Property Taxes in Texas
Texas follows a unique approach when it comes to property taxes. Essentially, property taxes are a type of tax levied on the value of physical & tangible properties, such as land, buildings, and their improvements. Property taxes are a significant source of revenue for governments and play a crucial role in funding public/community services, but Texas has no state property tax.
Instead, the valuation of property taxes in Texas is carried out by local authorities. This way, communities have more of a say in how the taxes they pay are used to support public services and initiatives.
In this article, we will dispel common myths associated with filing property tax appeals and how homeowners can lower their tax burden in case they are dissatisfied with their property appraisal.
Where do the property taxes go?
Considering that the state government receives no benefit from these taxes, property taxes in Texas are paid to the local government and are used to fund community services like education, infrastructure, fire protection, and so on.
What do ARBs do?
Appraisal Review Boards (ARBs) are independent bodies consisting of a group of citizens who are given the authority to resolve disputes between taxpayers and the appraisal district. ARBs review the taxpayers' appeals on the estimated property taxes. They also deal with issues that arise when a taxing unit wants to challenge the appraisal district's actions.
ARB hearings usually start around May 1 and are expected to be finished with most of the protest hearings by July 20 of the respective year. Besides reviewing estimated property taxes, they are key decision-makers for appeals made by taxpayers to ensure fairness and transparency.
Why should you protest property taxes?
Incorrect valuations can result in an unfairly high tax burden for homeowners, especially for those on fixed incomes or facing financial challenges. This unanticipated stress from an increase in property taxes restricts budgets, as well as a homeowner’s ability to save, invest, or meet other financial goals.
Protesting property taxes when incorrect valuations are made helps to lower that tax burden. In the case of economic hardship, protesting can also be used to find temporary relief from paying the tax.
When should you protest property tax?
You have the right to protest your property taxes if you feel that the evaluation is inaccurate. Texas allows you to protest your property tax bill if it meets any of the following conditions:
- Incorrect valuation of the property
- Unequal Appraisal
- Denied any exemptions (including temporary exemptions)
- Denied special appraisal
- Incorrect Taxing Unit
- Change of Use (of the property)
- Wrong Appraisal Records
- Failure to Notify
Common myths while filing for an appeal
Protesting property taxes is fairly easy, but there are some common misconceptions on the subject.
Only the rich can afford to protest
Protesting property tax is for everyone. Filing a successful protest can seem like a chore, but with the right appeal statement, you stand a good chance of lowering your tax. You can also opt for professional services like Bezit, where we have a 90% successful appeal rate.
Protesting invites trouble with authorities
Local authorities cannot retaliate against property owners, as protesting your property tax is a legal right. The process of filing taxes is meant to be completely fair and transparent, so it will not invite any trouble by choosing to do so.
Protesting is too complicated
When done right, protesting a property tax assessment isn’t too complicated. Most jurisdictions have clear guidelines and deadlines for property tax protests. With careful preparation and attention to detail, property owners like you can navigate this process with ease.
The county’s tax estimates are accurate
Taxes estimated by the county may not always be accurate. Data errors or omissions can lead to incorrect valuations, resulting in incorrect tax estimates.
Protesting will automatically reduce taxes
Protesting does not guarantee a reduction, but it initiates a review process where the property owner can provide evidence to support their claim.
It’s not worth the effort for the small sum
As taxpayers, you should only pay your fair share. You never know how much you will end up saving after you protest your taxes and no matter how little you save, over time, it will make a noticeable difference in your overall finances. In addition, once you successfully file a protest, the following years’ taxes will use that lower base for tax assessments, creating a cycle of ongoing savings.
Protesting will impact local services
Even though property taxes are the largest source for crowdfunding community/public services, protesting an unfair tax assessment does not impact these services. They result in a lowered tax liability for property owners, and local governments adjust their budget according to the available revenue as it changes each year.
Protesting = Not paying tax
Protesting only implies that there might be a chance for you to pay less tax on a property you own if any errors in the tax estimate are found.
Protesting is a one-time process
Protesting property taxes in Texas is not a one-time process. Property owners in Texas generally have the right to protest their property tax assessments each year, so long as they meet certain deadlines and requirements set by their local appraisal district.
We’d recommend checking with your local appraisal district or tax assessor, as the deadlines do vary. Usually, the deadline for filing a protest is May 15th or the 30th day after the notice of value was delivered to the property owner (whichever date is later).
Once you have successfully protested your property tax appeal, the adjustments in your corrected tax estimate or base are carried over to the coming years, which results in long-term savings.
Protesting is a quick fix
Protesting is not an easy fix, as it’s a legal procedure to allow property owners to challenge their property tax assessments if they believe their tax estimates are valued incorrectly.
Now that we have cleared up some of the common misconceptions about property tax appeals, we highly encourage you to exercise your right and pay your fair share of taxes. A few tips to keep in mind, before filing a tax protest, you should review your assessment thoroughly and make sure to gather all the evidence you can. This includes recent property sales data, historical data, past assessment data, photographs, or documentation of property improvements.
The higher the quality and relevance of the evidence, the greater the chances of your protest being successful. While you can represent yourself in a property tax protest, you can also choose Bezit to support you through the process, with services starting as low as $19. We will accompany you through every step of your appeal and have helped over 500 customers with a 90% successful appeal rate.