Ever since Tarrant Appraisal District implemented a new computer system in October 2014, problems have plagued the district, its taxpayers like you and its assessor/collectors who have lost money big time. Here’s a short history and what you can do to protect yourself.
TAD implemented the new system for calendar 2015 and left hundreds of millions of dollars of property values off the books or undervalued. The result was millions of dollars irrevocably lost revenues for the taxing authorities and a bonus for some owners who were either overlooked or under assessed. In an attempt to make up for lost valuations and revenues TAD then greatly increased valuations in 2016, resulting in more than 100,000 taxpayer protests — almost double the average number received in prior years. Many residential proposed value increases exceeded the 10% statutory limit on taxable (or assessed) value increases so the taxing authorities couldn’t catch up with TAD’s 2015 error. It will take some years for that to happen.
TAD was also late in sending correct data to the tax assessor/collector’s office resulting in some owners not receiving their statements in time to pay before the end of 2016. See http://www.star-telegram.com/news/local/article115891053.html
What can you do to protect your taxable value?
First, if you are a homesteaded property owner and your taxable (or assessed) value is significantly below your market value you’ll pay taxes on the lower value which should ease the pain but not forever. Should you ignore protesting for that year? No, because you may never have as good an opportunity to reduce your market value as you have when it jumps more than ten percent from the prior year. The lower assessed value increases 10% each year until it equals then market value. Protesting now to reduce your market value — even if it doesn’t go below your taxable value this year — produces savings in future years when the limitation runs out. And since future increases are typically a percentage applied to the prior year’s market value (TAD will deny this) those savings continue for many years to come.
Second, protest Inequality of Appraisal as well as Value Over Market. Most taxpayers don’t fully appreciate the Inequality argument. In a market where large numbers of properties are under assessed the Inequality argument has particular relevance.
Inequality is a complex argument but in essence it says if a reasonable sample of properties “similarly situated or of the same general kind or character” to yours is appraised at a median 90% of market, then your property is entitled to a 10% reduction. Inequality applies even if your assessment is already below what comparable sales will support or even below what you recently paid for the property. Since the reduction is a percentage, this applies especially to the higher value properties.
Inequality of Appraisal requires a sophisticated analysis and argument; comparable sales alone won’t suffice and a CMA from MLS won’t come close. Property Tax Protest has years of experience with Inequality; it’s yours free when you hire us.
For more about Inequality of Appraisal see