Thanks to a booming real estate market in North Texas, assessed property values have shot up again this year. Here are some ways to approach protesting your value to hopefully take a least a little of the sting out of it.
First, get comparable sales (aka “comps”)
Talk to your friendly REALTOR® (that would be me) and ask her for some comps for your area. To have the most sway, the comps should be recent sales. Dates the County Appraisal District, aka “CAD”, will consider for comps can vary, so contact your local CAD to make sure of what they consider “recent”. Generally speaking, the comps should be as close to January 1, 2016 as possible, but they will consider comps from January 2015 – May 2016. The comps should also be homes most similar to your own – same builder, +/- 5 years in age, +/- 10% in square footage – and as close as possible, same neighborhood is best.
Now, get brutal
Pick your house apart and take photos of every singe thing that isn’t great about your house. Need new carpet? Take a picture of the nasty old carpet. Have an original roof? Fence leaning because of the recent storms? Take a picture. Need to paint? Take a picture of old chipping paint (inside & out!) You get the idea … Do you have quotes for work that needs to be done? Even better! Include all of those.
Additional information that will help
In the last year, did you have an appraisal done for a refinance or purchase of your home? Assuming the appraisal was less than the assessed value, take that along with you! If you purchased the home in the last year, did you pay less than the assessed value (and less than the appraised value you received when you financed the house)? Then take a long a copy of the Settlement Statement (or Closing Disclosure) you received when you closed.
How to file the protest?
The easiest way to file your protest is to do it online. GASP … You don’t have to go sit at the CAD office for hours??? Nope! The online forms are simple, and you’ll usually get an answer in a matter of hours, especially if you don’t wait until the last minute. To file your protest online, you’ll need the original notice of the assessed value you received from the CAD. The instructions along with the website and a unique efile PIN are printed on that notice. You MUST have these to file in most counties. Some counties have a way to retrieve the information through their website. Check there for more details.
So, you filed online but they shut you down. You can STILL go in person for an informal protest (taking along ALL of that wonderful documentation you have) before May 31, and/or you can file a formal protest and request a hearing before the Appraisal Review Board. No matter what, your formal protest request must be postmarked by May 31. A formal protest request can simply be done by letter (include protesting property owner’s name, identify the subject property and indicate the reason for protesting) mailed to your county CAD office, or you can use a form provided by your local CAD (this is Collin County’s, for example).
Let’s set some expectations.
Will your value be lowered? Maybe, maybe not. Our real estate market is HOT. Market prices are still rising rapidly. And, the truth is that you never know what kind of mood the person reviewing your assessment is in, and their decisions don’t always seem to make logical sense, sadly.
Will you save stacks of cash by protesting? Probably not … right now. You’ll save approximately 2 ½% (or whatever your tax rate is) of the amount your value is lowered. A $5,000 reduction = $125 in tax savings. BUT, that’s $500 less (assuming you have a homestead exemption) they can raise it next year, and so on. So the savings is compounded year over year.
Is it worth a few minutes to see what impact you can have on it? Absolutely!
Let me know if you have any additional questions in the comments, and GOOD LUCK!