January 10, 2021

Filing a property tax appraisal protest in Texas? Here is how to do it.

Since the abolition of State Property Tax in Texas, local governments set tax rates, assess properties, collect and utilize taxes to provide various services. The local property tax is the largest single funding source for community services. Property value determines the amount of tax levied on a property owner. The taxation of landowners is often handled by multiple agencies such as school district, the city, county, hospital district, junior college district, and water district. Consequently, substantial personal or business land ownership purposes means large tax bills.  However, this can be minimized with an intervention. Property owners in Texas have the right to file a property tax protest to ensure that their taxes are equal and uniform as required by law.

Owners can file for a protest if their property qualifies for any one of the following reasons to demand a decrease in taxes.

  • Changes in the appraised or market value of property.
  • Unequal appraised property value compared to other properties in the area.
  • Tax exemptions that may apply to the property.
  • Agricultural or timber appraisal.
  • Change in land use.

Requirements to be met to file a protest

  • The property owner as of January 1 of each year may file the protest.
  • If your business leases property and you are required to pay the property taxes, you may file the protest if the property owner does not.
  • Your assessed property taxes should be paid up-to-date when you file the protest and throughout the process.

The process for protesting property tax appraisal

The first step to protest is to file a form with your County Appraisal District (CAD). The deadline to file is May 15. In some cases, owners have until 30 days after a notice of appraised value is mailed. The Appraisal Review Board (ARB) at its discretion may also accept a late protest for good cause. ARB is a board of citizens responsible for the adjudication of property tax protests. An informal hearing is organized with the CAD to resolve the issues. If an agreement cannot be reached, you are automatically set for a hearing with the ARB. The ARB then notifies you with a date and time for the hearing. Property owners can request for the hearing to be during the evening or weekends if necessary. Alternatively, a property owner can appear for the hearing via a conference call or submit a written affidavit. A property owner can also be represented by an attorney if he cannot be present at the hearing. A protest hearing works just like a trial. That means a property owner has the right to review any evidence that the CAD wants to submit, before or immediately after the hearing begins. The owner filing the protest or his attorney are allowed to cross-examine the CAD representative at the ARB hearing.  A written copy of the ARB's decision is mailed to the property owner.

What next, if unsatisfied by the ARB’s decision?

If unsatisfied by the ARB's decision, the owner can appeal to the District Court, appeal for binding arbitration or file with the State Office of Administrative Hearings (SOAH).

A property owner has the right to appeal to the District Court. The petition must be filed by the property owner's attorney within 60 days of the ARB's decision. The appraisal district is expected to file its response within 20 days after a petition is served. The next step is discovery, where your attorney gathers evidence from the appraisal district to build a case. Discovery can occur in several forms, including interrogatories (written questions answered under oath in writing), requests for production (a legal request for written documents and/or electronically stored information), and depositions (questioning under oath). If there is no settlement out of court, the lawsuit goes to trial. The judge or jury only consider the evidence presented at the trail. The ARB's hearing is not admissible evidence.  A judgment in the owner's favor could also get him the attorney fees. If not, the trial may be escalated to higher courts up to the Supreme Court of the United States.

When a property owner appeals through binding arbitration, both sides present their cases and evidence in a hearing to a neutral arbitrator, whose decision is enforceable by law. This is an option for owners whose property's value is less than $5 million, provided he has not filed in a District Court. A property owner can file for arbitration within 45 days of receiving the ARB's decision.

To appeal the ARB's decision by filing with the SOAH, the property's value must be over $1 million and the appeal should be about unequal appraisal, appraised value or market value of the property.

The property owner files a Notice of Appeal with the chief appraiser of the appraisal district within 30 days of the ARB's decision to begin the process, after which the owner is required to deposit $1,500 within 90 days.

But is filing a protest a financial risk?

The answer is simply no. There is no fee to file an initial tax protest. One can initiate an appeal process online.  Analysis says that property owners do better and reduce up to 54% more on their tax bill when they self-represent.

Even if a property owner decides to hire a protest firm, most charge only if they are able to get a reduction on the property tax bill.

There is little or no financial risk for a property owner in filing a protest.

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Articles presented here are for general information and education only. It is provided as a courtesy to the general public. SQD Taxtech LLC does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. This article may not be reproduced, distributed or further published by any person without the written consent of SQD Taxtech LLC. Please cite source when quoting.

SQD Taxtech LLC, its managed affiliates and subsidiaries, as a matter of policy, do not give tax, accounting, regulatory or legal advice. Rules in the areas of law, tax, and accounting are subject to change and open to varying interpretations. You should consult with your other advisors on the tax, accounting and legal implications of actions you may take based on any strategies presented, taking into account your own particular circumstances.