Property Taxes

The Wayne Lohmeyer Property Tax Report: ARE YOU BEING TAXED OUT OF YOUR HOME?

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The right to appear before the Appraisal Review Board (ARB) is the most important remedy available to property owners. ARB members are private citizens appointed for various terms. The ARB's primary duty is to hear and decide disputes between property owners and the Appraisal District. Unless the property is located in more than one District, the ARB decision in each case it hears applies to every taxing unit in the District. This is consistent with centralizing property appraisals and appeals.

ARBs may or may not meet throughout the year on a monthly basis to carry out its duties. Board members are present to conduct hearings on most days throughout the Protest hearings period which normally begin in May and continue until all protests have been resolved. The ARB is funded by the Appraisal District and appointed by its board of directors, but it is a separate governmental body and employees or officials of the Appraisal District or the taxing units it serves may not sit on the ARB. To qualify for service on the ARB, a person must have lived in the Appraisal District for a number of years prior to taking office. As a general rule close relatives can't work as real estate agents or tax appraisers within the District.

The law allows you to protest any action by the Appraisal District or the ARB that applies to you and adversely affects you. If you meet the time deadline, you have a right to have your case heard and decided by the ARB. You also have the right to appeal the ARB's decision to the Courts. However, If you don't protest on time, your rights are very limited. The protest process follows three general rules: (1) Owner files a written protest; (2) Informal meeting with appraiser; and if necessary (3) formal hearing with the ARB. As a general rule you must file your complaint in writing using the official Notice of Protest form that is available from the Appraisal District or the state comptroller's office. Or, in some states, a protest is sufficient if, in writing you identify the property owner, the property that is in the District, and indicate that you are dissatisfied with a decision made by the Appraisal District. If you mail your protest, you normally must have it postmarked by midnight on the due date. If you deliver it in person, you must have it in the office before the office closes for business on the due date. Sometimes, a later deadline may apply. Usually, the notice you get is the final deadline. Some Districts cannot accept protests by email at this time. You must either mail the protest or file it in person. Once the District receives protest, a hearing appointment is scheduled.

The District generally schedules a protest for a hearing appointment. Appointments are scheduled within a few weeks, but depending on when you file your protest, the size of your district, the nature of your concerns, and the value of your property, your protest hearing appointment may take months. At least 15 to 30 days before the scheduled date, the Distrct will send you the date of your appointment. The notice includes a great deal of valuable information you can use in preparing your protest. Hold on to it and make copies for yourself and the Board.

Appraisal Review Board Hearing Procedures:

If you want to file a protest or motion as required by law, you are entitled to an opportunity to appear before Appraisal Review Board to present evidence or argument. Members of the Board who will hear your protest motion are not employees or officers of any county, city, school district, or other political unit that assesses or collects property taxes. They are not part of the Appraisal District. They are County citizens and taxpayers appointed to impartially resolve certain complaints about taxability and valuation of property within the District.

State law empowers the Board to hear and resolve protests only about the following issues concerning your property: valuation; eligibility for exemptions; inclusion of the property on the appraisal records for the District or for a particular taxing unit within the District; whether you are/were the owner; whether a notice required by law was delivered; determination of changes of use of agricultural, open space or timber lands, or other actions by the District or Board that adversely affect you as a property owner. The Board cannot hear or resolve other matters, such as complaints about the amount of your taxes or your ability to pay your taxes.

Procedures Before Your Hearing:

Organize your testimony and documents ahead of time. You must present the original and copies of each document you want the Board to consider. Types of evidences relevant to determination of the value of property includes:

Residential Real Estate:

1. Sale of Subject Property - signed and dated closing settlement statement and fee appraisal.
2. Sales of Comparable Properties - sales of comparable properties should include the following information if available: photographs, property address, sales date/price, grantor/grantee, financing terms/source/confirmed by; or appraisal of subject property with date and reason for sale.
3. Proof of Physical, Functional or Economic Obsolescence - This type of information can be documented in a variety of ways. The best type of documents are usually estimates for repairs from contractors and photographs of physical problems. All documentation should be signed and notarized. This means you must furnish "documented" evidence of your property’s needs.

Commercial Real Estate:

1. Sale of Subject Property - signed and dated closing statement or sales contract with description of property being transferred; photographs of the property; copy of filed warranty deed if transferred in past 2 years; basis of sale (was sale based on actual income and expense data or pro forma income and expense data); complete copy of appraisal.
2. Income Approach - previous year rent roll, rent summary and income statement (typically 3 years of data); documentation of lease offering rates, lease concessions, effective lease rates and current and historical occupancy as of January 1 of the current year.
3. Cost Approach - signed and dated construction contract(s) with detailed description of work to be performed; certified A.I.A. document G702 or equivalent with details. Documentation must reflect all hard and soft cost. IRS records may be required.
4. Market Approach - complete copy of independent fee appraisal; confirmed sales of comparable properties to include photographs, property description, location, land area/building area, year built, date of contract, sales price, financing terms, basis of sale, source/confirmed by.

All documents that you present in the hearing become part of the Board’s permanent records and will not be returned to you.

The tax notice provided to you includes a great deal of valuable information you can use in preparing your Informal Meeting With the Appraiser. It is important that you bring your notice and be on time for your hearing. Your protest could be dismissed if you are not present when the protest is called. Plan to spend hours if not most of the day during peak summer months. First, you'll meet informally with an Appraiser representing the Appraisal District. You and the Appraiser will exchange information and go over your evidence, and the records to see if the issue can be resolved without going to a hearing. An informal meeting is not required by law. However, it can speed things up and can be to your benefit. Most protests are resolved at this informal hearing level. A formal hearing With ARB will then follow If you can't solve your concern with the Appraiser. In most cases this hearing is held as soon as possible on the same day. The ARB is not bound by decisions made by the Appraiser at the informal meeting. ARB formal hearings are generally conducted by three member panels.

Before the date of your hearing, you may inspect all of the data, schedules, formulas, and other information that the District plans to introduce at the hearing to establish any matter at issue. You may get copies of this information from the Appraisal District office.

Neither the property owner nor the District may give any board member information about a protest or motion prior to the hearing. It is important that you be on time for your hearing. Your motion will be dismissed if you fail to (1) appear at your hearing in person, (2) send a sworn affidavit containing evidence to support your protest or motion, or (3) send an authorized representative.

You may present evidence or argument without attending the hearing in person by sending an affidavit executed before a Notary Public (or other authorized public official) stating that you swear or affirm that the information it contains is true and correct. The affidavit should identify you as the property owner, the account number and description of the property that is the subject of the protest or motion, and the date and time of the hearing. For an affidavit to be considered, it must be received by the Board before the time of the hearing.

In some states a property owner may designate another person to represent him for property tax purposes by filing certain forms required by law. In this notice "you" includes property owners and their properly designated agents.

Finally, if you give the appraisal district a written request more than two weeks in advance of your hearing, the district will provide you with access to all of the evidence the appraisal district intends to submit. You can get copies of th evidence documents at cost, and the cost can't exceed a capped amount per residential property. Also, if your protest involves the description of your property or a property split or combination, be sure to bring the deed or legal document supporting your position to the hearing. Be on time and prepared for your appointment. Your case can be dismissed for failure to appear if you are not present when called. You should be ready to present your protest, along with multiple copies of all supporting documents, at the assigned time. The law requires the ARB to keep at least one copy of every document you submit in its files. If you want to use a valuable document or photograph, bring both the original and multiple copies. You can normally use the copies in the hearing, but you'll need to have the original in the event the ARB asks to see it. Stick to the facts of your presentation. The Appraisal Review Board has no control over Appraisal District operations, tax rates for the taxing units, inflation, local politics, your ability to pay taxes, or personal opinions. Be direct, concise, and honest. Be sure that the information and comments you bring before the board are strictly in keeping with matter(s) stated in your notice of protest. Remember you normally have three choices depending on which state you live in: You can appear in person; you can appoint someone else to appear for you; or you can file a notarized affidavit stating your facts and presentation.

If you are unable to come in person, you can appoint someone to come in your place. You must use a special form to appoint an agent. In some Districts you can download this form on the Internet. You can also get a copy of the form from the Appraisal District's office or the State Comptroller's office. The agent may represent you in one or more areas that you designate on the form: to file notices of protest, present evidence before the Appraisal Review Board, to negotiate on any value disputes, to receive notices or tax bills, or to handle any other action. The agent may alternatively represent you for general property tax purposes. Be careful when filling out this form; it affects your legal rights. You may want to contact an Attorney. If you simply want to have a friend or family member appear for you, sometimes there is a simplified version of the form on the back of the Protest form. In some Districts you can also send in your evidence in writing. Your written evidence must be in the form of a sworn affidavit. The affidavit must describe the property and indicate some dissatisfaction with an action by the District or the Appraisal Review Board. It must contain a statement by you stating you swear or affirm it is true and correct. You must sign it in front of a notary. It must get to the Board before your hearing date. Be sure it contains your name, address, property account number, the property description, and the time and date of your hearing.

Procedures During Your Hearing:

A protest or motion hearing is somewhat like - but far less formal than - a simple trial in a court of law. The Board follows certain rules and procedures so that everyone who appears before it has a fair and reasonable opportunity to be heard and so that an impartial determination is made. For example, all hearings must be open to the public and all testimony must be given under oath. Panels of three board members usually hear protests or motions. A majority of the Board will finally determine each protest or motion.

The ARB panel begins the hearing by introducing its motion and you and your witness will be sworn in. You'll be asked to sign and read aloud a statement that you are the owner or agent for property and that your testimony will be true and write down your opinion of the value. Each panel member will sign an affidavits that the member has not discussed anything about your property prior to the hearing. The ARB panel will then ask the District's Appraiser to describe the property. The Appraiser will give a legal and physical description of the property as shown on the District's records. Listen carefully; you'll be asked if you agree with the description and if it needs to be corrected, the ARB chair will ask a District representative to present the District's evidence of value. You may question the Appraiser about the testimony. Next the chair will ask you to present evidence to support your opinion of value. The ARB members may want to question you about your testimony. After your presentation the District will have an opportunity to offer a rebuttal.

The chair will then announce that the hearing is complete, and the panel will confer to reach a decision. The chair will announce a decision and the basis for changing or not changing the value. The panel will give you a copy of a form that states the ARB panel decision. The decision must be approved by the entire membership of the Appraisal Review Board before it is final. During peak hearing season the full board meets to approve decisions every week. In less crowded seasons, the board may meet once a month. Consequently, there may be some delay between your hearing and the time you receive the formal written ARB decision. Also, the full ARB occasionally will not approve a panel decision; in such a case, it normally orders the case to be reheard and you will be notified of a new hearing date. The final decision of the Appraisal Review Board is issued in writing and will be mailed to you by certified mail. This written order directs the chief appraiser to make the appropriate changes to the District's current tax records. If you are dissatisfied with the ARB findings you have the right to appeal its decision to the state dcourt within a number of days of receiving the written order.

The Board’s experience indicates that a few minutes is usually sufficient time for a hearing.

A Hearing Usually Proceeds as Follows:

1. The property is identified as listed in the appraisal records.
2. Any Board member who has a conflict of interest is excused and replaced by another member.
3. The property owner and any witnesses and attorney who accompany the owner are asked to identify themselves.
4. The Board member chairing the hearing swears all witnesses.
5. The Chairman clarifies what properties and what issues will be considered and explains how the hearing will be conducted.
6. The Chairman instructs the representatives of the parties that each must provide the other with a copy of any written material that the party intends to offer as evidence, and the panel considers any objections to the conduct of the hearing or to the proposed evidence.
7. Property owner offers evidence and argument.
8. The District’s representative(s) and witnesses offer the District’s evidence and argument.
9. Board members question the parties and witnesses.
10. The District’s representative(s) questions the owner and his witnesses and closes its argument and explanation.
11. (by directing the questions through the panel chairman) the District’s representative(s) and witnesses and closes his argument and explanation.
12. Board closes the presentation of evidence and argument, and deliberates.
13. If the Board members hearing the protest have enough information, they will determine or recommend a decision to the full Board. If the Board members hearing the protest do not have enough information, they may request or require additional information and may recess the hearing and schedule the date and time that the hearing is to resume.
14. On finally determining the protest, the Board will deliver to the owner by certified mail a notice and copy of its Order.

However, the panel chairman may choose to alter the order of the proceedings.

The Board follows the requirements of the State/Local Property Tax Code and the current edition of Appraisal Review Board Manual published by the State. A copy of Property Taxpayers’ Remedies should have been sent to you. If you don't have one look on the Internet and download one.

Procedures After Your Hearing:

Lawmakers intended the ARBs to serve as a neutral body to resolve disputes between Appraisal Districts and property owners. The ARB's duties under the law are: 1. determine protests initiated by property owners; 2. determine challenges initiated by taxing units; 3. correct clerical errors in the appraisal records and the appraisal rolls; or 4. act on motions to correct appraisal rolls 5. determine whether an exemption or a partial exemption is improperly granted and whether land is improperly granted and after hearing all protests, the ARB approves the appraisal records. Like a court, the Appraisal Review Board only has authority over matters submitted to it. These matters generally concern problems with this year's appraisals protests and challenges, and problems with previous years' appraisals. For more inform on the corrections process, ask for your District's pamphlet on appraisal roll corrections.

Hints for a Successful Protest:

1. Do not contact ARB members outside the hearing.
2. Be on time and prepared for your hearing.
3. Stick to the facts of your presentation.
4. Present a simple and well organized protest.
5. Recognize that the ARB acts as an independent judge.
6. Review publication Tax Payers Rights and Remedies & Responsibilities published by the Comptrollers office before your hearing.
7. Bring copies of your evidence. Most hearings are allotted only a few minutes. Because time is short, plan to stress key facts and figures. It is a good idea to write the key facts and figures and make copies.
8. Values from prior years or the decisions of previous review boards do not bind the current ARB. Each case stands alone. If your protest is well supported by factual data, your chances for success are greater since the Board can quickly and easily understand your arguments.
9. Most hearings deal with the market value of property. Market value is defined by law as: the price at which a property would transfer for cash or its equivalent under prevailing market conditions. Under this definition, a foreclosure or distress sale usually doesn't represent market value.
10. The best evidence you can bring is physical documents. For example, If you bought or sold the property close to the notice date, the closing docs would be best, especially if you can bring a certified copy of your closing statement. Appraisals and sales contracts are also useful. Plats and maps should be obtained. If you believe the condition of your property reduces its value, bring pictures showing un deterioration, estimates of repairs, and any other documents that reflect the physical condition and value of the property.
11. If you haven't recently bought or sold the property and there isn't a problem with its condition or location, your next best evidence will be sales prices of similar properties. The District has grouped properties into "neighborhoods" of properties with similar characteristics. Sales from the same neighborhood are best. You can get a listing of sales from your Realtor or the Internet. Sales of comparable value protests should include such information as: square footage, lot/land size, type of construction, age of the property, and sales from areas/subdivisions with similar characteristics.
12. Generally the Burden of Proof is on you so the key to a successful outcome is to be very organized and well prepared.

After the Appraisal Review Board has heard and decided substantially all protests, it will formally approve the appraisal records for the District. When this is done, the appraisal records become known as the District's appraisal roll for the year. The Chief Appraiser then certifies th appraisal roll to each individual taxing unit within the Appraisal District. This is how the individual taxing units (school districts, the cities, and special districts, i.e. hospital, MUD, rural fire) receive their values. Once they have the values, they finalize their annual budgets for the following year and adopt their individual tax rates. After the tax rate is set, the District multiplies the tax rate by the value shown on the roll, after subtracting all applicable exemptions, to determine how much you owe as a property tax. Properties still awaiting their protest hearing at the time the Appraisal Review Board approves appraisal records are moved into what called the "supplemental" appraisal records. The Appraisal Review Board approves these records after the protest hearing, and the Chief Appraiser then certifies the results to the taxing units on what is referred to as a "supplemental appraisal roll." The process then starts all over for next year.

Appealing to District Courts:

Afetr the ARB rules on your protest, it must send you or your agent a written order by certified mail. If you are dissatisfied with the ARB's decision, you have the right to appeal its decision to the state District Court in your county or parish. You should consult with an attorney to determine if you have a case. Within 45 days of receiving the written order, you must file a petition for review with the District Court. You also are required to make a partial payment of taxes usually the amount of taxes that are not in dispute and they are due before the delinquency date. You may ask the court to excuse you from prepaying your taxes. To do this you must file an oath of "inability to pay" the taxes in question and argue that prepaying the taxes restrains your right to go to court on your protest. The court will hold a hearing and decide the terms or conditions of your payment. At the District Court, you may ask to have your appeal resolved through arbitration or trial depending on which state you live in.

Special thanks to the Tarrant Apprasial District for their help. They are the Taxing District for the Fort Worth side of the Metroplex. For those of you in College Station and Rio Linda that's the Big City 30 miles West of Dallas. And for all of you Yankees back East that's Cowtown and Where The West Begins.

With Best Regards,

Wayne Lohmeyer

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