Every property owner should protest every tax appraisal

Property owners have until May 15 to protest the appraised values of their homes and businesses, and given how poorly the system works, there is little reason not to go for it.

Appraisals are the first step in calculating Texas’ sky-high property tax. Officials from local appraisal districts are supposed to determine the market value of a real estate holding, but they rarely get it right because they don’t have all the necessary information.

“You can appeal the value every year in Texas, so why not?” said Richard Hurt, a senior property tax consultant at Marvin F. Poer and Company with 40 years of experience. “That’s good management.”

Property buyers are not required to disclose how much they paid, and appraisers do not have time to visit every property every year. Therefore, they rely on sales, income and cost data that is analyzed using the Uniform Standards of Professional Appraisal Practice.

Appraisal district officials would like you to believe this is a clear-cut formula, but the process is highly subjective.

“A mass appraisal is designed to cover a broad range, and that’s where the details of the characteristics of the property come into play,” Hurt said. “Unique properties are going to need special attention, and that’s why there is a hearing process.”

A property owner can submit additional information to justify a lower appraisal. Photos of an old kitchen, a bad roof or an estimate for repairs can convince an appraiser to mark down the property value.

Texas law also requires that appraisal districts assign similar values to similar properties based on age, location, size, use and construction type. If the district values your property substantially higher than your neighbors, and your homes or businesses are basically the same, you can demand the lower valuation through an equity appeal.

JW Marriott convinced the Bexar County Appraisal District to knock $36 million off a $270 million appraisal of a luxury resort in 2017. The hotelier sold the property for more than $600 million last year, according to reporting by my colleague Allie Morris.

Property owners, mostly businesses, shaved $44 billion off the tax rolls last year in the state’s five biggest counties: Harris, Bexar, Dallas, Tarrant and Travis, Morris found. Texans saved $1 billion on their public school taxes alone, keeping that money in their pockets instead of paying for education.

Businesses file protests the most, but any property owner can, and probably should fight to lower their appraisals. Hurt says every property owner should start by making sure the appraisal district has an accurate description of the property because oftentimes, simple facts like the amount of air-conditioned space are wrong.

Anyone who has protested a property appraisal on their own knows the grind and futility of fighting the tax man. I’ve spent hours waiting to meet an appraiser, sitting through a rapid-fire monologue loaded with jargon and acronyms to justify why my home is worth more than the house down the street.

These meetings usually end with the appraiser offering a slight reduction to the assigned value with the not-so-veiled threat that attempting to win a more significant concession will involve more bureaucratic torture. Not to mention, the appeals board can raise an appraisal just as easily as lower it.

Big businesses and the wealthy don’t take those kinds of chances; they employ consultants like Hurt who have worked at an appraisal district and know the system inside and out. In many cases, the consulting firm doesn’t get paid unless they lower the client’s tax bill, minimizing the risk to property owners.

For many, filing a protest of the appraisal has become a spring ritual.

Property owners in Harris County filed over 5,000 lawsuits in 2017 making an equity argument, Morris reported last month. Roughly 90percent came from commercial property owners and wiped out more than $5.8 billion from the tax rolls, data from the Harris County Appraisal District shows.

Texas’ growing population is driving up property values and stressing government services. But higher property taxes are driving people to sell their homes and forcing small businesses to shutter. No current proposal before the Texas Legislature would lower taxes, only slow their rise.

The only option is for every property owner in the state to protest their appraised values. Every time a property value is reduced, so is the median value, which allows for more protests.

Once we paralyze the appraisal districts with appeals and lawsuits, perhaps our politicians will bring about real property tax reform.

Tomlinson writes commentary about business, economics and policy. chris.tomlinson@chron.com twitter.com/cltomlinson