How to Protest your property tax.
(The Dallas County Appraisal District (DCAD) handles our appraisals. They are located at 2949 N. Stemmons Fwy. Dallas, Texas 75247-6195, their phone number is 214-631-0520 and their hours of operation are 8:00 AM – 5:00 PM. and their website is www.dallascad.org.)
Tips & Tricks for Appealing Your Property Taxes in Dallas County
Protesting annually is the cornerstone of minimizing your property taxes. If you don’t appeal for four years, and the appraisal district does not change your value, they can increase your value by 50% in the 5th year! Protect your 10% homestead cap by appealing annually. If your assessed value does not change, and you do not appeal, you forfeit your right to a 10% maximum increase the following year.
A homestead exemption often reduces property taxes by 20%. It is available if you owned and resided in your home on January 1 of the relevant tax year. The most meaningful way to reduce your property taxes for your home is to obtain a homestead exemption.
Reducing property taxes is an iterative process. The prior year’s assessed value is given strong consideration in this year’s appeal. Reduce property taxes by annually appealing. You can file a notice of appeal by utilizing the comptroller’s form or by sending a letter to the Dallas County Appraisal Review Board.
Property owners have the right to obtain all evidence the appraisal district will utilize at the appraisal review board (ARB) hearing 14 days before the hearing. Obtaining the DCAD evidence (House Bill 201 information) greatly increases your chances for success at the Dallas County Appraisal Review Board hearing. If you request this information, the appraisal district can’t lawfully present any additional information at the hearing.
The appraisal district maintains a “record card” for each property with information such as land area, building size, quality of construction, condition and many other fields of data. Research the DCAD “record card” which has information used to value your property. There are often errors with factors such as land area, building area, year built, year remodeled, grade (quality of construction) and CDU (condition, utility and desirability).
Market value is the sales price you should expect to obtain in an arm’s length sale. Unequal appraisal addresses whether your assessment is fair. When preparing for your Dallas County Appraisal Review Board hearing you should gather information on market value and unequal appraisal
Comparable sales summarize information regarding the sales price, size, age, condition and other relevant data for recently sold properties which are similar to yours. Comparable sales are the cornerstone of market value. Sources of comparable sales data can be found in the House Bill 201 package obtained from the DCAD and MLS sites.
Unequal appraisal is a relatively new option for appeal at the ARB hearing. The legislature clarified this issue in 2003. You can reduce your property taxes (for homes or commercial real estate) by presenting information on comparable properties with more favorable assessments. Unequal appraisal is often effective in reducing property taxes. Even if your assessed value is below market value, you can appeal based on unequal appraisal.
Unequal appraisal occurs when the DCAD has assessed your property at a higher level than similar properties. You can research assessment comparables on the DCAD website. Seek assessment comparables which are as similar as possible with regard to location, age, size and are the same type of property.
Sales chasing occurs when county appraisers selectively reappraise recently sold properties. This occurs because of the annual ratio study performed by the Texas Comptroller. (ARB members at a 2006 ARB hearing explained sales chasing is equal appraisal because all properties are subject to sales chasing.) Unequal appraisal can be particularly helpful for recently purchased properties. DCAD appraisers are reluctant to reduce the assessed value, when it is below the recent purchase price, even if it is unequally appraised. However, the impartial Dallas County Appraisal Review Board is required to consider appeals on both market value and unequal appraisal.
Arraying data in a table or matrix is an effective way to present an unequal appraisal analysis. Important components of an unequal appraisal presentation include a reasonable number of comparable properties (about 2 to 10) that are appropriately adjusted. These properties are usually considered to be properties that are similar in regard to the quality and quantity of improvements.
The cost of an independent appraisal can be substantial. Compare potential property tax saving with the cost of an appraisal. Obtaining an independent appraisal can effectively document market value and will receive meaningful consideration from the DCAD appraiser and the Dallas County Appraisal Review Board panel members.
DCAD typically established the assessed value for recently built properties based on land value plus the estimated cost of construction as of January 1. When the DCAD cost estimate exceeds the actual construction costs (as of January 1), it probably makes sense to provide cost data. You should also consider unequal appraisal. For recently built properties, the DCAD appraiser will want to review actual construction cost. A cost segregation report prepared by a qualified appraiser can separate personal property from real property.
The DCAD appraiser usually attempts to resolve the property tax protest at the informal hearing. He is not compensated based on how little he adjusts property tax assessed values. At the hearing you will spend a few moments developing a rapport with the appraiser. Be polite with the appraiser - the appraiser is not opposed to reducing your property taxes.
Bring 5 copies of documents you plan to present to the ARB. Organize your thoughts and information before starting your presentation. Your presentation to the Dallas County Appraisal Review Board should be kept between three to five minutes, since the entire hearing only lasts 15 to 20 minutes.
In 2005, the Texas Legislature provided another option to extend the property tax appeal process - binding arbitration. If you are not satisfied with your results from the appraisal review board hearing, you can request binding arbitration. When compared to a judicial appeal, advantages of binding arbitration include a lower cost, informal process, speedier resolution and the loser pays provision.
Binding arbitration allows property owners an informal and inexpensive option if not satisfied with the Dallas County Appraisal Review Board’s decision. Binding arbitration is available for owners of properties with an assessed value of $1 million or less (after the Dallas County Appraisal Review Board hearing) who are only appealing on market value. However, binding arbitration can only be used for market appeals for real estate with a value of $1 million or less after the ARB. It may not be used for unequal appraisal, business personal property or minerals.
Many owners of single-family and commercial real estate use a property tax consultant so each property is protested each year. Although you can appeal on your own, hiring a consultant to appeal on your behalf is risk free because there is no flat fee and no upfront costs; you only pay a portion of the savings. With a contingency fee, there is no cost unless your property taxes are reduced.
Useful links: much info can be found at O’Connor & Associates website (see above) and if you don’t have an exemption form there is one at: www.poconnor.com/pdf_forms/50-114.pdf.