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Contesting Real Estate Tax Assessments in Texas

Posted By Jim On 01/19/2006 @ 4:40 pm In Personal Finance,Taxes,The Home | No Comments

Terri W. of Educating The Wheelers [3] left this very insightful and educational comment (on a post I wrote earlier today about contesting property tax assessments [4]) that I felt deserved its own post so no one in Texas (and elsewhere because I think the principles still apply) misses it. It involves what you must do to contest your property value in Texas whenever you get your tax assessment (for the first time, the year after you purchase your home).

For any new homeowners in Texas, this is a must read if you want to save serious money and win a property tax appeal. Thanks very much Terri!


Huh. Contesting your property value in Texas is apparently a whole different ball of wax than elsewhere. There’s a homestead exemption here, so in areas that have very low turnover [like, say ... my neighborhood] the tax assessed value of the home is way, way below the “real” value. So you know they love it when a new person *finally* moves in so they can up an assessment. And once they up your assessment, they can finally up your neighbor’s assessments because they’ll now have a recent comparable value.

So, the year after you move in, you’ll get a tax assessment in the mail with what my realtor likes to call a “Come and See Us” eye popping assessment on it. But there’s an interesting two step at play here, and one that you’d never know about unless you’ve got an insider who’ll tell you it — and our realtor just happened to be a former member of the appeals board.

So, technically, they’re not supposed to “know” what you paid for the house, though why this is the case, I have no idea. So, you go in to contest your assessment, and the first thing they say is, “Well, what did you pay for the house?” and if you don’t know what you’re doing, you tell them, and you’re stuck. If you have been coached, you say, “But I’m not contesting on sales price, I’m contesting on equity!” — which means that, hey, I checked all the records and all my neighbors are paying X/square foot in property taxes, and you are trying to assess me at X+Y/square foot, and that’s not equitable! But, of course, they’re trying to raise *your* assessment so they can go back to your neighbors and raise *theirs* so they are equitable with yours.

I found it helpful to play very, very dumb and be opportunistically distracted by my infant baby when they really tried to press me for what our purchase price was. Which, by the way, they knew, even though legally they couldn’t use the number until I confirmed it. “But you paid X for your house!” “I’m contesting on equity!” Say anything but “Yes,” and the crazy dance goes on.

Anywhoo, the appeals board sided with me because, hey, it wasn’t equitable! But it was the craziest experience, and if I hadn’t been coached, I would currently be paying 500 dollars more a month in property taxes than I currently am.


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[3] Educating The Wheelers: http://educatingthewheelers.blogspot.com

[4] contesting property tax assessments: http://www.bargaineering.com/articles/contesting-real-estate-tax-assessments.html

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