Archive for August, 2011

The local services you provide through your property tax

Published by Research Editor on August 17th, 2011 - in Taxes, The Basics
outline of tree stoplight, police badge, dog, taxes pay for these
There is no state property tax in Texas. Your property tax is a local tax, going straight to the governing bodies near you. Nearly 4,000 local governments in Texas are the ones collecting and using your property tax, including cities, counties, school districts, and special districts.My home, for example, is taxed by my city, of course, but again for the county, the regional water district, the school district, and the college district.

The different districts use the money for their local needs. Streets, fire protection, police departments, schools, colleges–property taxes are the largest single funding source for these community services. But just what are, exactly, the services you are paying for with your property taxes?

Consider just some of the functions and services of the common governments that use your property taxes:

County

  • Restaurant inspections
  • Disease control
  • Water sanitation
  • Courts
  • Jails
  • Sheriff’s office
  • Public buses
  • Elections: managing elections and counting ballots
  • Animal care and control
  • Emergency management
  • Emergency planning services
  • Trails, parks, and open space
  • Wastewater management

City

  • Aviation
  • Local cable channel
  • Animal control
  • Consumer health
  • Garbage and recycling
  • Code compliance
  • Provides equipment servics to other city departments
  • Fire protection
  • Libraries
  • Municipal courts
  • Parks
  • Athletics
  • Community centers
  • Forestry
  • Graffiti abatement
  • Building permits and plans
  • Inspections
  • Neighborhood education
  • Police
  • Public events
  • Streets, lights, signals, markings
  • Parking meters and city-owned parking garages
  • Storm water, including high water warning flashers, drain cleaning, maintaining drainage canals
  • Tap water

School district

  • Elementary education
  • Secondary education
  • School buildings
  • Teachers
  • Supplies
  • Utilities/maintenance
  • Administration
  • School counselors
  • Staff development/training
  • Extracurricular activities
  • Computers and technology
  • Library
  • School buses
  • Nurses
  • Security
  • “Improve the lives of homeless and at-risk families” in the school district, sometimes including free meals during summer vacation for the children of such families.

Community college

  • College education
  • Small business development, including counseling and mentoring
  • Continuing education
  • High school outreach
  • Dual enrollment/early high school
  • Instructors
  • Academic support
  • Student services
  • Scholarships and fellowships
  • Maintenance of property
  • Tuition discounts
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ALL property is taxable…except when it isn’t

Published by Research Editor on August 17th, 2011 - in Taxes, The Basics
motorcycle outlined also text saying ALL property is taxable…except when it isn’t

 

The Property Tax Code states that all property is taxable if it is located in Texas.

Now, before you start wondering how behind you are in taxes because you didn’t pay property tax on your computer or carpet or carbureator, the tax code continues: all property is taxable unless there is an exemption.

Fortunately, there are quite a few exemptions available. Yes, even ones to cover your keyboard.

The exemptions that apply to most of us are:

  • Residence homestead. For the property you live in.
  • Family supplies for home use
  • Tangible personal property
  • Motor vehicle for personal activities or used to produce income

Most of these common exemptions don’t require you to even apply for the exemption–you automatically get it.

So take a deep breath and relax–you don’t have to pay property tax on your dining table. At least, not here in Texas. Other states, we can’t vouch for, though we’ve heard horror stories.

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Dissatisfied with the ARB’s decision? You have options.

Published by Research Editor on August 17th, 2011 - in Protest, Taxes

balance scales with text 'dissatisfied with ARB's decision?'

So you’ve gone through the ARB hearing, presented your evidence, made your case. Eagerly, you awaited the ARB’s decision to arrive by certified mail.

But it was disappointing. Dissatisfying.

Is that it? Since you’ve already gone through the hearing, is this really the final word on it?

No. You have options: a binding arbitration, an appeal to a state district court, or an appeal to the State Office of Administrative Hearings. First consult with an attorney to determine if you have a case.

Binding Arbitration

If your property is worth $1 million or less (or is a residential homestead, regardless of value), and you are disputing the decision on market or appraised value, you can appeal the ARB’s decision through binding arbitration. Disputes on unequal appraisal determinations cannot be appealed in a binding arbitration.

Fill out the form quickly–the deadline is 45 days after you get the ARB’s order in certified mail. Along with the form, pay a deposit of $500 in money order or a cashier’s check, made payable to the Comptroller. If the arbitrator ends up setting the value of your property closer to your opinion of value than the ARB’s, you’ll get $450 back.

Alternatively, you can pay $250 for expedited arbitration–which limits you to one hour of argument. It also limits the appraisal district to one hour.

Once your form is processed, the Comptroller’s office will send you a website to choose an independent arbitrator. You and the appraisal district must agree on who the arbitrator will be. If you cannot agree, the Comptroller’s office will chose for you.

State District Court

File for a petition for review no later than 60 days after the ARB’s order comes to you in certified mail. You may ask to have your appeal resolved through arbitration, by a jury or a judge.

State Office of Administrative Hearings

If your property is worth more than $1 million and is in Bexar, Cameron, El Paso, Harris, Tarrant, or Travis county, you can appeal to the State Office of Administrative Hearings (SOAH) in a special pilot program. The SOAH is limited to 3,000 appeals and runs through 2012.

Fill out the form and submit it to the chief appraiser of your appraisal district by 30 days after the certified mail with the ARB’s decision arrived, along with a $300 filing fee payable to SOAH. “What form should I fill out,” you ask? The chief administrative law judge will prescribe the form.

Don’t Forget the Taxes

No matter what type of appeal you choose, remember that you must pay your taxes before the delinquency date. Usually, you can make a partial payment of taxes–the amount that is not in dispute. For example, if your property is, in your opinion, worth $100,000, but the ARB determined it was worth $200,000, you must pay the property taxes on the $100,000 worth of property before the delinquency date while you pursue arbitration or appeals.

If you are unable to pay the undisputed property taxes, consider a property tax loan.

How to Calculate your Property Taxes

Published by Research Editor on August 17th, 2011 - in Taxes

outline of home and caltulator with text how to calculate your property taxes

1. Find out your tax jurisdictions.

My home, for example, is under the tax jurisdictions of the city, the regional water district, the county, the county’s hospital, the county’s college district, and the school district.Some counties have a handy property data search that lists your property’s tax jurisdictions, tax rates, and exemptions. To find if your county has a property data, search online for “YOUR COUNTY appraisal district property search.” It’s likely to be the second result that appears. Or go straight to the list of Texas Appraisal Districts at Texas CADand choose your county.

2. Find your property market value, exemptions, and tax rates.

These will be online, if available through your appraisal district.

3. Use this chart to calculate your taxes:

City County Water Hospital College School
Market Value
– Exempt value
= Taxable value
x .01
x tax rate/$100 value
= tax amount

Add the final line together to get your total property taxes.

Sample: the WBAP building in Arlington, where Texas Property Tax Loans is located.

City County Hospital College School
Market Value 503,243 503,243 503,243 503,243 503,243
– Exempt value 0 0 0 0 0
= Taxable value 503,243 503,243 503,243 503,243 503,243
x .01 5032.43 5032.43 5032.43 5032.43 5032.43
x tax rate/$100 value .648 .264 .227897 .13767 1.272
= tax amount 3,261.01 1,328.56 1,146.88 694.32 6,401.25

The total property tax for the WBAP building is: $12,832.02 (total of 3,261.01 + 1,328.56 + 1,146.88 + 694.32 + 6,401.25)

If the number for your property is a little overwhelming, consider a property tax loan.

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Protesting Property Taxes, Step 3: The Hearing

Published by Research Editor on August 12th, 2011 - in Protest, Taxes

Each appraisal review board (ARB) has its own procedures, but this is generally how your hearing will go:

Entry

Come prepared. Bring your copies of evidence, including:

  • Pictures of your property
  • Receipts of repairs
  • Sales price documentation
  • Appraisal district records of appraisal and appraisal cards
  • Graphs
  • Diagrams
  • Sworn statements
  • Witness lists with copies of witness-submitted testimony
  • Mathematical calculations
  • Enough copies for everyone present (the board, the appraisal representative, and yourself)

Know what you are going to say. If you have outlines or notecards, bring them.

Be on time.

Be as respectful as you would in a court proceeding.

Sign in and take a seat in the waiting room.

When your name is called, enter the hearing room.

The Hearing

The ARB, sitting at a table facing you, will explain how the process will work.

The appraisal district representative will probably review the basic information on your home, including:

  • Name of owner
  • Address and legal description
  • Year built
  • Size of home and land
  • Amenities
  • Market value

You and the appraisal district representative take an oath to tell the truth.

You exchange documentary evidence with the appraisal district representative and give evidence to the ARB (all those copies you made earlier!).

You usually get to present your evidence and argument first.

  • Be persuasive, not emotional.
  • Use your organized notes, an outline or notecards you may have prepared.
  • Refer to your evidence.
  • Keep it simple. Do not confuse the board or yourself.

The ARB reviews your evidence and asks you questions.

The appraisal district representative may ask you questions.

The representative presents their report of the value of your home.

  • Note any errors or discrepancies you notice.
  • The representative will probably show a list of home sales that were used to determine the market value of your home and explain why these are similar to your neighborhood’s homes.

After the evidence is presented, you may rebut the evidence provided by the appraisal district representative by showing evidence that discredits, explains away, or counters the representative’s evidence.

Closing statements

  • Note the representative’s errors.
  • Re-emphasize your own argument and evidence by summarizing the key points.
  • Indicate the value you think they should place on your home.
  • Thank the ARB for listening to your case.

ARB makes a decision

  • The board evaluates the value of your home based on the evidence presented.
  • The ARB gives you its opinion of your home’s value
  • The board sends you a written order by certified mail.
  • If the hearing was held by a panel of the ARB, the decision is not final until approved by the full ARB.

Burden of Proof

The burden of proof lies with the appraisal district. This means that if they cannot provide more convincing evidence, the ARB must rule in your favor.

Rules and rights

You have several rights in your hearing. You have the right to disprove the appraisal district representative’s evidence, to cross examine witnesses, and to ask questions of the appraisal district representative through the ARB. Likewise, the appraisal district representative has the same rights towards you.

Just like in a courtroom, do not ask questions of the ARB.

When the ARB asks questions, respond directly, but cordially.

Never get into a heated argument.

This article is the third in a series on protesting property taxes. If you are dissatisfied when the ARB’s decision comes through certified mail, read the next article in this series, Dissatisfied with the Decision?

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Protesting Property Taxes, Step 2: Prepare for Your Hearing

Published by Research Editor on August 12th, 2011 - in Protest, Taxes

Preparation is the key to a successful hearing. With preparation, you will have the evidence and organization necessary to make a good case.

Collect information

    1. Understand the hearing procedures, including: how long you will have to present your evidence, how may people are on the review board, and what you can expect at the hearing. The hearing procedures will be sent to you at least 14 days before the hearing.

 

    1. Talk to the appraisal district staff. Ask them questions about anything you’re unsure of or do not understand. Look at the appraisal district’s website, which should have a lot of information for you.

 

    1. From the appraisal district staff, get a copy of the information the appraisal district plans to introduce at the hearing.

 

    1. Go to the appraisal district’s website and get the appraisal card on your property. Check to see it has the right number of bedrooms, bathrooms, and garages. If there are any discrepancies, use them as evidence in your hearing.

 

    1. Check anything in your home that will negatively affect its value. For example, a foundation problem like a cracked slab. Prepare photos, reports, and repair estimates. Include anything that happened before January 1 (the date of your appraisal), including improvements or damage. (Do not include anything that happened after January 1–that will count toward next year’s appraisal.)

 

    1. Measure your home from the outside to ensure it has the same square footage as on the appraisal district’s records.

 

    1. Because home sales are considered the best indication of market value, review the sales the appraisal district used to determine your property’s value. Make a list of the sales, dates of sales, size of the homes, size of the lots, whether a home is on a corner lot, the year the home was built, the location, the zoning, the amenities in the home, etc–anything that adds (or takes away) value to the home. Compare these to your home.

 

    1. Look at your neighborhood as a whole. is there anything that brings down the value of homes, like being too close to the freeway or railroad? Is there anything about your home that makes it not typical of the homes in your neighborhood?
      For example, do the homes the appraisal district used in mass appraisal all have pools or hardwood floors or something else that increases their value? That would overvalue your home if your property does not have those improvements.

 

    1. If there are sales that the appraisal district should not have used in appraising your home’s value, because your property is too different for a comparison, mark them. At the hearing, point out why they should not have used those particular sales.

 

Remember

The point of the hearing is to establish the correct value of your home. The ARB is not an all-knowing entity and does not know every detail about your home or your neighborhood. You know your home and neighborhood far better than the appraisal district can. Bring the evidence that shows your value is correct.

Evidence does not include your personal financial situation. Property taxes can only be based on the value of the home, not how much money you make (or aren’t making).

Organize your information

Prepare wisely for the limited time you will have in the hearing.

Organize your information clearly. Don’t hop from the fire report to the sales data and back to the picture of the cracked foundation. Keep the reports and information on your house together and the sales data together. Listing your information in an outline with categories helps most people.

Consider marking your evidence with exhibit numbers as a form of organization. “Turn to exhibit 1,” you’ll say, and everyone will be looking at the picture of your house after the tornado. It’s much more organized and effective than having everyone flip through unnumbered and disorganized papers until they find the picture you’ve described.

Create counter arguments

Look at the evidence the appraisal district will use and prepare arguments against that data. For example, why the sales data of your neighbors’ homes is not a good comparison to your home.

Practice your presentation

Time yourself to ensure you stay within the time limit. The hearing procedures will tell you how much time you have to present your case. Sometimes it’s 5 minutes, which means you need to be exceedingly organized and concise to present all your information in the limited time.

Make copies

Make enough copies of your evidence (reports, pictures, lists, descriptions, etc.) for each member of the ARB panel (usually 3 people), the appraisal district, and yourself. The exact number of people on the ARB panel is in the hearing procedures.

Congratulate yourself on all your hard work!

This article is the second in a series on protesting property taxes. Read the next article in this series, Protesting, Step 3: The Hearing, for details on how the hearing will proceed.

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Protesting Property Taxes, Step 1: File a Notice of Protest

Published by Research Editor on August 12th, 2011 - in Protest, Taxes

If your property taxes are higher than last year’s, the district will send you a notice of the increase by April 1, if your property is a residential homestead, or May 1 if it is not.

The notice of increased taxes also includes the date and place the appraisal review board (ARB) will begin hearing protests.

Step 1: File a Notice of Protest with the ARB.

This form identifies you, describes the property you’re protesting, the reasons you’re protesting, and the facts that may help resolve your case.

form for protesting property taxes in Texas

Click here to get the form from tx.us, the official site

 

The deadline for filing the notice is midnight of May 31, unless:

  • your notice of appraised value was delivered to you after May 2,
  • the ARB did not send you a notice about the property as required by law, or
  • a few other exceptions, as indicated on the form.

The checkboxes of reasons for protesting include:

  • Value is over market value.
  • Value is unequal compared with other properties.
  • Failure to send required notice.
  • Other.

File this Notice of Protest through your ARB. To find out how, search for “file notice of protest [YOUR] county. The page that comes up will likely have the address to mail the protest to or the website where you can electronically file the protest.

Informal Resolution

Some appraisal district will review your concerns and informally try to resolve your objections. However, file a Notice of Protest before the deadline, even if you expect to resolve your concerns at the informal review. This preserves your right for a formal resolution, should the informal means not work out.

After your protest is filed

If the informal resolution didn’t work out, or didn’t happen, the ARB will notify you 15 days before of the date, time, and place of your protest hearing. The hearings will usually be between May 15 and July 20.

The ARB will also send you a copy of the Property Taxpayer Remedies pamphlet, a copy of ARB procedures, and a statement that you can inspect and get a copy of the information the chief appraiser plans to use at your hearing.

This article is the first in a series on protesting property taxes. To prepare for your hearing, look at our next article, Step 2: Prepare for Your Hearing.

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Exemptions

Published by Research Editor on August 12th, 2011 - in Tax loopholes and exceptions, Taxes

Homestead exemption

Exemptions are one of your 12 rights as a taxpayer. For your principal residence, you have homestead exemptions available:

  • General residence exemption: $15,000 off your property value for school taxes
  • $3,000 exemption if your county collects a special tax for farm-to-market roads or flood control.
  • Age 65 or older: $10,000 exemption
  • Disabled: $10,000
  • Optional percentage exemption: a taxing unit may offer an exemption of up to 20% of home’s value, not less than $5,000
  • Optional 65 or older/disabled exemptions: a taxing unit may offer an additional $3,000 exemption to the $10,000 exemption.
  • Other exemptions

How do I get the $15,000 general residence exemption?

File an Application for Residential Homestead Exemption up to one year after your taxes are due.

Do I reapply each year for the $15,000 general residence exemption?

Nope. Just once, unless the chief appraiser sends you a new application.

What if I move?

If you move or are no longer qualified to receive the general exemption, inform the appraisal district in writing before the next May 1.

What are the “other exemptions” available?

That depends on your appraisal district. Dallas County, for example, offers exemptions for charitable organizations, religions, pollution control properties, goods exported from Texas, and certain motor vehicles. To find out your district’s exemptions, search online for “[Your County] property tax exemptions.”

100% disabled veteran’s exemption

  • Served in the armed forces of the US
  • Classified as disabled by the US Department of Veterans Affairs
  • Received 100% disability compensation from the VA
  • Received either 100% disability rating or classified unemployable by the VA
  • Own and live in your home.

How do I get this exemption?

Apply for the exemption with the appraisal district using this Application for Residential Homestead Exemption. Be sure to check the “100% Disabled Veterans Exemption” box on the second page.

What if I own the house with my spouse?

You are eligible for 100% exemption of your ownership interest. If you own the house equally with your spouse, that amounts to a 50% exemption.

What if I’m a partially disabled veteran?

You get a partial exemption. Check this document from the state for the exact dollar amount.

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Your Lender’s Associations

Published by Research Editor on August 2nd, 2011 - in Loans

When choosing a property tax loan lender, be sure that the lender you choose is ethical and will treat you well.

How do you know?

One way is to look at the organizations and associations the company belongs to. For example, members of the Texas Property Tax Lienholders Association agree to follow a code of conduct and responsibility, which includes:

  • Conduct business honestly, honorably, and with integrity
  • Keep non-public information confidential
  • Respect rights of property owners.
  • Be fair and reasonable to property owners.
  • Never engage in predatory lending practices.

Sounds fantastic, doesn’t it? Should this list appeal to you, the Texas Property Tax Lienholders Association provides a list of member companies that can aid you in your search for  a property tax loan lender.

Remember to always look at your lending company carefully. Even if a company has pledged to follow the code of conduct, enforcement is voluntary.

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Your Right to Uniform Appraisal: the Benefits

Published by Research Editor on August 2nd, 2011 - in Protest, Taxes

You have an undeniable right to uniform appraisal of your property. In other words, your property cannot be valued at a significantly higher rate than a similar property. Additionally, the appraisal of your property should never exceed market value.

If your house is appraised higher than you could sell your house for under normal circumstances (neither buyer nor seller is in a rush or in an extreme situation), then you can protest your property tax rate and get it lowered.

During a protest, the appraisal district must provide evidence that your property was appraised equally. If they can’t, then you win the protest, even if the appraisal district’s value of your property was correct.

For example, let’s say you protest your property taxes, believing your house is worth $90,000 when the appraisers said it was worth $100,000. Even if evidence shows that your house really is worth $100,000, your property must be taxed at a value of $90,000 if the appraisers can’t prove that they used appraisal methods that were equal and uniform.

Equal and uniform appraisal is that important.

The website for the Texas Comptroller of Public Accounts gives another example of the ways you can lower your property taxes if there has been violations of your right to uniform appraisal:

As an example, suppose that both unequal and excessive appraisal protests are brought on the same property. The issues must be determined separately at the protest hearing. The property is appraised at $105,000, and evidence indicates that the market value is $100,000. The ARB should lower the market value to $100,000 because the appraisal is excessive. Next, the unequal appraisal protest must be considered. If the appraisal district’s evidence is not more convincing than the property owner’s evidence and the property owner’s evidence shows that the median level of appraisal is 0.85, the value should be reduced to $85,000. The ARB order should reflect the unequal appraisal protest determination, in addition to the appraised or market value determination.

If your property is not appraised in a uniform manner, protest it now.

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