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Short answer: No. The appraisal district and the Appraisal Review Board consider each year de novo. (That’s a legal term for “from scratch”.) What happened last year is irrelevant to the appraisal district and to the ARB. Or, in the words of the NBA, “That was then. This is now.” In fact, we protest our clients’ values automatically each year. And if there’s no reduction, there’s no fee. See Why You Should Protest to the Appraisal Review Board Each Year – Regardless
Per The Texas Property Tax Code, Section 23.23, the capped value means your property’s appraised value (taxable value) can only increase by a maximum of 10% compared to last year’s value, with some restrictions.
If the market value of your homesteaded property rises more than ten percent per annum since its most recent appraisal by the Tarrant or Denton Appraisal District, your taxable value increase will be limited to ten percent this year. However, your appraised value will continue to rise until it equals its’ market value.Absent protest, you are just delaying your increased property taxes for a year.And if your most recent appraisal was two years ago your taxable value can rise20% or, if three years ago, then 30%. The protection you get from the TenPercent Capped Value is temporary, the only long term solution to protesting.
What’s the difference between Appraised Value and Market Value?
The Market Value of your home is how much your home would get in the current housing market. Think of this as what a current buyer would be willing to pay for your property.
The Appraised Value is the value that property taxes are determined off. The appraised value is determined by a county appraiser.
Why should I protest my current market value if my taxable appraised value is capped?
Fighting your market value is critical to lowering your property taxes in the future. If you don’t fight each year’s proposed increase in market value because it’s not affecting you currently, your taxable increases could continue indefinitely. As the market value continues to increase each year, there might be no end in sight to your annual property tax increases. But if you protest with us, a Texas-basedProperty Tax Protest Company with decades of experience, you exercise control over your future taxes. That’s why we protest for our clients every year, regardless of the cap. If there’s no reduction there’s no fee. We have our clients covered and save them money long term.
Case Study
Consider a property that has a $150,000 market value in 2019. Over the course of the past year, the neighborhood saw major appreciation in home & land values. In2018, that same property was taxed on an appraised value of $120,000. The TenPercent Capped Value means that in 2019, the taxable value of the property would be $132,000, $18,000 less than the current market value. This is good for the first year of property tax filings, however, in the coming years with continued market growth, the tax value will increase 10% year over year.Protesting the market value of this property in 2019 to reduce it down to$135,000 would result in only a 1% increase in taxable value in 2020.
Gentrification and the Capped Value
Gentrification can be a mixed blessing to homeowners. It occurs when properties that had been over looked during previous development activities become attractive to developers.
Tarrant Appraisal District and Denton Appraisal District can raise land values significantly due to gentrification. It may be profitable if you can sell and replicate – or even improve — your living conditions elsewhere. But what if you can’t move because of age, proximity to your work or family, or simply the inability to sell for enough to support the move? You are stuck with higher taxes!
The ten percent cap on taxable value increases for homesteaded properties only defers the moment when you can no longer afford to stay in your home, especially if you’re on a fixed income or a salary that doesn’t keep up with the inflation in your taxes. If you’re over 65 you can defer taxes, but the unpaid amounts accrue interest at 8% per annum. The tax lien can’t be foreclosed during your lifetime, but it does reduce the equity available to your heirs.
We’ve represented homeowners in precisely this situation, and we appreciate how important the protest is to those who are most vulnerable. In fact, for clients over 65 our fee is automatically reduced from 1% of their reduction to 0.75% and, of course, if there’s no reduction there’s no fee. Where owners over 65 defer their taxes we’ll even waive the fee entirely – we’ll work pro bono. So, if you have the Over 65 exemption and are deferring your taxes, just let us know. We’re here to help.
Will the appraisal district raise your property value next year, after a successful protest?
The short answer, probably not and if they do, we have strong support to set aside the increase.
While there are no guarantees, the Denton and Tarrant appraisal districts are held to a higher standard in the year following a successful protest. This makes a subsequent increase in property value unlikely and if it does occur gives us as your agent extra ammunition to support a reduction.
Effective January 1, 2020, the Texas Legislature strengthened your protection by enacting the following provision:
“…if the appraised value of a property is lowered (as a result of a protest) in the next tax year in which the property is appraised the chief appraiser may not increase the appraised value of the property unless the increase by the chief appraiser is reasonably supported by clear and convincing evidence when all of the reliable and probative evidence in the record is considered as a whole.” (Texas Property Tax Code. Sec. 23.01)
Our intuition is that the district is less likely to initiate a value increase when you have a knowledgeable agent ready to protest on your behalf. We can’t prove it and the district may deny it but that’s our intuition based on years of experience.
The Tarrant or Denton appraisal district may claim it has “clear and convincing evidence.” In order to increase your property value in the year following a successful protest, the district would have to reappraise your property, which is less likely if that was their justification for an increased taxable value the year prior. Our knowledge and experience can help you prevent an increase the following year, and potentially even obtain a further decrease in the market value of your property. That’s why we protest your value every year.
In all likelihood, your tax savings will last longer than one year. This results in additional savings for you long term, as our fee is based only on the first year reduction. Subsequent years’ savings are all yours.
First, protest every year. Only 10% of Texas homeowners protest to lower their property taxes. Don’t be one of the 90% who over pay. Here are some easy ways to make sure you’re paying only your fair share, not more.
Per The Texas Property Tax Code, Section 23.23, the capped value means your property’s appraised value (taxable value) can only increase by a maximum of 10% compared to last year’s value, with some restrictions.
If the market value of your homesteaded property rises more than ten percent per annum since its most recent appraisal by the Tarrant or Denton Appraisal District, your taxable value increase will be limited to ten percent this year. However, your appraised value will continue to rise until it equals its’ market value. Absent protest, you are just delaying your increased property taxes for a year. And if your most recent appraisal was two years ago your taxable value can rise 20% or, if three years ago, then 30%. The protection you get from the Ten Percent Capped Value is temporary, the only long term solution to protesting.
The Market Value of your home is how much your home would get in the current housing market. Think of this as what a current buyer would be willing to pay for your property.
The Appraised Value is the value that property taxes are determined off. The appraised value is determined by a county appraiser.
You can learn more about the differences between market and appraised values here.
Fighting your market value is critical to lowering your property taxes in the future. If you don’t fight each year’s proposed increase in market value because it’s not affecting you currently, your taxable increases could continue indefinitely. As the market value continues to increase each year, there might be no end in sight to your annual property tax increases. But if you protest with us, a Texas-based Property Tax Protest Company with decades of experience, you exercise control over your future taxes. That’s why we protest for our clients every year, regardless of the cap. If there’s no reduction there’s no fee. We have our clients covered and save them money long term.
Consider a property that has a $150,000 market value in 2019. Over the course of the past year, the neighborhood saw major appreciation in home & land values. In 2018, that same property was taxed on an appraised value of $120,000. The Ten Percent Capped Value means that in 2019, the taxable value of the property would be $132,000, $18,000 less than the current market value. This is good for the first year of property tax filings, however, in the coming years with continued market growth, the tax value will increase 10% year over year. Protesting the market value of this property in 2019 to reduce it down to $135,000 would result in only a 1% increase in taxable value in 2020.
Gentrification can be a mixed blessing to homeowners. It occurs when properties that had been overlooked during previous development activities become attractive to developers.
Tarrant Appraisal District and Denton Appraisal District can raise land values significantly due to gentrification. It may be profitable if you can sell and replicate – or even improve — your living conditions elsewhere. But what if you can’t move because of age, proximity to your work or family, or simply the inability to sell for enough to support the move? You are stuck with higher taxes!
The ten percent cap on taxable value increases for homesteaded properties only defers the moment when you can no longer afford to stay in your home, especially if you’re on a fixed income or a salary that doesn’t keep up with the inflation in your taxes. If you’re over 65 you can defer taxes, but the unpaid amounts accrue interest at 8% per annum. The tax lien can’t be foreclosed during your lifetime, but it does reduce the equity available to your heirs.
Property Tax Protest is your one stop shop for all the legal advice and direction you need to cap your Texas property taxes and also protest your market value to ensure you are paying your fair share of Texas Taxes. We’ve represented homeowners in precisely this situation, and we appreciate how important the protest is to those who are most vulnerable.
The appraisal district uses a mass appraisal technique to classify your property and assign a market value based on a class of like properties. This allows the appraisal district to classify thousands of properties without looking at specific factors related to each residence and it provides us grounds to protest that value by showing how your property differs.
Mass appraisal uses recent property sales, among other factors, to classify and quantify the value a class of properties should have based on size, type of use, and other market factors. It doesn’t take into account the unique factors that affect your particular property.
How do you calculate what a property is worth? With unique factors influencing the market value of any single property, there is no one size fits all approach to your property value. Despite the appraisal districts current use of mass appraisal to determine your property’s market, and subsequent taxable value, there are individual factors that make your property unique. These unique characteristics differentiate your property and provide support for a lower market value.
What if I am planning to sell soon? Would a lower market value hurt my sale price?
Even if you are planning to sell your property, it is always a good idea to protest your property tax value for two reasons
Also, if you’re about to sell let us know and we’ll pro rate our fee accordingly.
We recently purchased a new home and the taxes are higher than the previous owner. Why?
New homebuyers can be surprised with unexpected tax values due to the purchase price being disclosed to the appraisal district, a lack of homestead exemption, or other reasons.
The previous owner’s taxable value may have been limited by the ten percent homestead capped value. That doesn’t apply to the new buyer.
When you purchase through MLS the purchase price becomes known to the appraisal district unless you specify to the agent that the price not be disclosed. Where it’s disclosed the district will typically raise market value to what you paid. Where it’s not disclosed the district may raise market above what you paid and wait for you to protest.
In either case there are remedies available to you of which you may be unaware. Was it a purchase under duress? For instance, did you need title before school started so you could register your child? Were there considerations other than the real estate? For example, did part of the purchase price go to personal property? These are among the arguments that might be made in support of a taxable value below your recent cost. There are others.
We have been successful in these protests before and can apply our experience so that you pay only your fair share of taxes, not more. And, of course, if there’s no reduction there’s no fee but you will know that we are on your case year after year without your having to be concerned about future increases or being overtaxed on your home. We’ll continue to monitor your value each year until you tell us not to.
A common misconception in the housing market is the differences between appraised, assessed and market values of a residential property. Homeowners should be familiar with these home values as they have a major impact on the amount of Texas property taxes one is responsible for on their home.
It is important to understand the differences between an appraised value, assessed value, and market value.
The appraised value of a home is the value an appraiser determines is the fair market value of the home, taking into account the current condition and market among other factors. In the context of property taxes, the appraisal district uses a method of mass appraisal to determine what a certain property is worth. Since the appraisal district doesn’t have time to visit each individual property, it identifies properties with similar characteristics and assigns them what they deem to be a fair appraisal value.
The market value of a home is the fair price of a home-based on its current market conditions. It is what the property would sell for between a buyer and seller under no duress to purchase or sell. This value is determined by seeing what comparable homes have recently sold for within an area similar to where the home is located.
According to the Texas State Comptroller Market value is the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
Also referred to as the “Capped Value”, the tax assessed value of a home is the lower value resulting from exemptions or limitations on taxable value increases for homestead properties that are unique to an appraisal district. The assessed value is the value your taxes are calculated off of. You can find the assessed value of a property through your county website.
Your home’s assessed value may not be its fair market value. Instead, it comes from the local tax collector’s office that takes in all mitigating factors on a property’s taxable value. The assessed value is used to determine the property tax that is assigned to a particular home.
When it comes to property tax evaluation, the assessed value of your property is the gold standard for how your property taxes are calculated. While the market value of your property factors into the amount of taxes you will pay on your annual tax bill, the final assessed value is the only value that ultimately matters. In our experience, fighting for a reduction in your market value will strongly correlate to a reduction in your assessed value in the current tax year. If your assessed value is already significantly lower than your current market value, a reduction in market value will help prevent substantial increases in your taxes in future years with little impact in the current taxing year.
Want to learn more about how your property’s appraised, assessed, and fair market value will affect your property taxes? You can view our list of commonly asked questions here to cover additional topics.
The Denton Central Appraisal District is responsible for appraising all real and personal property throughout Denton County on behalf of the taxing units that impose property taxes in the county. The taxing authorities use the appraisal district’s valuations to establish tax rates sufficient to fund their operations. The appraisal district handles matters concerning property values, protests, and exemptions; it does not establish tax rates or the amounts that will be levied against your property.
The mission of the Denton Central Appraisal District is to appraise property for taxation at 100% of fair market value and to adjudicate taxpayers’ requests for exemptions which reduce their tax burdens. In 2019 the Denton County CAD was responsible for $126 billion in valuations.
Homestead is the most common exemption sought by property owners in Denton County; it accounted for $58 billion (46%) of the 2019 total. The most significant benefit of the homestead exemption is that it limits the amount by which the appraisal district may increase a property’s market value to 10% per annum since the most recent appraisal. Thus, the homestead exemption helps the homeowner avoid large tax increases in a rising market. Note however that the value of capital improvements such as a new kitchen or an expansion is not subject to the homestead cap and the increase can be more than 10% if the most recent appraisal was more than one year ago. The homestead exemption also qualifies the property as exempt from creditors other than recorded mortgagees. This is a modern day interpretation of the Texas Constitution which exempted from creditors’ claims the debtor’s “horse and home.”
To qualify for the homestead exemption the taxpayer must occupy the property as of January 1 of the current and any subsequent years. Many appraisal districts compare the taxpayer’s mail address of record with the property address; if they differ the district may require evidence of occupancy to support the exemption.
The appraisal district values its properties through Mass Appraisal techniques which evaluate properties in large batches rather than individually. Mass appraisal is an opinion and estimate of value based upon the integrity and competence of the appraiser using systematic and logical analysis of data available. Thus, the right of the individual owner to protest each property’s value separately is essential to “fair and equal taxation” as mandated by the Texas Constitution.
If mass appraisal is used the Texas Property Tax Code (Section 23.01) requires that appraisal districts comply with the Uniform Standards of Professional Appraisal Practice (USPAP) and that individual characteristics that affect a property’s market value must be evaluated in determining the property’s market value. This latter requirement is the basis for an individual taxpayer’s protest, namely that individual characteristics of the property were not sufficiently considered. It is a powerful argument for a reduction if the owner can demonstrate such characteristics. They may include Condition, Age, Effective Age, Neighborhood, Obsolescence (both economic and functional) and other factors, all of which are considered by Property Tax Protest when preparing it client’s case for presentation to the Appraisal Review Board.
By contrast Fee appraisal is defined as an appraisal of properties one at a time for pay. The Appraisal Review Board will defer to an owner who offers a recent fee appraisal of the property valued lower than the district’s proposed or Notice Value. Similarly, it will accept a recent sale at a lower value if the owner submits a Settlement Statement. However, if the recent sale was at a value higher than proposed by the district the Appraisal Review Board will likely request the Settlement Statements and if none is delivered it will likely sustain the district’s proposed value. The district will also likely note the owner’s refusal and consider it when valuing the property in the subsequent year.
In 2020 Denton County’s housing market values increased marginally over the previous year. Thus, homeowners would be well advised to seek professional assistance before filing a protest.
● April 1: Denton County CAD publishes current year valuations on its website and notifies owners whose property value it proposes to increase from the prior year. Owners whose values are proposed to increase also receive a mailed notice. Owners whose value is not increased may receive no mailed notice; however, the unchanged valuation will be apparent on the appraisal district’s website.
● April 30th : Homeowners’ protests of their Notice Value are due by this date or by thirty days after receipt of their mailed notice, whichever occurs later.
○ Protests must be made in writing. Owners can use the protest form available on the appraisal district’s website or they can mail their protest in letter form.
○ Protests can be made based on Value Above Market (comparable sales) or Inequality of Appraisal (comparable assessments). A successful protest under Inequality of Appraisal will result in a value below market.
● July 25th : The chief appraiser must complete the valuation process for at least 95% of the values in the district and will submit a certified roll of values for all properties to the taxing units along with approved exemptions.
● September 30th: By this date each taxing jurisdiction will have set a tax rate which, when applied to the aggregate values established by the appraisal district, will fund that jurisdiction’s budget for the coming year. The tax rate set by the taxing jurisdiction will establish the amount of tax levied against your property.
● October: The Denton County tax assessor sends out tax bills.
Payment of taxes is due by January 31 of the following year. However, many owners pay by December 31 to obtain a deduction on their current year federal income taxes. Failure to pay property taxes when due will result in substantial penalties (starting February 1 at 15% of the amount due) and interest which will continue to accrue until full payment is made. There is usually no compromise available to delinquent taxpayers. Taxes due constitute a lien against your property and can, in rare instances, lead to foreclosure and loss of ownership.
If you have the Over 65 exemption or theDisabled exemption, then you may pay one quarter of your total tax by January 31 and one quarter each on March 31st, May 31st and July31st without charge for interest or penalties.
If you have the Over 65 exemption you may also defer payment of property taxes entirely until the property changes ownership. However, deferred taxes accrue interest at 8% per annum. To avoid cumulative charges against the property it is advisable to protest unreasonable current year value increases since a successful protest will reduce the amount ultimately due when the property changes ownership.
There are two separate values attributable to your property by the Denton Central Appraisal District.
· Market Value is the value at which the property would sell between a buyer and a seller both knowledgeable about the property and its market and under no duress to purchase or sell. The market value is the only value you are entitled to protest to the Denton Appraisal Review Board. In most cases a reduction in your Market Value will result in a reduction in your taxable value.
· Assessed Value (“Capped” Value) is the lower value resulting from various other factors unique to the appraisal district such as exemptions or limitations on taxable value increases for homesteaded properties. Your taxes will be calculated based on Assessed Value. Assessed Value is derived from Market Value.
Comparable sales are the gold standard when arguing your case for Value Over Market before the Denton Appraisal Review Board. Any comparable sales are better than none but a Comparative Market Analysis (CMA) from Multiple Listing Service (MLS) usually won’t get you the value you deserve because the criteria that the appraisal district and the Appraisal Review Board use include many that are not recognized by MLS; these include Neighborhood as defined by the appraisal district, Class, Effective Age and Condition. So, while your Realtor may be willing to assist you with sales comparables or other evidence, that will rarely be enough to prevail at the ARB.
While appraisals are performed by the Central Appraisal District (CAD), tax rates are set individually by the following bodies:
Protesting your taxes is the most direct way to resolve any disputes or disagreements that you have with the valuation of your property in Denton County. Your right to protest is enshrined in the Texas Constitution. It is the modern-day equivalent of the argument, “No taxation without representation” which motivated the thirteen colonies to revolt against English rule.
You can begin the protest process when you receive your Notice of Appraised Value in April. If you do not protest while others do and they obtain reductions in their property taxes one result is that you will pay more to make up for their savings. The tax rate set by the taxing jurisdictions will need to increase to offset the aggregate reductions granted to successful protesters.
The protest process is complex. Many homeowners neglect to use all the relevant grounds for appeal to the Appraisal Review Board. For homeowners these include not only Value Above Market (comparable sales) but also Inequality of Appraisal (comparable assessments), sometimes referred to as the Equity argument.
The Texas Supreme Court has ruled that Inequality trumps Value Above Market; Inequality is determined after Value Above Market is determined. This means that Inequality can result in a further reduction below market. In fact, every successful Inequality argument will result, by definition, in a value below market. Therefore, regardless of whether you believe your homesteaded property is fairly valued by comparable sales you should protest under Inequality incase you are unequally assessed in relation to other properties of similar kind or character.
Property Tax Protest will take care of the entire protest process by doing the following:
● File a protest with the Denton County Appraisal District using all the grounds for appeal available to you.
● Present arguments for your fair market value to the appraisal district and, as necessary, to the Denton Appraisal Review Board.
● Present arguments for Inequality of Appraisal as it applies to your property. The Inequality argument is complex; many consultants don’t know how to present it effectively.
● Make sure you pay only your fair share of property taxes, not more.
● Continue the process automatically each year until you cancel the service so that you know you are protected against unreasonable increases in your property taxes. It’s like an insurance policy with no advance premium.
● Charge you only One Percent (1%)of the reduction obtained in your market value; if there’s no reduction there’s no fee.
If you are not satisfied with the result of the Appraisal Review Board hearing you have further options with which Property Tax Protest can assist you. You can:
● Request binding arbitration (an arbitration that appeals the Appraisal Review Board’s decision). Binding arbitration requires a deposit (up to $500 for most homeowners) which is returned to the owner if the arbitrator awards a market value closer to the owner’s request than to the Board’s value.
● Property Tax Protest will share the risk of binding arbitration with you. If the arbitrator’s award results in less savings than your deposit, Property Tax Protest will pay you half difference. Clearly, Property Tax Protest will not take a binding arbitration case unless it believes you can win.
● Filing a judicial appeal. This is usually not cost effective for homeowners.
Let Property Tax Protest Handle Your Protest. Pay Only Your Fair Share, Not More. You can count on Property Tax Protest to get you the market value you deserve.
Ready to save money? You can get started here.
Harris County Appraisal District (HCAD) is the largest appraisal district in Texas, encompassing the Houston metropolitan area. It’s responsible for accurately valuing $627 billion in Harris County home property valuations; by comparison, Dallas is second with $350 billion (data from Texas State Comptroller 2019 County Report of Property Values). HCAD‘s residential property values are the starting point for the taxes levied by the various taxing jurisdictions in Harris County; however HCAD does not set your tax rate. The values set by HCAD impact the taxable value of your property. A lower value means lower taxes for you.
You can find out your most recent property value for Harris County by visiting the Appraisal District Site here and entering your property information.
HCAD is responsible for the largest population and property coverage in Texas. With Harris county being the third largest in the country, encompassing the Houston Metropolitan area (covering Houston, The Woodlands, and Sugar Land), it is responsible for a wide range of taxing jurisdiction.
You can learn more, as well as find a list of current tax jurisdictions covered by Harris County CAD here.
How does HCAD accomplish its job and how do its methods affect you, the homeowner?
HCAD is required to appraise only one third of its properties each year. Thus, your property’s appraisal may remain unchanged from year to year. If your property is not reappraised, the district is not obligated to send you a Value Notice. Regardless of your appraisal status, Property Tax Protest highly recommends you protesting your property value every year. Protesting is the only way to determine if your property value is appropriately justified by Harris County.
Tax protest is the most direct way to resolve any disputes or disagreements that you have with the valuation of your property in Harris County. Your right to protest property taxes in Texas is enshrined in the Texas Constitution. Its roots hearken back to “No taxation without representation” which motivated the thirteen colonies to revolt against English rule.
It is important that you protest your property value every year. If you do not protest while others do and they obtain reductions one result is that you will pay more to make up for their property tax savings. The tax rate set by the taxing jurisdictions will need to increase to offset the aggregate reductions granted to successful protesters.
The protest process is complex. Many owners neglect to use all the relevant grounds for appeal to the Appraisal Review Board. For homeowners these include both Value Above Market (comparable sales) and also Inequality of Assessment (comparable assessments).
You can find more information here on the types of protests you are entitled to, as well as a detailed account of the different types of property values and terms you will encounter during the protest process.
To evaluate at least one third of $627 billion in property values each year HCAD uses Mass Appraisal techniques which evaluate properties in large batches rather than individually. In any one year, Harris County is responsible for appraising over $200 billion in property values. Mass appraisal is only an estimate of value using systems and logical analysis of data, not separate appraisals.
But the Texas Property Tax Code requires individual characteristics that affect a property’s market value also be evaluated in determining that property’s market value (Section 23.01). Thus, the basis for a taxpayer’s protest is that individual characteristics of the property were not sufficiently considered when HCAD used mass appraisal techniques. That is the heart of your argument. To win a property tax reduction at the Appraisal Review Board an owner or agent must be able to demonstrate how those characteristics differentiate the property from the mass.
You know your property better than the appraisal district does. Property Tax Protest believes you should use that expertise to differentiate your property from the other properties in the county used by HCAD to support their value for your property.
Harris Central Appraisal District also adjudicates taxpayers’ requests for exemptions which reduce their tax burdens.
Paying your property taxes on time is important to prevent interest or penalties. The exemptions on file can cause slight deviation from the deadline, so it is important for the homeowner to understand the specific due dates on the property.
No, in fact there are positive implications that will prolong the life of any reduction you obtain. The Texas Property Tax Code specifies that “In the next tax year in which the property is appraised (following a successful protest), the chief appraiser may not increase the appraised value of the property unless the increase by the chief appraiser is reasonably supported by clear and convincing evidence. . . . The burden of proof is on the chief appraiser to support an increase…” Texas Property Tax Code, Section 23.01(e).
Property Tax Protest will take care of the entire protest process by doing the following:
If you are not satisfied with the result of the Appraisal Review Board hearing you have further options with which Property Tax Protest can assist you. You can:
