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Can I Get a Taxable Value Below My Recent Cost or Below Market?

April 2, 2017

Yes, it happens more than you would think. Texas’ Constitution prohibits discriminatory practices in assessing taxes. For example, suppose your recently purchased property is assessed at its purchase price but others in the subdivision are not affected.  You may be appraised unequally even at market. (1)

Conversely suppose a recent sale (or sales) in your neighborhood disproportionately affects your property resulting in a higher assessment than your neighbors’.  Or suppose yours is assessed at market while others are assessed at less than market.

One of the least understood arguments for a reduction is Inequality of Appraisal (also sometimes call equal and uniform taxation).  When successful it always results in a value below market.  Inequality is specified in the Tax Code and commonly used for newly acquired commercial properties.  But it is often not used effectively by those protesting residential values even though it applies equally there.

Many agents don’t know how to pursue Inequality because it’s complicated.   At Property Tax Protest we do it successfully more often than not.  And, of course, if there’s no reduction there’s no fee.

There are three criteria for relief under Inequality:

  • the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a reasonable and representative sample of other properties in the appraisal district, or
  • the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a sample of properties in the appraisal district consisting of a reasonable number of other properties similarly situated to, or of the same general kind or character as, the property subject to the appeal; or
  • the appraised value of the property exceeds the median appraised value of a reasonable number of comparable properties appropriately adjusted. 

Two of the three criteria use ratios and one uses value.  All require judgments that must be supported by data; you can’t just make the claim without facts.  These are complex arguments that are over the heads of most homeowners and many agents.  

The law is weighted in your favor; if you prevail on only one of the criteria the decision goes in your favor.  Also, the Texas Supreme Court has ruled that value determined by Inequality prevails over value determined by market (2).  Thus, Inequality results in a taxable value below market.

Why bother?  Because left unprotested, your most recent value can become the floor for subsequent increases.  A successful protest this year raises the district’s bar for next year (3).  We can save you money for years to come by using all the tools available.

(1) “…it is unfair, and constitutionally prohibited, to require one taxpayer to pay a tax based on market values if other taxpayers are paying a rate that is lower than the market value of their properties.” Texas Supreme Court, Weingarten Realty v. Harris County Appraisal District.

(2) “If a conflict exists between taxation at market value and equal and uniform taxation, equal and uniform taxation must prevail.”  Ibid.

(3)    [Effective January 1, 2020] . . . In the next tax year in which the property is appraised (following a successful protest), the chief appraiser may not increase the appraised value of the property unless the increase by the chief appraiser is reasonably supported by clear and convincing evidence when all of the reliable and probative evidence in the record is considered as a whole. . . . The burden of proof is on the chief appraiser to support an increase in the appraised value of property under the circumstances described by this subsection.  Texas Property Tax Code, Section 23.01(e)

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