Unequal Appraisal: How to Lower Your Property Tax Using A Comp Equity Grid?

What is a comp equity grid? How to find comparable properties?

Texas Property Tax Code provides relief to a property owner if the appraised value of the property exceeds the median appraised value of a reasonable number of comparable properties appropriately adjusted. The challenge then, for a homeowner, is to:

1. find a reasonable number of comparable properties
2. adjust them appropriately
3. calculate the median appraisal value of such a set of properties.

A comp equity grid is a matrix arrangement of the subject property, its characteristics, appraised values vs. those of its comparable properties. Comparable properties should generally be in the same neighborhood, close in age, size, quality, condition, construction type and other attributes. The appraised value of each comparable is adjusted up or down from the subject, for each attribute considered. A net adjusted appraised value is thus arrived at by summing all the adjustments made to the comparable property. After adjusting each of the comps thus, a median of such adjusted appraised value is calculated. This forms the value a homeowner would argue for.

Say, e.g, if the subject property is 2000 sq.ft. 20 years, 4 bedrooms, 2.5 bath, average quality single family home . Then the comps for this subject should be of the similar age, size, bed/bath & quality single family homes in the same neighborhood at the subject. Also, the closer the comps are to the subject, the better.

Enter your address to find the best comps for your home, in just a few seconds.

Will equity comps help lower my property taxes?

Absolutely! In a booming real estate market, sales comps are hard to find. Equity comps are the last recourse Texas homeowners got! Get your equity comps from us and appeal confidently. In 2022, 80% of the homeowners who used our comps evidence got a reduction on their appraised value. We offer a 100% money back guarantee. Get a reduction with our evidence, or your money back!

What is unequal appraisal in Texas?

Article 8 section 1.b of the Texas constitution states: "All real and tangible personal property...shall be taxed in proportion to its value". County Appraisal Districts (CADs) are tasked with appraising all properties at their market value. County assessors may randomly visit a few properties. But, with hundreds of thousands of properties to appraise, CADs take help of a class of software called - Computer Assisted Mass Appraisal (CAMA) systems. CAMA systems work based on the valuation models and the data points they are provided with. As such, automated property value appraisals can go askew. Unequal appraisal occurs when properties with similar characteristics in a geographic boundary are not appraised uniformly.

What does Texas Property Tax Code say about unequal appraisal?

Texas tax code section 42.26 provides remedy for Unequal Appraisal.

(a) The district court shall grant relief on the ground that a property is appraised unequally if (either of the conditions are met):

(1) the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a reasonable and representative sample of other properties in the appraisal district;

(2) the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a sample of properties in the appraisal district consisting of a reasonable number of other properties similarly situated to, or of the same general kind or character as, the property subject to the appeal; or

(3) the appraised value of the property exceeds the median appraised value of a reasonable number of comparable properties appropriately adjusted.

Further:

If a property owner is entitled to relief under more than one subdivision of Subsection (a), the court shall order the property's appraised value changed to the value that results in the lowest appraised value.

Though the law doesn't state how many is considered "reasonable", generally 5 to 10 comps are considered a reasonable number.

What is equal and uniform appraisal in Texas?

Properties which are of a similar nature and character should be appraised and taxed uniformly and equitably. Section 1.a of the Texas constitution mandates: "Taxation shall be equal and uniform". However, when properties get appraised unequally, this constitutionally guaranteed mandate gets challenged. The remedy for unequal appraisal is set forth in the Texas Property Tax Code - Section 42.26: (a) The district court shall grant relief on the ground that a property is appraised unequally if:

(1) the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a reasonable and representative sample of other properties in the appraisal district;

(2) the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a sample of properties in the appraisal district consisting of a reasonable number of other properties similarly situated to, or of the same general kind or character as, the property subject to the appeal; or

(3) the appraised value of the property exceeds the median appraised value of a reasonable number of comparable properties appropriately adjusted.

Property owners are thus entitled to challenge their appraisal based on "Unequal Appraisal", if they find that they have not been fairly assessed.

What are appraisal comps?

"Appraisal comps", short for "appraisal comparables," are properties that are similar in characteristics (e.g., size, age, quality) located close to the subject property being appraised and used as comparable properties to arrive at a fair appraisal value for the subject. Each comparable property is adjusted to the subject based on the differences in size, age, quality etc. to arrive at a median adjusted appraised value.

How far away can comps be?

In general, comps should be within a mile of the subject property and preferably within the same neighborhood or school district. If there is a major barrier such as a river, train track or freeway, then the comps should preferably be on the same side. In suburban and rural areas, search radius can be extended suitably, say, upto 3-4 miles and upto 5 miles in some cases.

How far back can appraisal comps go?

Generally, appraisal comps are selected within a +/- 10 year range of the subject property and then adjusted to the subject. Closer to the subject, the better.