Property tax appraisal questions (West: sales, real estate, 2014)

[pharpe]

My wife and I bought a new house in Lakewood and closed on January 3, 2014. We just got an updated tax appraisal they raised our taxable value over $200k. The house was last appraised by DCAD in 2012 for $238 and in 2014 it went up to $452. No major renovations were done. Only cosmetic stuff like paint, landscaping, etc. I had these questions:

• I know I can protest my self but is there any added value in getting a lawyer to protest?
• Is there no way to file a homeowners exception because we closed on 1/3 not 1/1? Can this be appealed?
• If I protest myself what is the best strategy? I can bring the inspection report showing the deficiencies and repair costs. Anything else?
• I thought there was a 10% cap on how much they can increase the taxable value per year?

When we bought the house we were given the yearly tax information and used that for our monthly payment budgeting. Now that has suddenly doubled.

[TurtleCreek80]

What did you pay for the house? I'm assuming pretty darn close to $452k, right? DCAD has a way of finding out what people paid and you will usually see the taxable value rise to that the year you close. Your realtor should have told you that for budgeting purposes.

[lakehighlands]

Originally Posted by pharpe

• Is there no way to file a homeowners exception because we closed on 1/3 not 1/1? Can this be appealed?

You can attempt to file your residential exemption with DCAD but it will be denied because you weren't occupying the property as of 1/1/14. Along with the denial letter, you will receive a board date to appear before the Appraisal Review Board Exemptions panel. It will most likely be denied here as well.

Originally Posted by pharpe

• If I protest myself what is the best strategy? I can bring the inspection report showing the deficiencies and repair costs. Anything else?

DCAD increased your value based on the purchase price. Your only worthwhile avenue will be appealing on an Unequal Appraisal(Section 41.43 of the Texas Property Tax Code). You will need to compare your home to other homes in your immediate neighborhood, making sure to choose comparable properties(sq ft, CDU rating, land value, etc).

Originally Posted by pharpe

• I thought there was a 10% cap on how much they can increase the taxable value per year?

The cap only applies to homesteaded properties and it would not have applied to your property even if you purchased before Jan 1st because of a change in ownership. The cap threshold disappears when the property sells.

Originally Posted by pharpe

When we bought the house we were given the yearly tax information and used that for our monthly payment budgeting. Now that has suddenly doubled.

As TC stated, your realtor should have disclosed to you the fact that your property would most likely be reassessed near the purchase price. Your realtor also should have pushed for a closing date prior to Jan 1st to ensure you would be able to get your homestead exemption.

[FalconheadWest]

Protesting is a fairly easy process, but most home owners don't do it themselves because of the time involved. Depending on how valuable your time is, will help determine if you want someone else to fight it. It doesn't need to be an attorney. You can high a real estate person, an appraiser, a property tax consultant, or an attorney. You could even have your neighbor represent you, it doesn't matter. Just trying to say it doesn't need to be an attorney.

Most property tax places will protest on contingency and retain a percentage of the tax money saved. Some 30% and some as much as 50%. Again, how much is your time worth?

As answered above, the 10% Homestead cap only applies after you've filed the Homestead. The first year you file is your base value, and the years following can only go up 10%. Since you closed on 1/3, next year you still won't be elegible for the cap because your first year will be next year. It's never very smart to close the first week of January unless you really had no other option. The good news should be that if the homestead was on the property from the previous owners, you would still benefit, but if they already bought a new house in December and claimed their homestead on their new house, it would have fallen off.

And remember, the assessed value has no cap year to year. Only the TAXABLE value has a cap.

If you fight, don't go for market value as you know the market has increased. Go for unequal. Even if market value is higher, but you're being taxed unequally, unequal wins every time. There's a new article out about it, as I'm an Arbitrator for the Comptroller's office and we have to keep up with these new changes.

[Transplanted99]

Originally Posted by FalconheadWest

If you fight, don't go for market value as you know the market has increased. Go for unequal. Even if market value is higher, but you're being taxed unequally, unequal wins every time. There's a new article out about it, as I'm an Arbitrator for the Comptroller's office and we have to keep up with these new changes.

Looks like a good tip...does this apply to Collin county too?

And where do we find these articles? Thanks.

[roseball123]

Originally Posted by FalconheadWest

If you fight, don't go for market value as you know the market has increased. Go for unequal. Even if market value is higher, but you're being taxed unequally, unequal wins every time. There's a new article out about it, as I'm an Arbitrator for the Comptroller's office and we have to keep up with these new changes.

What is a good strategy to fight unequal appraisal for the below scenario for 2 houses in the same neighborhood:

House A: Built 2003 by Top rated builder, same sqft, better interiors - Appraised 105/sqft

House B: Build 2011 by tract builder, same sqft - Appraised 110/sqft

The houses are in the same neighborhood and 2 streets away.....

What is the best way to protest this.....

[FalconheadWest]

Originally Posted by Transplanted99

Looks like a good tip...does this apply to Collin county too?

And where do we find these articles? Thanks.

It's a state law so it applies to all counties in Texas:
http://recenter.tamu.edu/pdf/2062.pdf

Originally Posted by roseball123

What is a good strategy to fight unequal appraisal for the below scenario for 2 houses in the same neighborhood:

House A: Built 2003 by Top rated builder, same sqft, better interiors - Appraised 105/sqft

House B: Build 2011 by tract builder, same sqft - Appraised 110/sqft

The houses are in the same neighborhood and 2 streets away.....

What is the best way to protest this.....

These are two completely different houses and should not be used in the same comparable sample. Size isn't what's important. They look at other properties built around the same time and 8 years apart as newer homes are too far apart. Comparing 1960 with 1968 is not too far apart, but 2003 to something most people would consider practically brand new do not compare.

And if the interiors are vastly different with finish out, you need to prove it. You need to show pictures. You can't just talk and say, "This house has granite, this house has formica. This house has carpet and this house has hardwoods..." They aren't going to believe your words. They want proof and then they'll down grade the lower quality property, or upgrade the other one. It could go either way depending on how they want to interpret the evidence.

[BigDGeek]

Originally Posted by TurtleCreek80

What did you pay for the house? I'm assuming pretty darn close to $452k, right? DCAD has a way of finding out what people paid and you will usually see the taxable value rise to that the year you close. Your realtor should have told you that for budgeting purposes.

This. When my property was reassessed in '10 (purchased in '09), it was well over what I paid for it. I bought it for less than its tax appraised value. I protested successfully and got it back down to my purchase price.

Originally Posted by FalconheadWest

And if the interiors are vastly different with finish out, you need to prove it. You need to show pictures. You can't just talk and say, "This house has granite, this house has formica. This house has carpet and this house has hardwoods..." They aren't going to believe your words. They want proof and then they'll down grade the lower quality property, or upgrade the other one. It could go either way depending on how they want to interpret the evidence.

Great point. I took photos of the interior of my house and printed photos from real estate listings for homes on the market that were priced at or under my tax appraisal so they could see the disparities, but it turned out that I never had to show them because I nailed the "appraiser" lying about having seen my house in person when appraising it. (He had not, and admitted it.) But I did have all of that ready to go if I needed it.

[pharpe]

I went on Friday and did the informal interview. It was a complete waste of time. I took lots of pictures and brought estimates of repairs including foundation work. The appraiser refused to look at any of. He just keep repeating that since I recently bought my house the sales price was the market value. I reiterated that my protest was on the grounds of unequal appraisal not market value. He told me he wouldn't consider that and if I wanted to take that route I would have to request a formal hearing. He would also not show me any tax rates of comparable homes in my area.

[aggieplaya]

What did you pay for the house?