Building a house - how does assessed tax value compare to purchase price (Austin: sales)

[LI2Texas]

Hi All,

My husband and I are building a house in Meridian. I know that the tax rate is about 2.3% of the assessed value of the house - I was just wondering in anyone has any experience in what the assessed value of the house will be compared to the purchase price.

Thanks!

[RooCeleste]

Ours was right on the sales price. I was able, however, to get them to drop the assessed value by a couple of percent so now it is a bit lower than the purchase price. We're in a 2.45% area (Williamson County, City of Cedar Park, RRISD, plus whatever else is mixed in there).

[LI2Texas]

Thanks for your response. How did you get them to lower the value?

[austin-steve]

Originally Posted by LI2Texas

Thanks for your response. How did you get them to lower the value?

You can only get the value lowered if it's over-valued. Then you protest and show them your evidence. But if the appraisal district has correctly valued your home, you'll be paying exactly what you're supposed to pay.

Steve

[LI2Texas]

I get that. I was more interested in how you "protest" I am kind of picturing myself picketing with a sign outside my house... I am sure that is not the way. In NY- where I am from - you would hire a lawyer and go from there. So the process could be very expensive even if you got no results. How do you proceed here in TX?

Thanks :-)

[FalconheadWest]

On a brand new home, you really don't have much of a leg to stand on when fighting your value if they use your purchase price. They know what the builders are charging, and it's going to be assessed as such.

As for the protest, there are a couple of steps. Each May, you're sent your year's value. You have until the end of the month to file a protest, in which the form will be mailed to you with your value. You are sent a date to appear for an informal hearing/conversation. If you're not happy, you continue to the formal hearing with the appraisal review board...

If you're still not happy, now the money comes in. You file arbitration with the Comptroller's office, pay $500 or $250 depending on if you want a fast hearing or as much time as needed, and you submit evidence to the arbitrator as to why your value is not right. I'm on the Comptroller's registry and see cases year round. Some people paying more for arbitration than what they would save on the lower value. It's out of principle for some while it's out of nonsense for others.

If you're right, you get your money back minus $50 for paperwork stuff. If you're wrong, you lose the money you paid.

[hoffdano]

I have protested twice - most recently this year. It is as Falconheadwest describes. It is a no-fee process assuming arbitration isn't required. It is not difficult or uncomfortable - but you have to do your homework to gather evidence to justify your position.

Both times my protest was successful (to me).

[RooCeleste]

My "protest" was simply going into the Williamson County appraisal district and pointing out that the same floorplan was now many thousands dollars cheaper AND that the builders were now building the same sized houses much cheaper. The tax man pointed out that another builder had sold several houses, with the same square footage, for about $40K more than mine, and that's what he would use to determine my value.

I knew it was appraised correctly, because it was right on with what we paid (we got a great deal, so technically it was probably under-appraised), but I was still determined to try. He conceded that he could drop it by however many percentage points (1 or 2, can't remember) as a courtesy. So he did. It only saves us a couple hundred dollars, but still, that's a couple hundred dollars!

[TexasHorseLady]

If you do decide to protest (and in a new house, it's going to be more difficult than a resale, because, in essence, your house IS the comp because you paid what you did for it and that sets its value), make sure you do your homework.

I've protested our tax valuation a few times, both residential and ag (well, was defending our ag in that case, on the basis that yes, the cows were there, they were just in the good pasture over the hill out of sight when the appraiser did the drive-by). Only once had to take it as far as the formal hearing. Make sure you've got good comps, and make sure you've got documentation (photos - they love photos) of anything that would make your house less valuable than the comps. Also, make absolutely sure that you know that the comps you use aren't foreclosures - I had a situation one year where the appraisal's rep at the formal hearing said that one of my comps, the best one, was a foreclosure and asked the committee if they wanted to use it and they threw it out - and when I went back and researched it, it was not a foreclosure, have no idea what hat he pulled that one out of. So know ALL of the details about your comps - it could come in handy. (This is general, rather than being specific to a new home.) Oh, and make sure to ask them what comps they're using to set your valuation - they have to provide them, but you have to ask!

One thing has changed - they used to have a limit of how far back or forward in time they could go to find good comps, and now that limit is off. Discovered that when I was protesting our tax valuation on our house in Austin this year.

[HappyTexan]

I protested twice...once when after purchase and again after refinance.

Both times the county over valued the home.
Both times I took closing papers to get the assessment modified.

That's my only experience. Once they saw the closing papers there were no issues..they modified the assessment to the value on the paperwork.