As a property owner, there are 3 valuations to keep up with throughout the year; Tax Valuations/Property Tax, Market Valuations (if you sold/listed the property) and Appraised Value (refinancing). I'll focus today's entry on Property Tax Bills.
Everyone should be getting the 2007 valuations on their property, established by their county, which arrive about this time of year. These are due no later than January 31, 2008. You either pay monthly with your home payment OR pay the entire bill around December/January.
Our over all stats show that the Austin Metro market has a shrinking supply of inventory of listings, while average & median prices are rising around $10,000 (http://www.nativeaustinrealestate.com). When the market pricing shows an increase, typically the taxing authority will have an increase as well. However, you always want to double check prices for similar property in a similar area unless your sure of acceptable valuations by county.
If you have a trusted Realtor, ask them for a little information (called a CMA, Comparable Market Analysis for similar size/similar location sales). Because our market is moving upward in pricing, you can bet the taxing authority will push to the max increase of 10% from last year. They can't go over that value of a 10% increase on homesteads, so be sure to double check that number first.
If you want to protest the valuation, there are forms included in your tax bill, and their is a set timeline to send in a protest. You can also hire a company to fight them for you. This can really be worth it, especially for investments and commercial property which do not have the 10% yearly cap.
Tax Protests have two steps; informal & formal. Your best bet for the reduction in property tax costs can come from the informal meeting. If they offer a reduction at the informal hearing, but not as much as you like, consider taking what you can get in that informal hearing. The formal hearing is less leaniant in ANY reductions. Put on your best behavior during these meetings, especially the informal, many property owners enter these meetings ''fired up'', and that won't always be a good start. These guys at the taxing authority have a job to do, and it gets tough this time of year.
For the meetings, have a list of comparable properties selling in the last 12 months supporting your valuation (your trusted Realtor is a great source). Additionally, have pictures developed to share visuals for the repairs or reasons the property would not ''be sold'' for the County Valuation (old roof, cracks in the slab, wood rot, bad paint job, invoices from repairman which were not funded yet).
My last opinion for the informal/formal hearings is to review the tax records of the people in your area to check on their valuations - again using the same size home and same area. Texas and Florida are two states that do not have State Income Tax. However, Texas and Florida do have high property taxes.
It can be painful, no doubt. Just keep in mind that Austin gets high marks for all the parks and outdoor amenities and these are paid for with some property tax dollars. If property taxes really have you down, make it a point of getting to know some parks/trails and go use what you're paying for. Austin does have some fantastic parks and trails!
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2 comments:
Thanks Edward. This is great info.
Paul
I just had an informal hearing today (which didn't lead to any change in my tax appraisal), and wanted to get your advice on whether there's any point in my going to the formal hearing.
The reason for my protest was unequal value relative to comparable properties. I bought a new condo this spring, and I have sales prices for three comparables (three other condos in the same building, with same number of bedrooms, etc. which sold within a few months of when I bought my condo) from the appraisal done for my mortgage. All three of those other condos are assessed at roughly 80% of their sales prices, whereas mine is assessed at roughly 90% of its sale price.
Even though I had all of that data, I got nowhere with the informal hearing. The woman hearing my case said that if my tax appraisal had been more than 100% of the sale price, then she would reduce the tax appraisal, but that she wouldn't do anything in my case because I was already assessed at less than the sale price. In other words, she would do something about a protest based on an assessment above market value, but wouldn't do anything about a protest based on unequal appraisals. She said I would need to go to a formal hearing for that.
Is there any point in going to a formal hearing, or would I just be wasting my time? Based on what you wrote and what I've heard, the formal hearing process is generally tougher. And I'm not a very sympathetic case (I'm pretty young and I just bought an expensive downtown condo), which I expect will hurt me with a board composed of amateurs. I'm willing to try the formal hearing if there's any significant chance of success, but if there isn't, then I'd rather not waste my time. What do you think?
Thanks,
Rob
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