Property Taxes: The Denton Central Appraisal District and The Denton Appraisal Review Board

December 19, 2020

Denton County CAD Overview

The Denton Central Appraisal District is responsible for appraising all real and personal property throughout Denton County on behalf of the taxing units that impose property taxes in the county. The taxing authorities use the appraisal district’s valuations to establish tax rates sufficient to fund their operations.  The appraisal district handles matters concerning property values, protests, and exemptions; it does not establish tax rates or the amounts that will be levied against your property.

The mission of the Denton Central Appraisal District is to appraise property for taxation at 100% of fair market value and to adjudicate taxpayers’ requests for exemptions which reduce their tax burdens. In 2019 the Denton County CAD was responsible for $126 billion in valuations.

Tax Exemptions

Homestead is the most common exemption sought by property owners in Denton County; it accounted for $58 billion (46%) of the 2019 total.  The most significant benefit of the homestead exemption is that it limits the amount by which the appraisal district may increase a property’s market value to 10% per annum since the most recent appraisal.  Thus, the homestead exemption helps the homeowner avoid large tax increases in a rising market.  Note however that the value of capital improvements such as a new kitchen or an expansion is not subject to the homestead cap and the increase can be more than 10% if the most recent appraisal was more than one year ago. The homestead exemption also qualifies the property as exempt from creditors other than recorded mortgagees. This is a modern day interpretation of the Texas Constitution which exempted from creditors’ claims the debtor’s “horse and home.”

To qualify for the homestead exemption the taxpayer must occupy the property as of January 1 of the current and any subsequent years.  Many appraisal districts compare the taxpayer’s mail address of record with the property address; if they differ the district may require evidence of occupancy to support the exemption.

Appraisal Techniques

The appraisal district values its properties through Mass Appraisal techniques which evaluate properties in large batches rather than individually.  Mass appraisal is an opinion and estimate of value based upon the integrity and competence of the appraiser using systematic and logical analysis of data available. Thus, the right of the individual owner to protest each property’s value separately is essential to “fair and equal taxation” as mandated by the Texas Constitution.

If mass appraisal is used the Texas Property Tax Code (Section 23.01) requires that appraisal districts comply with the Uniform Standards of Professional Appraisal Practice (USPAP) and that individual characteristics that affect a property's market value must be evaluated in determining the property's market value.  This latter requirement is the basis for an individual taxpayer’s protest, namely that individual characteristics of the property were not sufficiently considered.  It is a powerful argument for a reduction if the owner can demonstrate such characteristics.  They may include Condition, Age, Effective Age, Neighborhood, Obsolescence (both economic and functional) and other factors, all of which are considered by Property Tax Protest when preparing it client’s case for presentation to the Appraisal Review Board.

By contrast Fee appraisal is defined as an appraisal of properties one at a time for pay.  The Appraisal Review Board will defer to an owner who offers a recent fee appraisal of the property valued lower than the district’s proposed or Notice Value. Similarly, it will accept a recent sale at a lower value if the owner submits a Settlement Statement.  However, if the recent sale was at a value higher than proposed by the district the Appraisal Review Board will likely request the Settlement Statements and if none is delivered it will likely sustain the district’s proposed value.  The district will also likely note the owner’s refusal and consider it when valuing the property in the subsequent year.

In 2020 Denton County’s housing market values increased marginally over the previous year.  Thus, homeowners would be well advised to seek professional assistance before filing a protest.

Towns Serviced by The Denton Central Appraisal District

●     Argyle
●     Aubrey
●     Bartonville
●     Portions of Carrollton
●     Copper Canyon
●     Corinth
●     Corral City
●     Cross Roads
●     Portions of Dallas
●     Denton
●     DISH
●     Double Oak
●     Flower Mound
●     Portions of Fort Worth and Frisco
●     Hackberry
●     Haslet
●     Hebron
●     Hickory Creek
●     Highland Village
●     Justin,
●     Krugerville
●     Krum
●     Lake Dallas
●     Lakewood Village
●     Lewisville
●     Lincoln Park
●     Little Elm
●     Marshall Creek
●     Northlake
●     Oak Point
●     Pilot Point
●     Portions of Plano
●     Ponder
●     Roanoke
●     Sanger
●     Shady Shores
●     Southlake
●     The Colony
●     Trophy Club
●     Portions of Westlake.

The Property Tax Calendar in Denton County

●     April 1: Denton County CAD publishes current year valuations on its website and notifies owners whose property value it proposes to increase from the prior year.  Owners whose values are proposed to increase also receive a mailed notice.  Owners whose value is not increased may receive no mailed notice; however, the unchanged valuation will be apparent on the appraisal district’s website.

●     April 30th : Homeowners’ protests of their Notice Value are due by this date or by thirty days after receipt of their mailed notice, whichever occurs later.

○     Protests must be made in writing.  Owners can use the protest form available on the appraisal district’s website or they can mail their protest in letter form.  

○     Protests can be made based on Value Above Market (comparable sales) or Inequality of Appraisal (comparable assessments).  A successful protest under Inequality of Appraisal will result in a value below market.

●     July 25th : The chief appraiser must complete the valuation process for at least 95% of the values in the district and will submit a certified roll of values for all properties to the taxing units along with approved exemptions.

●     September 30th:  By this date each taxing jurisdiction will have set a tax rate which, when applied to the aggregate values established by the appraisal district, will fund that jurisdiction’s budget for the coming year.  The tax rate set by the taxing jurisdiction will establish the amount of tax levied against your property.

●     October:  The Denton County tax assessor sends out tax bills.

Paying Your Property Tax

Payment of taxes is due by January 31 of the following year.  However, many owners pay by December 31 to obtain a deduction on their current year federal income taxes. Failure to pay property taxes when due will result in substantial penalties (starting February 1 at 15% of the amount due) and interest which will continue to accrue until full payment is made.  There is usually no compromise available to delinquent taxpayers. Taxes due constitute a lien against your property and can, in rare instances, lead to foreclosure and loss of ownership.

If you have the Over 65 exemption or theDisabled exemption, then you may pay one quarter of your total tax by January 31 and one quarter each on March 31st, May 31st and July31st without charge for interest or penalties.

If you have the Over 65 exemption you may also defer payment of property taxes entirely until the property changes ownership.  However, deferred taxes accrue interest at 8% per annum.  To avoid cumulative charges against the property it is advisable to protest unreasonable current year value increases since a successful protest will reduce the amount ultimately due when the property changes ownership.

Denton County CAD Appraisal vs. Taxation

Denton CAD Appraisal

There are two separate values attributable to your property by the Denton Central Appraisal District.  

·      Market Value is the value at which the property would sell between a buyer and a seller both knowledgeable about the property and its market and under no duress to purchase or sell.  The market value is the only value you are entitled to protest to the Denton Appraisal Review Board. In most cases a reduction in your Market Value will result in a reduction in your taxable value.

·      Assessed Value (“CappedValue) is the lower value resulting from various other factors unique to the appraisal district such as exemptions or limitations on taxable value increases for homesteaded properties.  Your taxes will be calculated based on Assessed Value. Assessed Value is derived from Market Value.  

Comparable sales are the gold standard when arguing your case for Value Over Market before the Denton Appraisal Review Board. Any comparable sales are better than none but a Comparative Market Analysis (CMA) from Multiple Listing Service (MLS) usually won’t get you the value you deserve because the criteria that the appraisal district and the Appraisal Review Board use include many that are not recognized by MLS; these include Neighborhood as defined by the appraisal district, Class, Effective Age and Condition.  So, while your Realtor may be willing to assist you with sales comparables or other evidence, that will rarely be enough to prevail at the ARB.

Tax Collection in Denton County

While appraisals are performed by the Central Appraisal District (CAD), tax rates are set individually by the following bodies:

●     City
●     County
●     School district

The Property Tax Appeal and Hearing Process

Protesting your taxes is the most direct way to resolve any disputes or disagreements that you have with the valuation of your property in Denton County.  Your right to protest is enshrined in the Texas Constitution.  It is the modern-day equivalent of the argument, “No taxation without representation” which motivated the thirteen colonies to revolt against English rule.  

How to Protest your Denton County Property Tax

You can begin the protest process when you receive your Notice of Appraised Value in April.  If you do not protest while others do and they obtain reductions in their property taxes one result is that you will pay more to make up for their savings.  The tax rate set by the taxing jurisdictions will need to increase to offset the aggregate reductions granted to successful protesters.

The protest process is complex.  Many homeowners neglect to use all the relevant grounds for appeal to the Appraisal Review Board.  For homeowners these include not only Value Above Market (comparable sales) but also Inequality of Appraisal (comparable assessments), sometimes referred to as the Equity argument.  

The Texas Supreme Court has ruled that Inequality trumps Value Above Market; Inequality is determined after Value Above Market is determined.  This means that Inequality can result in a further reduction below market. In fact, every successful Inequality argument will result, by definition, in a value below market. Therefore, regardless of whether you believe your homesteaded property is fairly valued by comparable sales you should protest under Inequality incase you are unequally assessed in relation to other properties of similar kind or character.

Property Tax Protest will take care of the entire protest process by doing the following:

●     File a protest with the Denton County Appraisal District using all the grounds for appeal available to you.

●     Present arguments for your fair market value to the appraisal district and, as necessary, to the Denton Appraisal Review Board.

●     Present arguments for Inequality of Appraisal as it applies to your property. The Inequality argument is complex; many consultants don’t know how to present it effectively.

●     Make sure you pay only your fair share of property taxes, not more.

●     Continue the process automatically each year until you cancel the service so that you know you are protected against unreasonable increases in your property taxes.  It’s like an insurance policy with no advance premium.

●     Charge you only One Percent (1%)of the reduction obtained in your market value; if there’s no reduction there’s no fee.

Options After the Appraisal Review Board Hearing

If you are not satisfied with the result of the Appraisal Review Board hearing you have further options with which Property Tax Protest can assist you.  You can:

●     Request binding arbitration (an arbitration that appeals the Appraisal Review Board’s decision).  Binding arbitration requires a deposit (up to $500 for most homeowners) which is returned to the owner if the arbitrator awards a market value closer to the owner’s request than to the Board’s value.  

●     Property Tax Protest will share the risk of binding arbitration with you. If the arbitrator’s award results in less savings than your deposit, Property Tax Protest will pay you half difference.  Clearly, Property Tax Protest will not take a binding arbitration case unless it believes you can win.

●     Filing a judicial appeal.  This is usually not cost effective for homeowners. 

Expert Opinions

Let Property Tax Protest Handle Your Protest.  Pay Only Your Fair Share, Not More. You can count on Property Tax Protest to get you the market value you deserve.

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