Posted: Wed, 16 May 2018 11:12 AM - 26,083 Readers
By: Sally Grace Holtgrieve
The annual property value protest season has come and gone in Lake Travis-Westlake, but a Community Impact Newspaper analysis of Travis County appraisal data found over recent years, as values move upward, a steady number of homeowners are protesting appraisal notices to save a few dollars on their tax bill.
After filing protests for himself and some friends, Austin-based lawyer Jordan Todd said he realized the trend of homeowners protesting their appraisals would only continue to grow. As a result, Todd decided to start a business, Real Value IQ, that he described as TurboTax for property appraisal protests.
“[Protests have] never been an issue, where people are talking about it across the state,” Todd said about protests this year. “I’ve never seen it in the news like this. It’s a big deal, and the growth in the area is not going away anytime soon, so this is going to keep being a topic because
this whole [taxing]system thrives on new construction.”
The deadline to file a protest this year in Travis County was May 15.
As more families move to Western Travis County every year, the Travis Central Appraisal District (TCAD) sends out more property appraisal notices. In turn, as values rise, the number of protests filed by residents and real estate agents each year has grown, according to appraisal district data Community Impact Newspaper looked at.
Mark Strüb, founder of Strüb Residential, a local real estate firm, has been in the real estate industry about 14 years. He said assessed values have become high in the area only in the past decade. Now he encourages his clients to protest every year.
“It’s the best way to hold appraisers and the county accountable,” he said, adding that his own home went up another $300,000 this year. “Austin is already expensive. Housing is so expensive to get into; then this happens again year after year. When that first appraisal notice comes to a new homeowner, it can be shocking.”
There is often confusion when it comes to filing a protest, Strüb said.
TCAD Chief Appraiser Marya Crigler said there is also often misunderstandings regarding the roles of various components of the property tax system.
What is an appraisal district?Before 1979 every taxing entity in Texas did its own appraisals and assessments, Crigler said. If property owners wanted to contest their appraisal they had to do so with each of their separate taxing units.
The Texas Legislature then decided to create a system, but needed to ensure fairness between taxpayers and taxing entities. That led to the creation of central appraisal districts (CADs) to sit between two parties where conflicting interests might exist.
TCAD does not advocate for the taxing units or the taxpayers, Crigler said.
“[The Legislature] established for us that all appraisals should be at market value,” she said. “That’s to achieve an equitable distribution of the property tax burden according to value, so each person pays their fair share according to the value of their property.”
For example, the owner of a mansion might pay more than someone who owns a mobile home, but someone has to officially determine the value of each of those properties before tax rates can be set, Crigler said.
To determine the true value of every property in the county, Crigler said TCAD looks at a variety of characteristics, including what kind of house, the size, any new construction and the property’s general condition.
“The biggest thing that’s going to drive the market is what other similar homes are selling for,” Crigler said. “If other homes near you are selling for more, that is going to increase the value determination that we make in terms of how we appraise your
property.”
She said if a homeowner does a remodel of any kind, that could also increase neighbors’ property values.
The business of protestingAbout a quarter of property appraisals in the county are protested annually, according to Danny Walker, a real estate investor who represents clients in appraisal protest cases. While some people go through the process on their own—which can entail steps from a simple online protest to appearing with evidence before an arbitration review board—others pay a professional a small fee to take care of the protest on their behalf. Last year Walker said his company protested 150 appraisals in Travis County, and this year it is protesting about 300.
Getting the value as low as possible is the goal of those in the protesting business, Walker said. However, TCAD is not “coming at it from the other side,” he said. TCAD is not trying to make the rate as high as possible, rather as accurate as possible.
“The process is nowhere near as adversarial as some people think it is,” Walker said. “The appraisers have no vested interest in the values being as high as possible. The tax revenue is a function of appraised values multiplied by tax rates. TCAD doesn’t set tax rates; they set appraisal
values.”
If a person thinks his or her value was set too high, the first thing he or she should do is talk to local realtors and see what comparable properties are selling for in their neighborhood, Crigler said. If a homeowner can determine their property might not sell for as much as it was appraised at based on comparables—recent home sale prices—he or she can consider filing a protest with the district before its annual deadline, which was May 15 this year.
When a person protests, market value is all TCAD can adjust. However, protesting value may not change the overall tax bill.
“The majority of the time if we make an adjustment to the market value [for a protesting property owner]it doesn’t impact them because it’s not going below their assessed value,” Crigler said.
Assessed value is the limited value based on homestead exemptions, and the protection that common exemptions offer is significant for property owners on their main property, according to Crigler.
Furthermore, tax rates have not been set at the time values are announced each year, so even if TCAD makes a significant reduction, a property owner could still pay more because the tax rate ended up rising.
When tax rates are set each year depends on each taxing entities’ fiscal calendar.
Todd said protesting is a homeowner’s ability to participate in a conversation about his or her largest asset.
He said residents have the right to appeal their appraisal and that the word “protest” should not deter anyone
Dealing with protests online— including video conferencing formal hearings—is the future Todd predicts when it comes to filing protests. TCAD already gives homeowners the option to file online.
“You always see Austin half a step ahead of everybody when it comes to technology,” Todd said. “Seeing [TCAD] offer this now, this is the segue.”
Protests impact schoolsThe largest taxing entity on an appraisal notice is typically from the local school district. Protesting rising appraisal values has a net effect on those districts.
When appraisal values are lowered as a result of protests, it means fewer funds coming into the district. said Johnny Hill, assistant superintendent of business, financial and auxiliary services for Lake Travis ISD.
He added that the district does not take a position on whether individuals should protest their values.
Hill said LTISD has not changed its tax rate since the 2011-12 school year. The district last raised it two bond programs ago.
Eanes ISD Superintendent Tom Leonard echoed Hill’s comments and said it is not the district’s role to determine property values.
He said regardless of the amount collected, EISD uses funds from the taxpayer-approved rate on property assessment to “efficiently and effectively” educate students, operate schools, run buses and more.
