Property tax protest problem (Miami: houses, neighborhood, buyers)

[sazza]

Our home is in Harris County. The house is a ranch house built in 1955 and in very average condition but liveable. It is true we are surrounded by new houses. Each year for the past three years, the home has been appraised at a value increasing by $20-40,000. This is puzzling since house prices in the areas has been flat quite flat for at least the last 1.5 years. I notice that what the valuer is doing is increasing the land value by a lot but decreasing the value of the actual house.

The latest news is that my husband decided to personally go to the Valuer Office to explain the situation. Unlike when we spoke to them on the phone, we were told that the evidence we had that showed we paid $60,000 less than the valuation would mean that the value will automatically decrease by that amount. We were told that we should submit the protest and explain why it was late, and that it had a good chance of getting through since the Office is extremely backlogged. (We haven't received our tax notice yet. I thought it was supposed to come in Oct?) Also, we probably have to pay the tax on the higher value this year and that next year, we would get a tax credit on this. I am not entirely sure this will happen since it was told to us verbally.

Regardless, we are still shocked that valuations are so arbitrary and can go up so much in one year.

[sunny57]

From what I remember there is a 10% ceiling on residential property taxes. If they appraised your property $60k above purchase price and this value exceeds the 10% allowable, you may have an easy fix. If not, you will have to "bite the bullet" and prepare for next year. The fight would not be worth the fees!

Best of luck...

[donkjah]

i live in a kb home kb homes are great homes for property tax fighting! since there is such a negative image on kb homes i take that negative image and run with it to the tax office and appeal my taxes every year. my first year appealing i knocked off over ten thousand dollars off my appraisal value with out even showing up for a hearing or going to court. for info i can be reached Moderator cut: with the DM/email feature here at C-D

[MissDaisy]

Originally Posted by ayannaaaliyah

I think what is happening in some other counties is that the property value is increasing, but they are raising their homestead exemption to offset the increased tax (I think I worded that correctly).

I am sure I must be missing some part of the equation...or just plain a dummy, since what would be the point of what seems to be a bureaucratical
*shell game* which wouldn't increase revenue. I must be confused..please
clarify for me?

Originally Posted by ayannaaaliyah

In the OP case, I don't think they would qualify for the exemption, especially if it's not their homestead.

Just so I understand TX homestead laws...the reason the property the OP has is not "their homestead" is that it cannot be homesteaded by them until the January following their purchase? I am asking since, for instance, we purchase our home in say, April, we then would not be eligible for homestead until the following January, right? Are there any additional adjustments or allowances for over 55? over 60? etc??

[EasilyAmused]

HCAD is hot crazy this year. For the first time I can remember they're upping the improvements drastically vs land value. Both houses I own were built in the 60's. One took a 60k jump in improvement value, the other (not homesteaded) got hit upwards of 150k. The lot value held steady, yet that's what makes the houses valuable. The good thing is you can protest improvement increases, but not land increases. So you better believe I'm going in this year.

[MissDaisy]

EA--That's insane!
..please tell me if the following I was told is accurate...not inclusive of any homestead, is it correct that the land and improvements are subject to
tax of 90% of the property value?? Then the homestead exemption is $15k
reduction of the 90%?

[EasilyAmused]

You are Montgomery County right? I don't know how they play up there. I only rented. But my friend told me they taxed at 100% market value.

My holdings are in Harris. Basically they can tax you full market value of the house, less homestead. There is a 10% cap on what they can go up every year, UNLESS they catch you doing an improvement or you get a permit to do work on the house. If there's no homestead, it a free for all for the county. They know what houses are selling for in your neighborhood and they are very fast approaching full market value for appraised value. Used to be they were 100-200k under what you could sell for. But when they raised, it was on the land. These old houses are supposed to depreciate NOT appreciate. Any work done is mostly to keep it from falling or burning down. I have no clue why they are going after the old houses this year vs. the land.

One of my houses is capped and homesteaded, thus the 10% only increase. ONLY <cough> The other is not homesteaded and not capped, and I pulled a plumbing permit on it because a pipe under the house broke. That's fixing, not improving. What pipe is worth 150k?

[jimboburnsy]

Originally Posted by MissDaisy

Just so I understand TX homestead laws...the reason the property the OP has is not "their homestead" is that it cannot be homesteaded by them until the January following their purchase? I am asking since, for instance, we purchase our home in say, April, we then would not be eligible for homestead until the following January, right? Are there any additional adjustments or allowances for over 55? over 60? etc??

Basically, HCAD will honor only one set of exemptions for the tax year. In other words, if you buy from someone with an over 65 exemption in 2007 you will pay taxes for that year based on whatever exemptions they had in place Jan. 1 and if you buy a new home you will pay taxes based on property with no exemptions until you file your homestead in 2008. Either way, the exemptions are set from Jan. 1, 2007 to Jan. 1, 2008. There are exemptions for over-55 surviving spouse and over-65. At that point I think that you stop paying HISD tax, but I'm not 100% on that.

HCAD has figured out a devious way to extract more taxes from homebuyers, however. Each year you will receive an inquiry from the appraisal district that you return to them as proof that the home is occupied (an unoccupied home can not be a homestead). Whether by design or by happy accident, HCAD sends out their inquiries at the start of the real estate busy season when the seller is often not occupying the home and may miss the mailout. If there is no response, the appraisal district lifts all the exemptions on the property retroactive to Jan. 1. I had the same issue and was able to get the exemption re-instated by working with the seller and making a very concerted effort that required a lot of legwork and time spent listening to the maddening hold music on the HCAD and Tax Assessor's hotlines. The seller was motivated because he would probably be liable for his prorated share of the additional taxes for that year if we went to court.

My advice to you is to get the seller involved, make as much trouble as you can and be impossible to ignore or they WILL ignore you. HCAD makes a lot of money off of laziness, so don't be lazy. My seller was able to argue that the primary occupant was in rehab following a stroke during the time they sent out the inquiries, it was simply a matter of finding someone with some stroke and decision making capacity to tell the story to. Keep in mind that anyone answering phones at the HCAD hotline is a moron. You will probably need to make appearances at the physical office to get anything done and even then you will be dealing with a big, fat, blind bureaucracy that has a more inertia than brains.

Good luck... This will be a taxing process but it feels good to stick it to the man. Actually, the man is still going to be sticking it to you, but good luck anyway.

[davidt1]

Yes, you definitely have to protest. I know how lazy and incompetent tax officials play this game.

[wiseal1]

There are companies that specialize in protesting property taxes. I own a few rental properties, and I protest my taxes every year. There are some companies that charge you upto 50% of what they saved you. There are some that will work with you on the % fee. You should protest every year. It's appauling how much taxes have gone up!