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Living Below Your Means
How I Reduced My Property Taxes by $700

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By ChrisBuehler
July 22, 2003

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Each year in Texas, the county appraisal district will estimate the "market value" of your property and house on January 1 of the current year and this value is used for property tax purposes.

Since I live in Harris County, the Harris County Appraisal District (HCAD) decided that my home and land increased a lot in value while those belonging to my neighbors did not. Note that my neighbors own similar homes and lots.

So I decided to protest the "market value" determined by HCAD. Fortunately, this issue was addressed in an earlier post that provided a nice starting point:

The first thing was to return the appropriate form by the deadline, May 30. HCAD would then schedule a hearing for me before the Appraisal Review Board. My hearing was scheduled for Wednesday, July 16 at 1:00 pm.

In the meantime, I had to determine the "market value" of my home and show concrete evidence why the HCAD value was too high. Fortunately, the appraisal district has lots of data that they will share with the public; some of this data is online. Unfortunately, the really good data was only available at their office using their computers. So, I spent an hour one morning looking up sales data for homes in my neighborhood and printing out the results (HCAD charges $0.10 per page). That evening I reviewed the data on a lot of different homes and developed a strategy for my analysis. I needed to focus on sales of comparable homes. I used the following criteria:

1. Homes sold between October 2002 and March 2003.
2. Homes sold in my immediate neighborhood.
3. Homes roughly the same age (5 to 10 years old). Note, my home was built in 1995.
4. Homes with approximately the same size living area (within 6%).
5. Homes with about the same size lot (within 10%).
6. Homes with the same number of bathrooms (2 full and 1 half).

I noticed from the data that newer homes and particularly those with more bathrooms commanded much higher sales prices. This is why I used the bathroom criteria.

Four homes fit matched my criteria. Using the sales price and living area information available from HCAD, I calculated an average sales price per square foot. Multiplying this value by the living area for my home yielded my estimate of "market value." I used the HCAD "market value" on my neighbors home (same age, same builder, identical floor plan and lot) as a sanity check. My calculation turned out to be within 1% of their value. For some reason, HCAD had reduced their market value while raising mine. (On a side note, this was a little less than what I had paid for my house in April 2002.)

Next, I prepared a PowerPoint presentation containing the relevant information about my home and the comparable homes, including photographs of all the homes, as well as my neighbor's home.

My hearing began with an informal meeting with one of the district's appraisers. We discussed his data and reasoning for their value and then I showed him my analysis. He seemed to agree with me but indicated that because of "his guidelines" he could not reduce the market value of my home to the value I had calculated.

So it was off to see the three person Appraisal Review Board. This session started with introductions and notice that we were "under oath." Then the HCAD representative presented a description of my home and why their "market value" was correct. Then I had 15 minutes to present my analysis. The board followed up with a few questions. After which the HCAD representative admitted that some mistakes had likely been made in determination of the market value for my home. She recommended the value be reduced to what I had paid in April 2002. This was about 75% of the reduction I had requested, but the board agreed with her.

So, what did I learn from all of this:

1. You can protest the appraisal district's analysis of market value and have the value reduced substantially. I will save $700 as a result.
2. You need solid and convincing evidence. Using the appraisal district's own data works best as the board will not recognize information provided from a realtor.
3. Pictures are worth a thousand words!

I spent about 20 to 30 hours working on this but felt I was prepared. One of the board members remarked to me after the hearing that it appeared that I had put a lot of work into my analysis and presentation. The process itself consumed most of the afternoon, but I had taken the day off. I spent the morning printing, copying, and binding my presentation since I was required to produce a copy for each of the three board members and the HCAD representative.

Anyway, I thought this might be helpful to some other folks.

Chris


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