Appealing Property Taxes for Apartment Owners
Below is a MRR and PLR article in category Finance -> subcategory Real Estate.
Appealing Property Taxes for Apartment Owners
Summary
Property taxes are significant expenses for apartment owners, yet many fail to effectively appeal them. Although property taxes can be managed and reduced, some owners see them as an arbitrary government estimate they cannot contest. This misconception aligns with the saying, "You can't fight city hall." However, owners in Texas have ample opportunities to appeal and potentially reduce their tax burden by 25% to 50%.
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Why Some Owners Don’t Appeal
Some owners don’t appeal due to a lack of understanding of the process or the potential for meaningful reductions. A common misconception is that if the market value exceeds the assessed value, an appeal is pointless. However, appeals based on unequal appraisal?"where properties are inconsistently assessed compared to neighbors?"can be successful. Many consultants work on a contingent fee basis, meaning there is no cost unless there is a reduction in taxes.
Overview of the Appeal Process
Steps to Appeal:
1. Request a Notice of Assessed Value
2. File an Appeal
3. Prepare for Hearing
4. Review Records
5. Assess Market and Unequal Appraisal Appeals
6. Set Negotiation Parameters
7. Attend Administrative Hearings
8. Consider Binding Arbitration or Judicial Appeals
9. Pay Taxes Timely
Requesting Notice of Assessed Value
Owners can annually request a notice of assessed value. This ensures a review opportunity and prevents forgetting to protest due to not receiving a notification.
How to File an Appeal
By May 31st, file an appeal citing excessive value or unequal appraisal. Owners can send a protest form, available online, indicating dissatisfaction.
House Bill 201
House Bill 201 allows owners to request appraisal district information used in hearings, providing critical insight for preparation. This low-cost request limits the information the appraisal district can present, benefiting the property owner.
Preparing for the Hearing
Review the appraisal district's information for accuracy. Assess market value by comparing actual income and expenses, or by using comparable sales data. If the property is new, consider unequal appraisal due to cost discrepancies. Provide evidence of deferred maintenance and functional obsolescence for potential deductions.
Unequal Appraisal Analysis
Appeals on unequal appraisal involve ratio studies and comparable properties. Usually, four to ten comparables are adequate. If the appraisal district’s analysis supports a reduction, it aids in the appeal.
Completing Hearing Preparation
Evaluate strengths and weaknesses of each appeal approach. Be aware of ongoing litigation related to disregarded unequal appraisal appeals and seek local expertise if needed.
Negotiating Parameters
Set the highest acceptable assessed value at the informal hearing, as accepting it concludes the appeal.
Administrative Hearing Process
Informal Hearing
- Meet with an appraisal district appraiser.
- Provide property information and negotiate the assessed value.
- If unsatisfied, proceed to the ARB hearing.
ARB Hearing
- Present your case in a concise manner.
- An appraiser will present contrasting evidence.
- Rebut and summarize your points succinctly.
Binding Arbitration or Judicial Appeal
Properties valued at $1 million or less can opt for binding arbitration, where the losing party pays the arbitration fee. Judicial appeals are another avenue, though more costly, often resulting in success.
Conclusion
Annual appeals can substantially reduce property taxes by considering market value and unequal appraisal factors. Understanding the informal, ARB, and judicial appeal processes is crucial for effective tax management.
You can find the original non-AI version of this article here: Appealing Property Taxes for Apartment Owners.
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