. Expertise in property taxes
  5. Requests for information 
  6. Mentality for problem solving 
  7. Investment in your success
  8. Capacity to meet your needs
  9. Commitment to physical site visits
  10. Current on market research

The score your agent earns from your evaluation will help you know if you should keep your agent or seek better representation.  Choosing the right agent for you can mean a huge impact to your bottom line.  Choosing a tax agent once and then continuing to use them simply to keep the status quo is the perfect storm to let drift set in.  The phrase “set it and forget it” is for crockpots, not for tax agent representation.  It allows agents to become complacent, and your results suffer.  As Joyce Carol Oates said, “The great menace to the life of an industry is industrial self-complacency.”  

Trust, but Verify

Your agent should focus on your best interests, but drift can cause them to go astray.  Use the Property Tax Agent Checklist annually to confirm that your agent is giving you the best representation.  Where there are correctable shortcomings, bring them up and hold your agent accountable to make the necessary changes.  You deserve the best agent to help you and your company reduce your Texas multifamily property taxes each year.

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How Does The Property Tax System Work?

Property Tax Basics

Each year, multifamily properties receive a valuation notice and later, a property tax bill.  Property taxes are used to fund local schools, city and county governments, and other local projects.  Since Texas does not allow income tax, property taxes become extremely important for funding the local government.  

Every county has a Central Appraisal District and its responsibility is to determine the market value of each property in its respective county.  To accomplish this goal, they must use methods of mass appraisal and make many assumptions about properties as a group.   

The Central Appraisal District does not determine or tax your property.  They don’t even set the tax rates.  The local taxing units set the rates and collect the taxes.      

Inaccurate Valuations

As you can imagine, a process that makes assumptions for large groups of properties leaves a lot of room for mistakes.  For your Texas multifamily property, you should never assume that your property has been valued correctly.  The valuation should be reviewed within the 30-day deadline, giving you time to appeal it.  For established multifamily properties, they are most often valued on an income approach.  The income approach looks at the net income and a return rate in deciding what a potential investor would pay for the property.  Using market rents and market expenses produces a market valuation, known as Fee Simple.  Using contracted rents and actual expenses produces a valuation known as Leased Fee.  The goal in Texas is to determine the Fee Simple valuation of your property.   

Controlling Your Property Taxes

When you consider all the annual expenses at a multifamily property, property taxes are the largest, typically making up 33% of total expenses per unit in garden apartments and 39% of total expenses per unit in mid & high-rise apartments according to the National Apartment Association 2020 Survey of Operating Income and Expenses.  

Cost cutting measures can easily be swallowed up by increasing property taxes.  Fortunately, you do have options to combat property tax increases.  If you feel your property is overvalued for tax purposes, you can file a protest with the Appraisal Review Board in the county where your property is located.  During the process, you will need to provide evidence showing why your valuation is excessive.  Remember: this is an argument about the valuation being too high, not the property taxes.  Stating that your taxes are too high will not secure a reduction to the noticed value.  If the protest is determined in your favor and your valuation is reduced, this will have a direct impact on your property tax expense.  Paying close attention to property taxes can have a significant impact to your bottom line.

Don’t Ignore Your Valuation

It is so easy to get caught up in other responsibilities and forget the importance of the one little piece of paper stating your property value and appeal deadline.  Yet, that paper can potentially be one of the most significant ways to reduce your expenses and increase your profitability.  In the rush of everything else, don’t forget to look at your property taxes.  If you are overwhelmed by all you have to do, property tax appeals can be taken off your plate by giving it to a multifamily property tax specialist.  Done right, tax agents should expand your capacity while eliminating your stress. 

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Deadlines are Passing, but There is Still Hope for Tax Relief

It is now the middle of May, and notices of value for most Texas counties have been out for several weeks. The time for multifamily property owners to decide whether they should appeal their noticed value has come (and may have passed in some jurisdictions). Under most circumstances, Texas law requires property owners wishing to file a protest of their noticed value to file a written protest by May 15th or 30 days after the delivery of the notice, whichever comes later, as spelled out in section §41.44(a) of the Texas Tax Code.

However, it is common for property owners to miss this deadline, especially following the eventful year that was 2020 and the Artic freeze of 2021. For those that have made this mistake, there is still hope to reduce your taxable value.

Texas Loves its Taxpayers

As stated in previous articles, Texas is pro-taxpayer. They care about their citizens’ rights and offer them numerous avenues for tax relief. Taxable property values are no different. For property owners who missed the deadline to appeal their value, there is still a route for getting a reduction. Texas Tax Code §25.25 provides a taxpayer the opportunity to force a “Correction of Appraisal Roll”. This can be done by proving one of the following:

  • There has been a significant error on valuing the property
  • The appraised value exceeds one-third the correct value

The law is unclear what defines an “error” in this context, but some general examples are:

  • Incorrect square footage of a building
  • Calculation errors
  • Boundary/taxing power issues 

These have been some acceptable arguments in reducing values under Texas Tax Code  §25.25. The Texas Comptroller’s website has a form you can fill out and file if you believe you can meet the above requirements.

You are Not Alone

While a section §25.25 protest is the most common method for reducing values after a deadline passes, there are still several other options for taxpayers with unique circumstances surrounding their notices and properties. If you are a multifamily property owner and your deadline for filing an appeal has passed, do not throw in the towel just yet! Contact a multifamily property tax expert today and learn your rights as a Texas taxpayer. 

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