Property taxes are an important source of revenue for our state and local governments, but for many property owners, it can be difficult to pay the amount that is due each year. For owners of rental properties in Austin, Texas this tax burden each year can be substantial.
Fortunately, Texas offers an opportunity to protest your property taxes in order to reduce your tax burden. By protesting your taxes, you may be able to save money while also contributing to the betterment of your community!
Here are the benefits and reasons why you should protest your 2023 property taxes in Austin, Texas!
The primary benefit of protesting your property taxes in Austin, Texas is the potential to get your tax bill lowered! When you file a protest with your county appraisal district, you will have the opportunity to present evidence demonstrating why the value of your property should be reduced. This could include things such as recent sales of similar properties in the area, deferred maintenance or any damage that has occurred to your own property. If the Appraisal Review Board (ARB) agrees with your assessment, they can lower your taxable value accordingly. This can save Austin, Texas property owners hundreds or thousands of dollars each year!
Filing a tax protest in Texas can also help protect you from future increases in property taxes! When the value of a property increases the owner must pay more in taxes, however the tax reductions over the years are cumulative since taxes naturally go up every year, and raising them on a lower valuation is beneficial over raising them over a higher value from the previous year. Protesting your taxes can have a positive effect on your entire neighborhood’s tax bill, so be a friendly neighbor!
Some people wonder if protesting the taxable value of their home will impact their ability to sell the property for top dollar when the time comes. In Texas, the taxable value is not relevant to the market or sale value. When valuing a home for sale or purchase a licensed agent will use recent market data that can differ greatly from taxable values. Most appraisal districts use the mass appraisal to value similar properties without any consideration given to the details that certainly impact a home’s true value since each is unique in more than one way. This blanket appraisal method leaves a lot of room for error in value, and thus the market value is decoupled from the taxable value because there is no way an appraisal district could spend the time to run comparable sales on every property in their taxable jurisdiction.
Filing a tax protest in Texas is relatively easy. Owners can take it upon themselves and simply fill out a Property Tax Protest Form, which can be found on the website of your county’s appraisal district. After submitting the form, you may receive an offer or you will receive a date for an informal hearing where you can present your evidence to a representative of the ARB. It is important to remember that the ARB does not always agree with taxpayers, so it is important to prepare your case thoroughly before the hearing. If a value cannot be agreed upon at the informal hearing the next step is to schedule a formal hearing in front of the full ARB. Again you will present your evidence, and they will make a determination of value. Most protests do not go beyond this stage, however, there are still two further escalations if you don’t agree with the value in the formal hearing. The next step is arbitration, which has a fixed cost, and that is followed by filing a lawsuit to argue the value in court.
Clients and property owners with Stone Oak Property Management have the opportunity to enroll in a partner program that automatically protests the property taxes on their rental properties each and every tax season. This provides our owners with substantially reduced tax burdens each year here in Austin, Texas.
If you are a client of Stone Oak Property Management please don’t hesitate to contact your property manager directly to discuss this process. The best part? You only pay a portion of the savings on your tax bill if the protest is successful! The whole process is done on a contingency basis, so there is no cost to our clients if no tax savings are achieved.
There are numerous benefits to protesting your property taxes in Texas. Not only can you potentially lower your tax bill, but you can also support your neighborhood and reduce the impact of future increases. Filing a tax protest is relatively simple, and it can be well worth the effort in the long run!