Tips and Tricks to Reduce your Property Value-DIY HCAD Property Tax Protest
Updated: Jun 4
It’s that time of the year again, you may be taking a look at your current tax appraisal and saying to yourself, “Wow, if HCAD thinks my house is worth that kind of money, I’ll sell it to them right now, ON THE SPOT!” That’s right my friends, it’s time to protest your property value in order to lower those heightened property taxes. Some may call it a “fight,” others may call it a “conversation” with your friendly appraiser. As a Broker, I suggest to all my clients, customers, friends, and even the mailman to fight your property value EVERY YEAR. This can save you hundreds of dollars in the short term and potentially thousands for the long term. When the assessment comes, make the appointment and spend some time doing your research. It truly pays off and you DO NOT need to pay anyone to do this for you. In fact, there are some studies that show you will get more bang for your buck doing it yourself. (See this article from the Houston Chronicle http://www.houstonchronicle.com/news/houston-texas/houston/article/DIY-tax-protests-garner-larger-breaks-study-finds-4461331.php )
Here are some tips and suggestions that will help you get that assessment as low as it can go.
1. You should receive a Notice of Appraised Value in the mail by April 1st.
2. Fill out the Notice of Protest or begin the Isettle process on HCAD.org. The deadline to file is May 15th. Fill out Sections 1 & 2 in full. MAKE SURE YOU PAY SPECIAL ATTENTION TO NUMBER 3. Check ALL BOXES that apply to your situation, as that will decide what type of evidence you can present. I have found that most folks who are protesting that have lived in their homes for over two years need to check Incorrect Appraised (Market) Value and Value is Unequal Compared with other Properties. Make sure that based on your evidence, you have the correct boxes checked. There are other options on there was well.
3. You have the following two ways of protesting at the onset:
Preliminary Informal Meeting with an Appraiser- You and the appraiser will sit together in one of the 50 or so cubicles at the HCAD building to discuss and review the evidence that you came up with and their records to try to come to agreement. Many protests are resolved at this meeting. If you are not content on the findings of this meeting, you can opt to complete a formal hearing with the appraisal review board.
IFile/ISettle-This is a system with HCAD in which you can protest your property value online and provide evidence there.
Formal Hearing with the Appraisal Review Board-If you do not like the result of the informal meeting with the appraiser or the IFile/ISettle process, you may take your case the Appraisal Review Board. This is a three member panel of members that are technically independent of the appraisal district. During this meeting, you will meet with the three panel board and appraiser to discuss your evidence. You will need to have FIVE copies of all of your supporting documents for your presentation to the board-three for the panel, one for the HCAD representative, and one for yourself. After you complete your presentation, the district will present its arguments and evidence to the panel. After everyone has spoken, the panel will discuss and make their decision and give you a form with the panel’s recommendation. They allot 15-20 minutes for this, but be prepared to go much, much more quickly.
5. If none of the above suffices, you may be able to appeal to the district court or appeal through binding arbitration. Both have costs involved.
You can find a more detailed documents here at http://hcad.org/assets/uploads/pdf/resources/2017/96-295.pdf and http://hcad.org/assets/uploads/pdf/forms/2018/GTA_IAD_001_Mar_2018.pdf
1. File a protest at www.hcad.org and you will be notified of a date and time for your hearing.
Here is the mail in
2. Obtain a list of the properties that HCAD has used as comparables for your property. Research them on HCAD and take pictures. Find out what these properties have that yours does not and use this to your advantage. The appraisers at HCAD very rarely visit the homes they use as comparables for yours. Many homes have been remodeled without permits and have extensive additions. Take pictures of that home that has had a complete “weekend facelift” and use it to your advantage.
3. Take pictures of all of the negative aspects of your home and anything that needs to be repaired and GET BIDS IN WRITING for how much the repairs will cost. Check your home out for cracks in the driveway, doors, and windows; check AC units, or anything that is a large repair. DO NOT include anything that could be considered “deferred maintenance.” The appraiser will be very irritated if you use an overgrown yard or 10 year old damage that has never been repaired in your analysis. TAKE PICTURES of these items and include them in your evidence. Also, include any “negative issues” that surround your property. For instance, I live across the street from an elementary school. I use this every time I protest my property value and I show a picture of the elementary school from my front door. I also take a picture of what my street looks like during parent pickup. Some other “negative issues” could be busy streets, commercial property nearby, water towers, unsightly power lines, railroad tracks, floodplains, weird location, strange lot, cell towers, sewage plants, and water plants. Use mapping tools on the internet to take an aerial photo of your property and note any “negative issue” that you can find.
4. Enlist the help of a REALTOR® to get a list from the MLS of all the sales of properties from the past year that are like yours in terms of square footage, lot size, and description. Research these homes and take pictures just like you did in Number 2.
5. Use HCAD.org to find properties of your own that are similar to yours in square footage, lot size, and description. Here is a link to a video on how to find comparables on HCAD’s website.
****In addition to finding comparables close in square footage, lot size, and description, you also want to pay attention to the grade adjustment, physical condition, and condition, desirability, and utility. Ideally, you want to find properties that have the same descriptions in these categories. If not, you will have to make a case as to why your property should have a category changed and/or property value adjusted. For instance, let's say you have two homes that have the same square footage, floorplan, and lot size, but one has a grade adjustment of B+ and the other B- (C is considered average). In my neighborhood, this adjustment can equal to 10s of thousands of dollars in value. Present your case to the appraiser showing how the two properties are similar. Make a reasonable offer of the value, perhaps 25-35 percent of the difference, and they may take the adjustment. They likely will not change your grade completely, or give you the full reduction.
6. From these three lists: HCAD Comparables (from Number 2), MLS Sales (Number 4), and the properties that you found (Number 5), chose five (or more) properties that are lower than yours in value but close in square footage, lot size, and description. You will use these to show the appraiser the market value that you feel is reasonable.
7. After completing steps 1-6, prepare a packet with the following:
a. Summary Sheet-This is best done with an Excel document. An example can be found under HCAD Excel Spreadsheet on the Community Resources tab on our website here. You will need to complete the cells with “average value for land per square foot” and “average value for improvement (house) per square foot” for the five (or more) properties that you have.
c. Noticed Value sheet that you received in the mail
d. Plot plan of the properties you are using for your comparables
e. Printed appraisals of the homes you used as your comparables
f. Printed appraisals of the homes HCAD used as your comparables
7. Use all of this documentation to come up with a value that seems reasonable for your property.
8. Prepare two sets of the above documents, one for you and one for the appraiser. Do the following:
a. Go through the packet, house by house, discussing how these properties are like yours. Show the pictures and descriptions.
b. Discuss the spreadsheet and the “average value of land per square foot” and “average value for improvement per square foot.”
c. Explain the calculation of your home’s square footage times the average value per square foot and your home’s land square footage times the average value per square foot.
d. Walk through the list of the repairs, photos, and bids. You can also talk here about all of the “negative issues” that surround your property.
e. Talk about the bottom line value of your property, which is the final total of the price per square foot of the home and land minus the repairs.
f. Walk through the properties that they used to come to your value, and discuss why the properties you used are more in line with your market value.
9. At this point, the appraiser will come up with his/her number. Decide whether you are okay with this number. If so, you are done. If not, you will need to schedule a formal hearing with the ARB. If you chose to go to the ARB, you will already have all of your documentation prepared; you just need to make copies.
1. Be Friendly-Don’t belabor the point. All the appraisers hear all day is people complaining about their taxes being too high. They are not there to listen to you complain about that. They are there to determine market value only. Making negative statements will not get you anywhere.
2. You sometimes don’t have a case if they raised your land value and didn’t increase (or decreased) your improved value, but try anyway.
3. Dress appropriately. Show them respect and don’t show up like you are headed to the gym. Make sure your information with HCAD is correct. A 200 square foot discrepancy could mean 100s of dollars a year in tax savings.
4. Remember that you are protesting the market value of your home, not the appraised value.
5. Remember that you are protesting the value of your home, NOT YOUR TAXES.
6. PREPARE, PREPARE, PREPARE. It is disrespectful and a waste of your time and theirs if you show up unprepared.
8. Practice-Get your presentation down to four minutes or less. Practice in front of a mirror or loved one.
9. Protest EVERY YEAR for the maximum savings. The first year will take the most work, and then subsequent years after you can likely use similar information and use the ISettle process.
10. DO NOT LIE- You are under oath, plus KARMA is a beast. Be prompt, courteous, and confident.
As always, if you need any help whatsoever, please contact me. You can find my YouTube video here.
Ginny Ledwell, Broker, Led Well Realty
Linked In www.linkedin.com/in/ginnyledwell
Phone (281) 635-7181
****The writer makes no warranties regarding the accuracy or usefulness of the information presented above. The writer is not an attorney or CPA. Use of this information is no substitute for professional advice.****