How Can the Central Appraisal District Keep Raising My Value?
This Feels Illegal
You didn’t do any work on your property and yet the value still increased. The taxes are crushing you and you may have wondered, “How is this even legal?” It might seem unfair, unjust, and downright illegal to be taxed out of your property. Unfortunately, it may not be fair, but it is legal. It all has to do with how properties are valued on a large-scale using market factors.
Property Value Changes
Texas law does not limit the amount of an increase or decrease to your property value by the Central Appraisal District (CAD). The CAD is tasked with finding what they determine to be your market value. They achieve this purpose by gathering sales of similar properties in the market. Additionally, they gather market surveys regarding rents, expenses, and cap rates. Once they have this information, they look to see if the market values are trending up or down. They use this information to determine what happens to your value. Most often, the values in real estate trend upwards. This is likely why your value has continued to increase, even if you have not done anything to further improve the property.
CAD’s Limited Knowledge
The values determined are based on generalized models for the market[1]. It is highly unlikely that your property is exactly in line with the model. You may have some deferred maintenance, or there may have been an issue with your property during the past year that has negatively impacted you. This information is what the CAD is missing when valuing your property. It is through your protest that you may provide the CAD with this additional information and seek a lower value. As you prove your property is not in line with the model, the value should be reflected to show it.
Here is a real-life example: one multifamily property owner I encountered had their property assessed and valued per the CAD’s model. The value increased. What the CAD didn’t know was the property had suffered a fire and lost an entire building of 16 units! The CAD was completely unaware that the property did not follow their model, and it appears the tax agent was unaware as well, since they did not file a protest. Unfortunately, the taxpayer was burdened with excessive taxes because their value was not reduced. Had an appeal been filed and the value reduced, the owner would have been able to use the tax savings to rehab the building in a more expedited manner.
Don’t let this happen to you.
Schedule a call with Wayfinder Tax Relief today.
[1] Texas Property Tax Code §23.01
