Recap: How to Protest Your Property Taxes (And Win)

One thing is clear from the overwhelming interest in last week’s free webinar event with CandysDirt.com and PropertyTax.io — After receiving a shock in our mailboxes, many North Texans are ready to fight back against rising property taxes.

“We just got our tax bill in the mail, probably five or so days ago and I just left it there in the kitchen,” said Candy Evans, CandysDirt.com Publisher and webinar emcee. “I didn’t want to look at it. I made my husband look first.”

More than 250 people attended “How to Protest Your Property Taxes (And Win),” an hour-plus webinar that combined the expertise of property tax appraisal experts Glenn Goodrich and Will Wiggins, frank talk about the politics of property taxes, in-depth charts with the latest data available, and a question-and-answer session with attendees.

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In case you missed it, here are highlights of the discussion:

Why are property taxes so high in Texas? (And why protest them?)

Dallas-Fort Worth-Arlington has the highest effective property tax rate in the state and Texas has the seventh-highest property tax rate in the United States. This is, in part, because the state does not levy another more common tax found in other states, such as state income tax. As a result, property taxes are the major revenue source for schools, roads, public safety, and other infrastructure.

“People come here, they move here, and they say, ‘Your real estate is so affordable!’ Then they’re hit with the shockaroo of the property taxes,” Evans said.

But the system is antiquated, too. The property tax system in Texas was designed decades ago, when homes were more affordable and the value of properties did not increase 20 percent year over year as it does now.

Equitability of the system

The current system is becoming increasingly inequitable, with residential properties often paying more than commercial ones. As a result, homeowners pay approximately 95 percent of their market value while commercial properties pay only 70 percent.

But why do residential homeowners pay more than commercial property owners?

Appraisal districts have access to more data for residential properties than commercial ones through MLS systems, the panel explained. Home sales prices often get recorded in MLS but in its commercial equivalent, CoStar, prices are rarely entered. So county appraisers are armed with more information to fully and confidently value residential property than commercial property.

Also, most commercial firms and their representing agents protest their appraisals every single year, so the value that the appraisal district sets is often not the final word. On the other hand, many homeowners are unrepresented and expected to understand the complicated protest process. As a result, many homeowners do not protest their property tax appraisals yearly, so often the value that the appraisal district says for your property goes, in essence.

“I think we’re at a point in time where it’s just we need to be protesting every year,” Glenn Goodrich said.

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CandysDirt.com Webinar Slide Presentation

The property tax consultants discussed the trends in the US housing market, particularly in Texas in the following set of slides presented during the webinar. Goodrich and Wiggins noted a steady increase over the last ten years with a heavy increase in 2021 due to limited supply and low interest rates. However, they also highlighted recent skepticism and doubt caused by national forecast uncertainty, inflation concerns, supply chain issues, and shortages of materials affecting construction costs.

“It’s obvious here that over the last 10 years that there’s been a steady increase. You see a heavy increase there in 2021. And we all know why — limited supply and low interest rates. Especially in Texas, where we saw the job economy thriving, so it was just a case of limited supply. You had a lot of people moving here and that drove up prices, and we still see effects. 

The panel discussed how downturns can play into their hands as property tax consultants. The graphs show that despite falling median sales prices for different counties, notice of appraised values lagged behind. That lag inflated appraised values by at least 10-15 percent due to data gathering during peak markets without time adjustments. The consultants advised protesting values based on current market conditions rather than past peaks.

Different counties use different terms for appraised value which can cause confusion among taxpayers when trying to understand how much tax they owe on their homes each year. For instance, some counties call appraised value “assessed” while others call it “capped.” Consistency is needed across all counties so taxpayers can easily understand how much tax they owe each year.

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Strategies for Winning Your Property Tax Appraisal Protest

1. Always meet the deadline.

Homeowners must file a protest before the deadline. No ifs, ands, or buts. The online protest option is recommended for ease of use. Deadlines vary by county, but it is generally May 15th. Dallas has an extended deadline this year until May 21st.

2. Request evidence.

Homeowners should request the appraisal district’s evidence at least fourteen days prior to their scheduled appraisal review board hearing. Typically, this evidence packet is available in the online e-protest portal. This allows homeowners to review and practice rebuttals effectively, as well as avoid surprises during the hearing.

3. Don’t say “taxes.”

During hearings, homeowners should talk about value instead of taxes. The appraisal board doesn’t want to hear a gripe about high property taxes. Instead, focus on property value as a more effective strategy to make your case.

4. Take photos

Taking photos that show issues with a property’s condition can be an easy route for reductions during hearings. However, recent sales can also be used if done skillfully.

5. Choose the right kind of review panel.

Homeowners have the option of choosing an in-person protest or a remote, telephone session, but a lesser-known option is choosing a single-member ARB instead of having three people on their panel during hearings.

Telephone Hearings: The speakers agreed that telephone hearings are not ideal as they lack rhythm, climax, and eye contact. However, Glenn suggested that property owners who cannot attend in person should still opt for telephone hearings instead of not showing up at all.

Panel Members vs Single Panel Member: The speakers discussed the pros and cons of having a panel of three members versus a single panel member in property tax protests. Glenn argued that having a single panel member can lead to better results as there is no groupthink, while Will preferred the triumvirate system for its impartiality and deliberation on record.

The property tax consultants emphasized that annual mediums are not as important as focusing on comps from third and fourth quarters when protesting values — since those are products of falling real estate markets, affected by factors such as interest rate spikes or inflation concerns.

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Glenn Goodrich will select unanswered questions from the webinar and answer them in a followup on CandysDirt.com, so stay tuned.

Visit PropertyTax.io to find free resources to file your own protest. If you prefer to leave the protest to the professionals, elect for the Property Tax Protection Service, where PropertyTax.io will handle the protest for you.