Understanding Property Taxes

Property taxes can be a significant expense for homeowners, but many people are unaware that they can negotiate their taxes. In Texas, 53% of homeowners don’t know they can protest their home’s property tax evaluation. This means that if the local tax office over-appraises a home, the homeowner can argue for a lower value and potentially save money on their taxes.

How Property Taxes Work

Homeowners are taxed on the assessed market value of their home, which is determined by the local tax office. The appraisal reflects the value of the home on January 1 of each tax year. In Harris County, the appraisal is made by the Harris County Appraisal District (HCAD), and any disputes are heard by the Appraisal Review Board (ARB).

The Protest Process

To protest a property tax evaluation, homeowners must submit a "protest" with their proposed market value of their home by the deadline, which is May 15 in Texas. This is just the first step, and homeowners will later need to present evidence to support their claim in an informal meeting, hearing, or by affidavit.

What Homeowners Don’t Know

Many homeowners are not aware that they can protest their property taxes because they may not have been informed by their realtor or may not have understood the process. The most official way to find out about the protest process is by reading the mail from the county in detail, including the Notice of Appraised Value and the Property Owner’s Notice of Protest form.

Finding Out About the Protest Process

Homeowners can search for their notice online if they did not receive it in the mail. Missing the deadline can add extra steps to the process, but it’s not impossible to fix mistakes. According to Ownwell, a service that helps homeowners protest their property taxes, more than half of Texas homeowners were "shocked" at their last property tax bill, and many had not budgeted for the expense.

Hiring a Service to Help

Services like Ownwell can help homeowners navigate the protest process and potentially save them money. These services often work on a contingency fee, meaning they only get paid if they successfully reduce the homeowner’s taxes. Ownwell claims an 86% success rate, while other services like Tax Cutter and Gill, Denson & Company also have high success rates.

DIY Protests

Homeowners can also choose to protest their property taxes on their own. This requires diligent research and attention to timelines and details. Homeowners can find information online, including data on comparable properties, to support their claim. However, this can be a time-consuming and overwhelming process, especially for those who are not familiar with the process.

Why First-Time Homebuyers Have an Advantage

First-time homebuyers may have an advantage when it comes to protesting their property taxes, especially if they closed on their house toward the end of the year. The first year of homeownership is often the most straightforward, as the homeowner has hard evidence of the market value of their home. The closer the house was sold to January 1, the less time the surrounding land had to appreciate in value, making it easier to argue for a lower appraisal.

Conclusion

Protesting property taxes can be a complex process, but it’s an important step in saving homeowners money. By understanding the process and seeking help if needed, homeowners can potentially reduce their tax burden. Whether using a service or going it alone, the benefits of protesting property taxes usually far outweigh the effort. By learning about the process now, homeowners can make next year’s tax season easier and potentially save thousands of dollars.