With complaints about the latest property-tax appraisals leading water-cooler talk around town, the Concho Observer wanted to take a look at how tax-appraisal districts work, and how to protest your appraisal.
Appraisal districts in Texas are statutorily bound by the tax code and have stringent rules and regulations governing every aspect of their work, but the process is complicated with dozens of variables involved.
If you feel like your assessment is too high, the appraisal district wants to hear from you, but the deadline to file a protest is May 21 — or 30-days after your notice was mailed — whichever is later.
Details about how to protest your appraisal appear at the end of this report.
Process and Oversight
Keeping up with the market value of every property in the county is no easy task, and understanding all the forces at work within each market can be challenging, even for professionals.
According to officials, the appraisal district’s job is to find the market value of properties and to be equitable.
Owing to the number of different accounts and the need to keep schedules, the district relies on mass appraisals, but they also do field work. (They do not go inside homes unless the owners want them to.)
Appraisers look at homes in different classes, and consider age, condition and depreciation.
They run replacement-cost analyses based on a nationwide cost schedule with local modifiers, unique to San Angelo, and they look at sales in the area and comparables in much the same way a fee appraiser would in order to determine market value.
Then they compare the total-value of the land along with all improvements against what the market shows in that area.
Variables include the overall stability of the housing market at each level — and in every neighborhood, rural enclave and isolated property with acreage.
The number of houses available in every given price point, and the number of sales and overall competition in the market all play a role.
The market in Southland is different than the market in Santa Rita. The north side of town is different than the south side of town. Appraisal districts update information regularly, making adjustments according to what cost schedules and land values together show against the market.
Experts say the key to understanding your appraisal is having direct knowledge of the market, and studying the market is exactly what appraisal districts in Texas do.
Checks and Balances
Districts are tested by the Comptroller every two years, and the Comptroller issues the School District Property-Values Study. The people also have a right to protest their appraisals.
The Tax Code
All of the rules for Central Appraisal Districts are spelled out in Title I of the Texas Tax Code, with the statutes concerning the appraisal process spelled out in Chapter 23.
Section 23.01 of the Tax Code requires each district to appraise taxable property “at market value,” which is defined as the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
- The property is offered for sale in the open market with a reasonable time for the seller to find a purchaser.
- Both the seller and the purchaser know of all the uses and purposes to which the property is adapted, and for which it is capable of being used and of the enforceable restrictions on its use, and;
- Both the seller and purchaser seek to maximize their gains, and neither is in a position to take advantage of the need or demand of the other.
This section of the Code also spells out the methodology districts must use to calculate the value of your home.
Determining Market Value
The market value of property shall be determined by the application of generally accepted appraisal methods and techniques.
If the appraisal district determines the appraised value of a property using mass-appraisal standards, the mass appraisal standards must comply with the Uniform Standards of Professional Appraisal Practice.
The same or similar appraisal methods and techniques shall be used in appraising the same or similar kinds of property.
However, each property shall be appraised based upon the individual characteristics that affect the property ’s market value, and all available evidence that is specific to the value of the property shall be taken into account in determining the property ’s market value.
Generally, the process they follow depends on one of two methods used to compute the property assessment: Cost method or Income method.
COST METHOD (Sec. 23.011)
If the chief appraiser uses the cost method of appraisal to determine the market value of real property, the chief appraiser shall:
- (1) use cost data obtained from generally accepted sources;
- (2) make any appropriate adjustment for physical, functional, or economic obsolescence;
- (3) make available to the public on request cost data developed and used by the chief appraiser as applied to all properties within a property category and may charge a reasonable fee to the public for the data;
- (4) clearly state the reason for any variation between generally accepted cost data and locally produced cost data if the data vary by more than 10 percent; and
- (5) make available to the property owner on request all applicable market data that demonstrate the difference between the replacement cost of the improvements to the property and the depreciated value of the improvements.
INCOME METHOD (Sec. 23.012) (a)
If the income method of appraisal is the most appropriate method to use to determine the market value of real property, the chief appraiser shall:
- (1) analyze comparable rental data available to the chief appraiser or the potential earnings capacity of the property, or both, to estimate the gross income potential of the property;
- (2) analyze comparable operating expense data available to the chief appraiser to estimate the operating expenses of the property;
- (3) analyze comparable data available to the chief appraiser to estimate rates of capitalization or rates of discount; and
- (4) base projections of future rent or income potential and expenses on reasonably clear and appropriate evidence.
- (b) In developing income and expense statements and cash-flow projections, the chief appraiser shall consider:
- (1) historical information and trends;
- (2) current supply and demand factors affecting those trends; and
- (3) anticipated events such as competition from other similar properties under construction.
Statutory Limits
Section 23.23(a) sets a limit on the amount of annual increase to a residence homestead’s appraised value to not exceed the lesser of:
- the property’s market value; or the sum of: 10 percent of the property’s appraised value for the preceding year;
- the property’s appraised value the preceding year; and the market value of all new improvements to the property.
Circuit Breaker Limitation
Section 23.231 says Real property valued at $5 million or less will benefit from a 20-percent limitation on the net appraised value of the property used to calculate property taxes.
Each property that qualifies will receive a Notice of Appraised Value, typically in April, that specifies the market value of the property as of January 1. These properties will also have a net appraised value that will be the lesser amount of:
Last year’s net appraised value PLUS 20 percent of that value PLUS the market value of all new improvements on the property, OR this year’s market value.
You must own the property for at least one full calendar year (January through December) before you are eligible for a 20-percent limitation.
Properties already receiving a homestead exemption are not eligible and will continue to receive the standard 10 percent limitation on their net appraised value.
If you sell your property, remove your homestead exemption and continue to own the property, or purchase a new property, any existing limitations on the property’s value will be removed and the tax base will increase to the current market value.
The property will benefit from a limitation after one full calendar year.
The Texas Legislature only authorized the circuit breaker limitation for the 2024, 2025, and 2026 tax years.
Filing a Protest
While appraisers make every effort to have a comprehensive knowledge of the local market, they are limited by the information they have to work with, and many taxpayer issues are resolved with a simple telephone call every year.
If your property has suffered damage or there is deferred maintenance you feel would be likely to impact the appraised value, you should document those things thoroughly and have photographic evidence to show, in addition to a detailed written description.
The protest is the taxpayer’s opportunity to give their opinion about the appraisal, and the letter they send out every year tells you what to bring: statements, appraisals, information about age and condition, and cost of repairs.
RIGHT OF PROTEST (Sec. 41.41)
(Effective until Jan. 1, 2027)
(A) A property owner is entitled to protest before the appraisal review board the following actions:
- (1) Determination of the appraised value of the owner’s property or, in the case of land appraised as provided by Subchapter C, D, E, or H, Chapter 23, determination of its appraised or market value;
- (2) Unequal appraisal of the owner’s property;
- (3) inclusion of the owner’s property on the appraisal records;
- (4) denial to the property owner in whole or in part of a partial exemption;
- (4-a) determination that the owner’s property does not qualify for the circuit breaker limitation on appraised value provided by Section 23.231;
- (5) determination that the owner’s land does not qualify for appraisal as provided by Subchapter C, D, E, or H, Chapter 23;
- (6) identification of the taxing units in which the owner’s property is taxable in the case of the appraisal district’s appraisal roll;
- (7) determination that the property owner is the owner of property;
- (8) a determination that a change in use of land appraised under Subchapter C, D, E, or H, Chapter 23, has occurred; or
- (9) any other action of the chief appraiser, appraisal district, or appraisal review board that applies to and adversely affects the property owner.
Other tips
It’s a good idea to type or write up all of your reasoning as to why your appraisal is too high. Having it written down can help you keep your thoughts organized during the proceedings.
Make sure you have all estimates and appraisals signed and attested-to in advance of your hearing, if necessary.
While there are several companies that specialize in representing individuals in property-tax protests, no company can guarantee they will be able to lower your appraisal. Experts recommend caution in engaging these services and suggest getting referrals from people you know and trust.
Experts also say that while having a fee appraisal in hand carries a certain weight in the proceedings, getting a fee appraisal is no guarantee your assessment will be changed.
According to a Google.com search, property appraisals in the San Angelo area vary between $300 and $600 typically.
During proceedings, it’s important to remember that the protest process is a two-way information exchange; listen carefully to everything the appraisal district has to say and stay calm when it is your time to speak. Verbally abusing the people you need help from will almost always work against you.
Protest forms may be submitted electronically through the Tom Green Co. Appraisal District’s website.
Follow this link to see all of the necessary property-tax forms.
