Appealing property taxes for owners of apartments

Property taxes are a major departure costs incurred by the apartments. However, many homeowners do not appeal effectively. Although the owners realize that property taxes can be managed and reduced through an appeal, some view taxes as an arbitrary estimate provided by the government that can not effectively be appealed. It tends to be reduced to the old adage, "You can not fight City Hall."

Fortunately, the property tax appeals process in Texas provides owners multiple opportunities for appeal. Handled directly by the owner or by a consultant from property taxes, this process should involve an intense effort to appeal to the year and minimize property taxes. Reducing the largest online spending item has a significant effect in reducing general operating expenses of the owner. While it is not possible to completely escape the burden of paying property taxes, it is possible to drastically reduce taxes, often by 25% to 50%.

Why are some owners do not appeal

Some owners not to appeal because they do not understand the process, or do not understand there's a good chance of achieving significant reductions in property taxes. Some owners believe that since the market value of your property exceeds the set value, then it is possible to appeal and reduce property taxes. Despite appeals on unequal appraisal are relatively new, there is a clear form of property tax appeals at the administrative hearing based on unequal appraisal. Unequal appraisal occurs when the property is evaluated in a manner inconsistent with neighboring properties or comparable properties. In addition, some owners are reluctant to hire a consultant to the property tax, although many consultants who work on a contingent fee basis, where there is no cost to the owner unless the property taxes for the current year is reduced.

Overview of the appeal process

The following are the main steps in the annual appeal of property taxes:

· Request notification of accessed value

· File Appeal

· Prepare for the hearing

. Review records

. Market Review attractive value

. Review of unequal appraisal appeals

• Establish the perimeters of negotiation

· The administrative hearings

· Decide whether binding arbitration or judicial remedies are guaranteed

· Paying taxes on time

Request notification of assessed value

Owners have the option to request a notice of appraised value of your property each year. 25.19g section of the Tax Code Texas Property offers the owner the option of requesting a written notice of the appraised value of the chief appraiser. Owners benefit from requesting and receiving written notification of the assessed value of each property, as it ensures they have the opportunity to review the appraisal value. This notification shall be sent annually. The appraisal district does not have to send a notice of appraised value if the value increases by less than $ 1,000. However, if an owner was not satisfied with the value of a previous year and the value remains the same, the appraisal district is not likely to send a notification of the assessed value of the current year. In this situation, the owner can forget to protest and notice of the appraised value of the property has not been received.

How to file and appeal

On or before May 31 of each year, the landlord must file an appeal to each property. However, while many owners feel comfortable with an estimated value, in many cases there is a basis for appeal. Two options for appeal are:

1. unequal appraisal, and

2. market value based on data from the appraisal district provides the landlord before the hearing.

You can appeal to complete the protest form provided by the appraisal district and indicating both excessive value (market value) and unequal appraisal basis for the appeal. In addition, the owner may send a notice that identifies the property, and indicates dissatisfaction with some determination of the valuation office. The notice does not have to be on an official form, but the Comptroller not provide a way for the convenience of the owners.

Bill 201 - Useful Information

Bill 201 is the industry jargon for the choice of an owner to request information from the appraisal district to use at the hearing, and receive a copy of 14 days before the hearing. The House bill 201 name comes from the account used to enact the law. The details of Bill 201 are in sections and 41.67d 41,461 Tax Code Texas Property. By filing a protest, the property owner also must request in writing that the appraisal district provide a copy of any information the appraisal district plans to introduce at the hearing. The appraisal district will require the landlord to get to the appraisal district office to collect the information and charge a nominal fee, usually $ 0.10 per page. While the cost for Bill 201 requests are very low (between $ 0.50 to $ 2.00 per property for residential and commercial) information is invaluable in the preparation of the hearing. Furthermore, the presentation of House Bill 201 request is important because it limits the information the appraisal district can present at the hearing as provided to the owner two weeks before the hearing.

Preparing for the Hearing

Start by reviewing the information the appraisal district for your property for accuracy. If the appraisal district overstates either the quality or the amount of improvements that justify a deduction. The next step is to review the information on market value and unequal appraisal provided by the appraisal district House Bill 201 in the packages. If the property in question is a rental property, review the appraisal district analysis of revenue compared to actual income and expenditure statements. Consider the following areas as opportunities to refute the analysis of the assessment district:

· Income potential gross

· Vacancy

· Total of effective gross income, including other income

• The operating costs

· Amount of reserve replacement

· Revenue of exploitation

· Capitalization Rate

· Value of final market

Many owners and consultants begin with the actual income and expenditure data and the use of one or two of the cases provided by the appraisal district. However, especially to use the information from the actual income and expenses in the preparation of their own income and estimation analysis of the market value of the property in question.

When comparable sales are the main subject in the determination of market value, start by reviewing the comparable sales data provided by the appraisal district compared to the appraised value of your property. Convert the sale prices of appraisal district either one foot per square meter or per unit. Then, compare sales per square foot or per unit for assessment of his property. Sales may be useful during the hearing.

The cost approach is not normally used at the hearings on property taxes except for new or relatively new properties. If your property is new, the appraisal district will probably want to review the cost information and you may not want to show it to them. In many cases, the actual cost of a property is higher than the estimate provided by the appraisal district. If this is the case, you might want to appeal unequal appraisal instead of market value. No matter how good your argument or how passionately expressed, staff appraisal district and appraisal review board members (ARB) tend to believe that the cost is equal to the value of new properties.

Deferred maintenance and functional obsolescence

Another issue that is important to appeal market value, and to some extent an unequal appraisal appeal is information on deferred maintenance and functional obsolescence. Deferred maintenance could include elements such as:

· Wood rot

· Painting peeling

· Replacement of the roof

• The substantial repair

· Upgrade of landscaping and other similar items

Most appraisal districts to consider requests for minimal adjustments on the basis of deferred maintenance, unless the landlord offers the repair costs of independent contractors. There are some exceptions in which an appraiser or ARB informal cooperation supporters of an owner are estimated deferred maintenance and make adjustments based on costs. Most reviewers and ARB members are much more likely to make adjustments to provide third party cost estimates. In addition, appraisers and many members of ARB are inclined to deduct only a portion of the total cost with the argument, "we've been giving a subsidy reserve replacement of this element in recent years and would be double dipping to deduct all the value of it in the current year. "While this argument is incorrect assessment, which tends to be the practice in many appraisal districts. The reality is that the cost of curing deferred maintenance is deducted from the offer of a potential buyer.

Examples of functional obsolescence would be a unit three-bedroom apartment that has only one bathroom, or a two bedroom apartment with no washer / dryer connections in an area where connections are common. Another example could be an apartment that has a window air conditioner in an area in central HVAC is typical and expected.

Unequal appraisal analysis

The Texas Property Tax Code Section 41.43 (b) (3), provides attractive evaluate or unequal valuation studies and the relationship of "a reasonable number of comparable properties appropriately adjusted." Virtually all unequal appraisal appeals involving a reasonable number of comparables that are properly adjusted. Comparables are properties like.

This is mainly because of the difficulty and expense of conducting a study of relationship. Historically, the position of many appraisal districts was that the landlord needed to obtain an assessment of cost for each comparable property and compare the market value estimated by the appraiser estimated value. The cost of obtaining multiple assessments made this process economically unfeasible. Compiling a reasonable number of comparables appropriately adjusted is simple and straightforward. The first step is to choose a reasonable number of comparables. Usually, four to five comparable is the typical number used in a hearing to property tax, but in some cases, homeowners choose ten to thirty years. In some cases, can only be from one to four comparable properties that deserve consideration. Presentations are most unequal assessment three to ten comparable. The number of comparables reasonable depends on the location, type, size and age of the property. For example, would be less than five years old, bowling alleys in the northern part of Harris County compared to the complex of apartments of recent construction.

After selecting a reasonable number of comparables, the matrix in table format, including the fields of data such as account number, net rentable area, year built, address, assessed value and assessed value per meter square.

The next step is to determine whether or not to make appropriate adjustments. For the administrative hearing, if you have truly comparable properties, most of the plates (appraisal review board or ARA-II) will not be affected by not making adjustments. If adjustments are made, these are usually based on factors such as differences in the size and age compared to the subject property.

You should also check the information in the appraisal district House Bill 201 of the packets in an unequal appraisal. In many cases, the evaluation analysis of unequal appraisal districts document a reduction in its appraised value! If appraisal districts unequal appraisal analysis documents a reduction in either the informal appraiser or ARB should make the adjustment in the appraised value for you. Having the opportunity to obtain a reduced assessed value automatically based on the analysis of appraisal districts unequal appraisal is one reason to bring all properties each year.

Complete the preparation Hearing

After reviewing the information the appraisal district of your property, the House Bill 201 packages, and their market value and analysis of inequality of assessment, determine the strengths and weaknesses of each method and decide the appeal based on what provides the best opportunity for a significant reduction. Despite appeals on unequal appraisal are clearly the law of the land since 2003, some appraisal districts and review boards have chosen to ignore the unequal valuation option raised by the Texas Legislature. Although it is carrying out a case that should resolve this issue in the next year, would be wise to visit someone who is knowledgeable in local property tax appeals to determine if the county appraisal district and ARB in your area being considered unequal appraisal appeals.

Establish perimeters Trading

After reviewing the information, it is important to establish the highest level of assessed value will be accepted at the informal hearing, because after accepting a certain value, the appeal process is completed for the year and you will not be able to appeal.

Administrative Hearing Process

The two steps to the administrative hearing process are sight and hearing informal appraisal review board.

The informal hearing

The following procedure and the rules are typical of the informal hearing:

· Meet an appraiser who represents the appraisal district. You must be educated and trained in this meeting. While many homeowners are frustrated and angry with the high property taxes, the appraisal district appraiser has no control over the tax rate set by different entities, or the policy of property taxes in the area or state. The appraisal district appraiser is trying to do your job professionally and appreciate it when owners work with him on that basis.

· Provide information and property appraiser will review the information and the information available.

• The evaluator is likely to make an offer to resolve the appraised property value rather quickly. You can accept the value or continue negotiating. Either way, you should know within ten to twenty minutes if the appraiser will provide an acceptable value. If the value is acceptable, the conclusion of the negotiation, to accept the value of the current year. If the value offered is not acceptable, ask to proceed with an ARB hearing.

Hearing Assessment Review Board (ARB)

The ARB hearing panel consists of three impartial citizens selected and paid by the appraisal district. The age of most members of the ARB ranges fifty to eighty. There is an unfortunate bias in the system as ARB members are selected and paid by the appraisal district, but most ARB members are reasonable people who want to take the right decisions.

Like the appraisal district appraiser, ARB does not set tax rates or fiscal policy. Members are not responsible for the effectiveness of local government. Is unlikely to help your case if you complain of ARB members either on the high level of property taxes or the poor quality of some aspects of local government.

The ARB expects you to do your presentation in about three to ten minutes. They usually will wait patiently to make your presentation and may have questions after the conclusion. An appraisal district appraiser, who may or may not be the same person who attended the informal hearing will represent the appraisal district in the ARB hearing. The appraiser comments on the evidence presented and often have other information the appraisal district has at its disposal. If you requested a House Bill 201 package of your property, substantially limits the evidence the appraisal district appraiser can provide an audience. ARB members may have questions after the presentation of the appraisers. Then the property owner will be given a final opportunity to rebut evidence presented by the rapid appraisal district appraiser and summarize the evidence. ARB members strongly prefer not to repeat the entire presentation at this time.

After hearing the evidence, the ARB members are vested and make a decision. This decision is not subject to negotiation and not review the decision of whether further evidence is presented. When this decision was announced, the audience is more effective. The ARB will send you a letter from two to four weeks after a summary of its decision and notify the owner of a limitation of 45 days from the date of receipt of the request ARB decision binding arbitration or judicial appeal .

Binding arbitration or judicial appeal

From September 2005, the owners of properties with an estimated value of $ 1 million or less, may submit a request for binding arbitration. The owner must submit to the appraisal district not later than 45 days after receipt of notification of the decision of the ARB. The option of binding arbitration is interesting because it includes a loser pays provision. The appraisal district pays the fees of the arbitrator, if the final value is closer to the owner's opinion of value, and the landlord pays for compulsory arbitration if the final decision is closer to the appraisal district's opinion of value. Binding arbitration was approved to provide an alternative to judicial remedies, which can be expensive to process.

Many owners pursue appeals court to further reduce property taxes. In 2005, O'Connor & Associates filed more than 1,200 legal remedies on behalf of the owners in the state of Texas. Judicial remedies can be costly if the landlord and the lawyer does not understand the process and have a plan to minimize the cost of witness fees and legal experts. Remedies are usually successful. However, success requires the cooperation of the owner of the property, such as providing answers to questions, documents and a deposition if requested. The legal remedy is significant as an option to minimize estate taxes by reducing the base value. This is important because the appraisal district and ARB into account the baseline in the following year to set the administrative hearing.


Owners can generate a substantial reduction in appealing property taxes annually. Consider appeal in the market value and unequal appraisal and obtain the House Bill 201 information to prepare for the appeal hearing. Homeowners should consider the three levels of appeal: an informal hearing, the ARB hearing and judicial appeal / binding arbitration. While the ARB hearing and judicial appeal / binding arbitration can be an intimidating process, each is easy once you understand the mechanics.