Archive for July, 2011

Property Tax Basics: the Official Document

Published by Research Editor on July 28th, 2011 - in Taxes, The Basics

official basics of property taxes

Texas Flag
Property Tax Basics is a 33 page document from the Comptroller of Public Accounts. It’s a ver

y useful document and I recommend you flip through it. If you like to have all the basic information in one tangible place, this docu

ment is for you.

The language, as befitting a government document, is occasionally a bit thick, but not as bad as you might expect. It’s not the Tax Code or anything like that.

And the calendar is for 2010, but you can get the 2011 Property Tax Calendar here.

The Property Tax Basics document gives basic information on property taxes, how they work, and how to protest–the same things we cover on this blog, only more official, since the document comes straight from the Texas State Comptroller of Public Accounts, not via your humble FYP LLC Research Editor.

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What is a Rendition and Do I Need to Make One?

Published by Research Editor on July 28th, 2011 - in Taxes

A rendition is a report of your taxable property, sent to your appraisal district. A rendition is a form that identifies and describes your property.

Do I need to submit a rendition?

Are you a business owner? You must report your personal property on a rendition.

Does your property produce income? You must report it on a rendition.

None of the above? You can submit a rendition if you like, but it is not required.

Advantages

If I’m not a business owner and my property does not produce income, are there any advantages to submitting a rendition?

“If you file a rendition, you are in a better position to exercise your rights as a taxpayer,” according to the website of the Comptroller of Public Accounts.

A rendition includes your opinion of your property’s value. When you submit it, your opinion is on record with the district.

If the appraisers then place a higher value on your property than you did, they must send you notice.

How do I submit a rendition?

You can find the rendition forms online. Submit them after January 1 and before April 15.

Renditions are kept confidential.

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What Mass Appraisal Means for You

Published by Research Editor on July 28th, 2011 - in Protest, Taxes

Does your property tax seem too high? In all likelihood, the appraisers didn’t look at your property specifically as they assessed taxes.

In an appraisal method called mass appraisal, the district gathers detailed information on the property, then puts it in a group with similar properties, based on factors like size, use, and type. Computer programs help with categorizing properties.

The appraiser takes a typical property from that group of similar properties and then figures out the value–and thereby the property tax. How your property compares to the typical property in age or location then determines your property’s value.

Whenever you deal with stereotypes and the “typical” anything, there’s always room for unique situations. If your property is overvalued, it may be inadvertently caused by mass appraisal. Consider protesting the overvalue to lower your property taxes. In the meantime, a property tax loan might help you.

Property Appraisal: the Basics

Published by Research Editor on July 28th, 2011 - in Protest, The Basics

Before your county or taxing authority can tax your property, they must know how much your property is worth. Appraisal is the process of determining your property’s value.

You have the right to have your property correctly appraised: your property cannot be taxed significantly differently from similar properties in your area.

But how does this appraisal process work? Should you be watching out for some Man From the Government in a black suit and bowler hat slinking around your backyard?

Three Methods

No, our tax money does not pay for mysterious government agents to visit every single piece of property. Instead, three common methods to value property are:

  • Market Data Comparison
  • Income
  • Cost

Market Data Comparison

This is by far the most common method of appraisal for residential property. The tax authority looks at the selling prices of properties similar to yours. Did your neighbor just sell his home for $100,000? Same with the other people in your neighborhood who recently sold homes? If their homes are about the same as yours, your home will be valued at $100,000.

This gives you a good opportunity if you feel like you’re taxed too much. When protesting your appraisal rate, look at the market value of the properties around you.

To compare your home’s appraisal to others, look for homes similar in location, lot size, improvements, age, condition, access, amenities, views, easements, deed restrictions, and legal burdens affecting a property’s ability to be sold.

Income

For properties that make money–like offices, hotels, or retail stores–the income approach to appraisal looks at how much money an investor would be willing to pay for this property as he or she anticipates future income from the property.

In other words, for an office that generates $1 million in income each year, how much would an investor pay to own that office? That amount is the appraised value.

Cost

Some properties are not sold frequently or–like new buildings–are still under construction and therefore have no data on anticipated income or market comparison. For these, the cost method of appraisal is used. The appraiser calculates how much it would cost to replace this property with one equally useful.

Protesting Appraisal

Over-appraisal (making your property taxes higher) is forbidden by law, so you have the right to protest.

To protest your appraisal, look at our post series on how to protest your property’s value.

The 12 Rights of Property Taxpayers

Published by Research Editor on July 28th, 2011 - in Protest, Taxes, The Basics

 

As a property taxpayer, you have a dozen rights to protect you.

Uniform Taxation

You have the right to equal and uniform taxation.
You do not have to pay more than your fair share of taxes.

Uniform Appraisal

You have the right to ensure that your property is appraised uniformly with similar property in your county.
Your property taxes cannot be significantly higher than a similar property.

Appraisal Techniques

You have the right to have your property appraised according to generally accepted appraisal techniques and other requirements of law.
Accepted appraisal techniques include market value (most common), mass appraisal, cost approach, and income approach.

Exemptions

You have the right to receive exemptions or other tax relief for which you qualify and apply timely.
Exemptions, like a homestead exemption, 65 or older/disabled exemption, veteran’s exemption, or charitable organization exemption, lower–or eliminate–your property taxes.

Notice

You have the right to notice of property value increases, exemption changes and estimated tax amounts.
By the end of May, you will get a notice if the value of your property is higher than last year, if the value is higher than your rendition, or if your property wasn’t on the records last year.

Inspect Appraisal Information

You have the right to inspect non-confidential information used to appraise your property.

Protest

You have the right to protest your property’s value and other appraisal matters to an appraisal review board composed of an impartial group of citizens in your community.

Appeal

You have the right to appeal the appraisal review board’s decision to district court in the county where the property is located.

Fair Treatment

You have the right to fair treatment by the appraisal district, the appraisal review board and the tax assessor-collector.

Voice

You have the right to voice your opinions at open public meetings about proposed tax rates and to ask questions of the governing body responsible for setting tax rates.

Petition

You have the right to petition a local government to call an election to limit a tax increase in certain circumstances.

Free Pamphlet

You have the right to receive a free copy of the pamphlet entitled Property Taxpayer Remedies published by the Texas Comptroller of Public Accounts.

You can access this pamphlet online.

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Video: How to Protest Property Taxes

Published by Research Editor on July 28th, 2011 - in Protest, Taxes

If you are not satisfied with your property taxes, you can protest them. The state has prepared a slideshow to walk you through the process. The 24 slides are searchable, and the notes section has the narrator’s words written out.

The slides are titled:

  1. Slide 1 (introduction)
  2. Notice of Appraised Value
  3. What do You do Now?
  4. The ARB
  5. What Can You Protest?
  6. Filing a Protest
  7. What to Expect?
  8. What to Expect? (cont.)
  9. Preparing for the ARB Hearing
  10. The Hearing–What to Expect
  11. Protest Hearing Rules
  12. Prepare Your Evidence
  13. Value Evidence
  14. Value Evidence (cont.)
  15. Presentation of Evidence
  16. Presentation of Evidence (cont.)
  17. Be Persuasive, Not Emotional
  18. Be Persuasive, Not Emotional (cont.)
  19. Burden of Proof
  20. Closing or Rebuttal
  21. ARB Reaches a Decision
  22. What Now?
  23. Evidence Checklist
  24. Conclusion

What further questions do you have about protesting property taxes? We’ll cover protesting property taxes more in an upcoming article series.

Understanding Property Taxes in 3 Easy Steps

Published by Research Editor on July 28th, 2011 - in Loans, Taxes, The Basics

What are property taxes?

Local governments are funded by property taxes, which pay for everything from schools and streets to police and fire departments. Since we don’t have income taxes in Texas (yay!), sales tax and property tax are what funds our governing bodies.

Property tax is a tax on the value on things you own, especially land. It’s a local tax: local officials decide how valuable your property is, the local government sets the tax rates, and it’s up to the local authorities to collect on the taxes.

There are different ways of deciding how valuable your property is, but most often the local officials decide based on the current market value of similar properties.

What are property tax loans?

A lien is attached to your property each year until you pay your property tax. This means if you don’t pay your taxes, the government can foreclose on your property. Makes paying your taxes pretty important.

But, of course, life happens and sometimes a person is unable to pay their taxes for the current year. A property tax loan is a loan that pays your complete tax obligation, including interest, penalties, costs, and fees.

Property tax loans cover any type of taxable real estate: residential, commercial, investment property, undeveloped land, and developed land.

In addition to paying current taxes, a property tax loan can pay off delinquent taxes and the associated costs and fees.

What about me?

Do I need a property tax loan? Should I apply for one?

If you have delinquent taxes–or if the threat of delinquency is looming over you this year–very seriously consider getting a tax loan to avoid foreclosure, lawsuit, and other penalties that stack up quickly.

Texas Property Tax Loans will serve your needs extremely well, should you need a property tax loan.

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Avoid These 3 Dire Consequences of Delinquent Property Taxes

Published by Research Editor on July 25th, 2011 - in Tax Penalties, Taxes

With high property taxes and a wobbly economy, delinquency in property taxes–or a high risk of delinquency–is becoming more common. Ignoring the bills won’t make the problem go away; in fact, it only makes it worse. Serious consequences of not paying property taxes include:

1. Enormous penalties

The more you delay, the more you pay. You can pay up to 38% in fees and penalties if your property taxes are delinquent. For $10,000 in taxes, adding on fees and penalties means you could end up paying $13,800. That’s almost $4,000 of unnecessarily wasted money.

2. Lawsuit

Any time after your taxes are delinquent, the Texas Tax Code states that you can be sued by your taxing unit. If the suit is successful, you get to pay all the court fees on top of your property taxes, fees, and penalties.

3. Foreclosure

Not paying property taxes gives the government power to take away your property in foreclosure. According to the Texas Tax Code, “On January 1 of each year, a tax lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed for the year on the property.”

Is all this doom and gloom necessary? Most definitely not! Getting a property tax loan eliminates these consequences–no more wasted money on fees and penalties, no threat of lawsuit from your tax collector, and no worries about foreclosure from your tax unit–and allows you to pay your property taxes in the most convenient way possible.

If your taxes are delinquent–or close to it–consider a property tax loan to avoid these dire consequences.

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