Last week I got my property tax bill. $5,185. Booooooo.
Many counties across Texas decided that 2020 was a good time to increase everyone’s assessed property value, raising bills by a whopping 10 – 20% for the tax year. It’s a kick in the groin… Because not only are many people under a financial squeeze this year, Texas was already ranked #3 for states with the highest property taxes!
For me, the tax rate is worse than most. While the average county in Texas charges 1.81% of a property’s value, the lovely little county where my rental duplex sits has a tax rate of 2.357%. Ouch! Tax is by far my biggest annual expense. Actually, it’s bigger than ALL other house maintenance, insurance, prop management fees and repairs combined. :(
What can I do? Property taxes are mostly unavoidable, right?
After I got that bummer assessment notice, this year I tried filing my first tax appeal. I was kind of successful, reducing my bill about $200. But I recently learned some other things that might have gotten me a better deal. Stuff I’ll maybe try next year.
Yes, You Can Protest and Appeal Your Property Taxes
Apparently, only 1 property owner out of 10 protests his property tax bills in Texas each year. The other 9 just accept whatever is given to them, or pay without even looking. Most years I’m fine with just paying, but this year the increased property tax assessment was too big to ignore.
Appealing was also free, all done online, and took less than 20 minutes.
My 2020 Appraised Value Notice came by mail in late April. It said my duplex’s current assessed valuation was now $229,040 compared with 209,650 last year. An increase of $19,390, or 9.25%! The value has been increasing every year since I bought the place in 2015. Here’s the tax values and history of increases…
Since I got the first notice in April, mid global pandemic, home sales had stopped, and the stock market was down 30% at the time, I thought there is no way a $229k valuation was fair.
Here’s How I Appealed My Property Taxes (Warning: Amateur Hour)
The notice listed a county website for property tax appeals, so I created a login and filed a formal appeal online.
There were only 2 fields to fill in for the online appeal form… A number field where I could input what I thought the property value should be, and an explanation box to provide evidence or background information on why I was seeking a revaluation.
Since this was my first time and I didn’t know what I was doing, I just entered $200,000 as an approximate value, and then wrote a long angry rant in the explanation box. In hindsight, this was a poor choice because I’ve since learned a few other tricks that could have possibly made my assessment appeal better (which I’ll get into below).
Anyway, 4 days later I got a response that said a manual re-assessment had been completed, and the appeals board dropped the value to $220,047. Not a huge reduction, but lower by $8,993.
This reduction saved me $212 on my bill. Woohoo! Not bad for 20 minutes of work (which really isn’t much effort for any kind of appeal process)!
Ways I Could Have Make a Better Case to Appeal My Property Taxes
After I accepted the reduction in my duplex’s assessed value, I realized there might have been a better way to petition for a lower property assessment. I started googling and seeing how other taxpayers have protested their property taxes. Here’s some tips I found:
Check property records, tax cards, and house dimensions filed with the city. One of the ways county assessors come up with your valuation is based on a taxpayer’s home size, room dimensions, amount of fixtures, and other “features” listed. Mistakes in county records are more common than you might think, especially for older homes. If I found a discrepancy, a feature issue, or something that made my home less desirable, it could lower my taxable value.
Expose known property faults. If I could prove that my property is run down, needed major repairs, or had structural issues, I could include this in the appeal for a lower valuation. Since the ground in Texas moves very slowly over time, almost every house older than 10 years has “evidence of foundation movement” or “irregular soil levels.” Although these aren’t dangerous, I could take a bunch of bad photos and try to sell these property issues as worse than they really are.
This is a photo of “irregular soil level” that the inspector spotted when I bought the property in 2015. Sounds silly, but any evidence I can produce that the property is worse than the neighbors’ will get me a lower valuation.
Another common (but not critical) issue that could be pointed out is roof wear and tear. Proving that the property roof is getting old and showing unappealing photos could lower the assessment value.
Research the neighbors, and be more exact with numbers: Instead of me submitting my request for a $200k round number with no real justification, I should have researched the area and provided my own property comparisons. Using Zillow, Realtor.com, or other home value sites I could have found nearby houses that gave me a lower average fair market value. The county assessor uses this same “comp” method to do their evaluations, but I have to assume they use the higher available comps. I would try to use the lowest.
Be nicer with my request: Instead of ranting and complaining in my property tax appeal, I think it’s a better strategy to leave emotion out of negotiations and just stick to facts. And I’m sure the assessment appeals board appreciates this strategy!
There’s no perfect way to submit an appeal or guarantee that any of this will work. But it’s worth a try I think!? Before any of you property owners out there submit an appeal I urge you to check out your local laws and rights for appealing taxes!
We’ll See What Happens With My Property Value and Taxes Next Year…
While I love owning a property that rises in value, if I can’t increase the rents to match the rising tax bills, the investment slowly gets less and less profitable for me.
Not sure what the rest of 2020 or 2021 will mean for property values, we’ll just have to wait and see!
TLDR; & Summary About Appealing Your Property Taxes
- Appealing my property taxes online took about 20 mins, and saved me $212. It was my first time.
- In hindsight, I could have submitted a stronger appeal by projecting my house as less desirable or more run down.
- Apparently only 1 in 10 people protest their property taxes, at least in Texas. Since it’s free and easy in most counties, why don’t more people do it?
- I just realized I am an idiot… I live in a state with the highest income tax (CA), and own properties in a state with the highest property tax (TX). I should be doing the opposite!
Get blog posts automatically emailed to you!
This must be a Texas thing. Where I live, homes are assessed at 100% of value, so during a resale the assessed value is the minimum floor that a home should be sold at. Most are way above that, but asking for a lower property tax is shooting yourself in the foot. In addition, property tax assessments and re-evaluations are available to potential buyers as public records when requested, so everything you list as bad now is an issue that must be remediated. Your plan sounds crazy to me!
Hey Paul! Yeah, Texas is a non-disclosure state. So home sales aren’t public record. Nobody can find out what you buy or sell a place for (unless you disclose it – then it’s recorded). Taxes are a mess. This sounds crazy, but some new buyers are attracted to a lower assessed values, because it’s a cheaper annual cost.
I’d rather live in your state and not play this game!
My parents had their property taxes adjusted a few years ago (not sure if it’s an appeal in their state or something else). The amount had suddenly jumped up, and when they looked into it they found out the entire acreage of their property had been reclassified as usable land. Which isn’t the case when a significant fraction of the property is practically a cliff. Once it was brought to the county’s attention, the classification was fixed. Always a good idea to look into what you’re paying and why.
Great example – thanks for sharing Bee!
In Arkansas homes are assessed at 20% of their value and then a millage rate is assessed, 4%. So 20% of 4% is 0.8% property tax rate. But real Texans, not you, don’t pay income tax so they’ve got no room to complain about the higher cost. You seem to have chosen your own dilemma, but at least you cut the cost slightly, that’s still a win.
haha thanks Steve. Yep, my tax problems were created by me. Complaining about it gets me nowhere!
Come on Texas! This is really not the year to increase property taxes. Good for you for challenging it. Appreciate the tips because we’ve seen increases as well. I’ll be bookmarking for future reference.
Great to hear Simone! Another reader just emailed me a quick word of caution… He tried appealing his taxes and the assessors office actually *raised* their evaluation. They argued that their initial tax raise was too low! So his advice was to do a bit of local research before just submitting a claim willy nilly! Something I will be doing next time also. It pays to look at the neighbors and online comparable values in the area.
Have a great week and good luck!
WHAT?! Talk about backfire. Thanks for the additional tip. Will be sure to proceed with caution.
Joel,
I thought this was a super helpful post – I have never appealed to my state’s taxes but actually will revisit some of the appraisals and see if there is a chance to lower my taxes Hey – if it can save me north of $200, why not?
I love learning new things every day – thanks for sharing.
The Millennial Money Woman
If the process is fast and free, then why not? 2020 is a strange year for real estate – some values have plummeted and in some areas they’ve skyrocketed. Just do some research before submitting an appeal to make sure you know the fair value of your place :)
Sorry to hear about your property taxes increasing Joel! Glad you were able to get it down a bit.
I started protesting my taxes a few years ago for the mobile home business after years of one of the park managers I work with telling me I need to do it. So, I finally did. And, I’ve been watching them ever since.
Honestly, the process isn’t that bad. I go in person to file. And have negotiated both over the phone and in person. It’s more of a mini small claims court.
A lot of people are kind of scared to do it. But, the people who hear the cases are really nice (in my experience) as long as you’re respectful and have your case together. Personally, I’ve seen some people just go in there (both homeowners and landlords) without any type of evidence to bring in and just wing it.
In these cases, it’s kind of hard to argue a case. I do a lot of research and also take pictures (hard copy) that I bring to hearings as evidence. Usually, they don’t take digital copies. They give it all back to you at the end. They definitely don’t want the extra papers!
I wrote about the process and my experience in one of my newsletters a while back. Though maybe, I should write a post about it in my blog. You’re giving me ideas! :)
Thanks for sharing your experience with the tax protest. Good read!
Hey MHG – I’d love to read about your process and the way you do it. In person seems pretty nerve wracking, but I guess if you’re respectful and well researched then you should be able to expect the same respect from the assessor. Thanks for sharing – send me the link if you write up a post!
Thanks for the motivation! In Boston, one has to call and plead one’s case on the phone, which I did today and wasn’t actually as terrible as that sounds.
After talking with the guy, turns out my home has “modern” bath/kitchens meaning renovated in the past three years which they weren’t. He wanted me to just email pics of the kitchen and baths to show they’re not too fancy.
The view from the property was listed as “excellent,” so we looked at adjacent properties whose views are “average” and he agreed that mine should be the same (it’s actually a decent view, but it should be the same as my neighbors!).
Normally they’d come out to look around, but the pandemic makes this a bit easier for us! Cheers!
SWEET! Pay it forward –> tell another local friend your story and get them saving $$ too.
The pandemic is horrible, but there are certainly some benefits to having no in-person processes like this. Quick and easy!
If you think $5 is high, try $8K+ for a condo. :) That is South FL for you.
Wow – I didn’t know Florida was that expensive for property tax!
Bookmarking this! We just bought a house in Texas this year and will definitely use this as a guide when the time comes to protest my property taxes!
Sweet! This was my first time – so it might be worthwhile googling other tactics and success stories to get more ideas!
Good luck and let me know how it goes!
I’m looking to do this where I live in MI. I emailed the tax tribunal to see where they can point me to so I can appeal online and how to do it. Are there templetes and videos on how to fill out the forms and state good reasoning to save money on city property taxes?
From my understanding, each county has different processes and forms. So you’ll prob need to search around the internet for people that have appealed before in your location and talked about it. Sometimes there are also small law firms that will negotiate taxes on your behalf 9and then take a portion of the money saved). The probelm is if your case isn’t large enough they may not want to take it for only a few hundred in profit.
I’m not sure how *city* taxes work. I believe the county handles the appraisals, not the city.
Hi Joel,
I’m sure you’re aware of this but I found something called a Homestead Exemption when googling ways to lower property taxes.
https://comptroller.texas.gov/taxes/property-tax/exemptions/residence-faq.php
Just going to put that out there incase it’s relevant/helpful to anyone browsing :)
Hey there Hannah! Since I don’t live in this place, I can’t claim it as a homestead. :(. But others may be eligible for this stuff. Thank you!