Property Tax 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 property tax 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.