Wednesday, December 9, 2015

Protest Your Texas Property Taxes

I'm Richard Skotak, a Texas Property Tax Arbitrator.

Texas Property Tax Arbitrator | Richard SkotakI can help you with arbitration information throughout the state.

What should you know about property taxes in any Texas county?  If you received your notice of appraised value for property tax purposes from the County Appraisal District and have questions about the tax amount, you can protest.  All property is required to be appraised as of January 1 for tax purposes.  You should protest every year and use every step available to you - particularly arbitration.

If you would like more information about how you can protest your property taxes in Texas, contact me at 832-200-5676 or

Wednesday, November 25, 2015

Texas Property Tax Protest

Uniform and Equal Appraisals

Equity Approach

Unequal Appraisal

Texas Property Tax  Code Sec. 42.26

          (a)  The district court shall grant relief on the ground that a property is appraised unequally if:
              (3)  the appraised value of the property exceeds the median appraised value of a reasonable number of comparable properties appropriately adjusted.

For example, suppose you want to value a condominium in a building with a number of units of similar square footage, age, date of sale and floor location and the primary differences are interior features and amenities. By pairing a few assessed values, you can see differences in the values for crown molding as well as values for an upgraded kitchen. If the first (1) condo is assessed for $375,000 with crown molding and an upgraded kitchen, and the second (2) is assessed for $370,000 with no crown molding but has an upgraded kitchen, and the third (3) condo assessment is $340,000 with no upgraded kitchen and no crown molding, while the fourth (4) assessment is $345,000 with no upgraded kitchen but with crown molding, and finally the fifth (5) condo is assessed for $380,000 has crown molding and upgraded kitchen. You would match the first and second for a premium of $5,000 for crown molding being the only difference. You would match the first and fourth for a premium of $30,000 for an upgraded kitchen being the difference between them. You then would match the first and third for a premium of $35,000 for crown molding and an upgraded kitchen. Finally, you would match the second and third for a premium of $30,000 for an upgraded kitchen. An upgrade kitchen would be assessed at $30,000 and crown molding at $5000.

Your condominium has neither crown molding nor upgraded kitchen. An appropriate adjustment for the assessed properties would be as follows:  #1: $375,000 -$5000-$30000=$340,000; #2:$370,000-$30,000=$340,000; #3: $340,000; #4: $345,000 -$5000= $340,000; #5: $380,000 -$5000-$30000=$345,000. The middle number is $340,000, which is the median. So now you have a “reasonable number of comparable properties”  “appropriately adjusted” meeting the above requirement for relief.  If your property is assessed at $380,000 and you have no crown molding or upgraded kitchen, it appears $340,000 would be more reasonable, remember that it does not matter what the comparable sales indicated for market value, even if it is $400,000. If the ruling is in your favor on an unequal appraisal, your assessment will be reduced. This can be found in the State of Texas Constitution. This approach is to guarantee that similar properties are assessed the same; all will be uniform and equal.  Most all of the central appraisal districts(CAD) have available the assessed values of properties in an advance search, along with the information on the square footage, pool, patio, age, lot size, etc, and their assessed values used.  Or if more details are desired local Realtors can search for the sold detail sheet to show interior features when it was listed or sold.  This is a little work, but rewarding.  Most tax rates are close to 3%, so you save $300 for every $10,000 reduction. This example would save $40,000 off of the assessed value  X 3%=$1200.00. The above method is just one approach, but should give you a good idea of how adjustments are calculated.

“The arbitrator, like appraisal review board members, must make a determination of value. If unequal appraisal is claimed, statutory requirements must be followed to make that determination. If a property owner claims that the appraised value of his or her property is greater than the median appraised value of comparable properties, the statutory formula for determining the value must be followed. The value can be reduced if the appraisal district cannot establish that the appraised value of the property is equal to or less than the median appraised value of a reasonable number of comparable properties appropriately adjusted. Therefore, to determine an unequal appraisal claim based on median appraised value evidence, an arbitrator must do four things: 1)consider the size of the sample to make sure that it is a reasonable number; 2)determine comparability of the properties in the sample; 3)consider whether or not value adjustments, if applied are appropriate according to appraisal standards and the judgment of the property owner or expert; 4)and ensure that the median is calculated correctly.”

To find the Median, place the numbers you are given in value order and find the middle number. Example: find the Median of {12, 10, 13, 17, 14, 9,15}. Put them in order: {9,10,12,13,14,15,17) The middle number is 13, so the median is 13.  If there are two middle numbers, you average them. Five to nine properties should be okay, but it will depend on how many choices of similar properties exist in your area. I will post commercial properties protests and the Uniform and Equal approach soon.

“If a conflict exists between taxation at market value and equal and uniform taxation, Equal and uniform taxation must prevail” - The Court of Appeals of Texas, Houston (14th District).

Richard A. Skotak, Broker Associate 
Texas Arbitrator ID # 32020647007

Tuesday, November 10, 2015

Who Are My Neighbors?

Would you like to learn more about the people who live in your neighborhood or details about a subdivision to which you are thinking of moving?  We can create a quick Neighborhood Report for you at no cost.  
Visit The Silver Star Group Facebook page and get yours today.  

Thursday, October 29, 2015

Halloween's Not Washed Up

Are you worried about the weather this Halloween?

Have no FEAR!

Channel 13 has some great other ideas for Houston Halloween Fun.

Friday, October 23, 2015

Friday, September 18, 2015

Texas Property Tax Protests


I’m going to discuss unequal appraisals, which are hardly ever used by homeowners and frequently used by commercial properties.  I’ll include some points that I’ve learned from being a property tax arbitrator since 2005.

Always check the boxes “Value is over market” & “Value is unequal compared with other properties” on the Notice of Protest form that you receive.  This gives you two ways to win.  If you do not check the unequal box, you are not entitled to use it if you have to go further in your appeal.  At this point you will have gone before the appraiser at the Central Appraisal District and you were not satisfied and so you then went before the Appraisal Review Board, which set the value, and again you were not satisfied.  There are two choices from here; District Court or Arbitration.  Court will probably require an attorney and will run several thousand dollars.  Arbitration has a new fee schedule as of September 2015.
Residence homestead
$500,000 or less
$ 450

Residence homestead
More than $500,000
$ 500

Not residence homestead
$1 million or less
$ 500

Not residence homestead
More than $1 million but not more than $2 million
$ 800

Not residence homestead
More than $2 million but not more than $3 million

An arbitrator has been trained and has qualifying documentation to be on the arbitration registry.  Texas Tax Code Chapter 41A gives property owners, meeting certain criteria, the option of requesting binding arbitration as an alternative to filing an appeal of an appraisal review board (ARB) decision to State district court.  All proceedings must comply with Comptroller Rule 9.804 and they demand a fair and impartial treatment of property owners, agents, and appraisal districts alike to ensure that the arbitration is successful.  The hearings are normally held in a library, or office in your district, or can be conducted by teleconference once after the exchange of information.  The hearing has a set time, when you and the district are available, and normally will run one to two hours or less. Ask for House Bill 201 from the District if you have not already received a copy from your initial hearing. These are the only sales the CAD will be allowed to use.

A few years ago, a site on Loop 610 sold for a confirmed $77 million, using the equity approach, it was reduced to $31 million.  Office buildings, apartments, and land tracts are receiving reductions using uniform and equal approach, simply by proving from the tax rolls that other similar properties are valued at less.

The Texas Constitution provides that taxation shall be equal and uniform.  Section 42.26 (a) of the Texas Property Tax Code sets forth the “Remedy for Unequal Appraisal”.   A property owner is entitled to relief on the grounds that a property is appraised unequally, unless the CAD appraiser establishes that: “The appraised value of the property is equal to or less than the median appraised value of a reasonable number of comparable properties appropriately adjusted."  Note that there are three approaches that may be used but the former statement is the most frequently used.”

Comparable properties are usually considered to be properties that are similar in quality and quantity.  Assemble a list of properties similar to your property along with their assessed values.  Most counties have a website where you may research properties in your area that are similar to yours and the assessed value.  Go to the advanced search and run your subdivision or street, etc.  Make adjustments for differences between these similar properties and your property.  For homes, consider features such as age, building size, site improvements, and land size. Realtors in your market can help with what may be considered reasonable contributory dollar adjustments, pool, patio etc.  It is best to use comparable properties that are the most similar to your property and require the least number of adjustments. For commercial properties, the process is the same.  Remember to get the median of the properties, 9 should be a good number, arrange in order and take the median #5 as the assessed value to use in your evaluation.

The equity approach may be used along with your market value approach.  If you remember to check both boxes, you will have two chances to establish what is a fair value. Protesting is not easy but you again have two ways to win. For example, if your tax rate is 3% and you are protesting a CAD value of $450,000 and you say it should be $400,000, but the arbitrator rules $430,000, you forfeit your filing fee, but you reduced you tax bill by $20,000 which is a $600 savings.  If the arbitrator rules $420,000, you win back all but $50 (State fee) of your filing fee and you saved $900 off your tax bill.

It is worth a look to see if other similar properties are assessed lower than yours. Read the tax codes and comptroller rules to help prepare for protesting.  If necessary, consult an attorney familiar with the process.  The Appraisal District has the burden of establishing value by a preponderance of evidence.  If this is not possible, then the protest is decided in favor of the property owner.

Continue to watch this blog for more information.

Richard A. Skotak
Arbitrator #32020647007

Monday, August 10, 2015

My House Will Never Sell

Yes it will sell.
Keep Calm and let Richard sell your home quickly.
All you need is an experienced knowledgeable real estate agent.

Monday, June 8, 2015

Free Snow Cones!

Please join The Silver Star Group of RE/MAX Top Realty on Tuesday the 9th from 1:30 to 3 as we cool off with FREE Snow Cones and enjoy the original art creations from Pearland Arts League in The Top Gallery.