Make sure you have filed for all the exemptions for which you qualify
Some of the potention exemptions are:
Homestead Exemption - If you live on the property, you get a discount.
Disability Exemption - If you're disabled, you can qualify for a discount (who's not disabled?).
Disabled Veteran's Exemption - If you're a disabled veteran, or the spouse of a disabled or killed veteran, you can get a discount.
Charitable/Religious Organization Exemption - If you figure out a way to qualify as a charitable organization or religious facility, you don't have to pay taxes. Again, aren't we all a charitable organization (nobody gets a salary in my house); and who's to say we are all not churches? I'm thinking about calling myself a church...how can they prove I'm not? As an Appraiser (private sector), I come across people all the time who hold property as a religious organization and sell it for a ton of profit, without the carry costs of property taxes. ...Clever blokes.
Freeport Exemption - If you're holding property, which is about to be shipped, you can get an exemption.
Protest the physical characteristics of your property
Sometimes, they have the physical characteristics of your property dead wrong...what do they care if they're wrong...the burden of proof is on YOU, right? Sometimes they say you have more square footage, more bathroom, more bedrooms, more rooms, etc. Also, they give you an overall rating, and you need to make sure that your overall rating is not higher than it should be, compared to other properties in your neighborhood. All these characteristics are combined to determine the market value of your property; you need to make sure they are correct.
Protest the value of your property based on (real) Market Value
This is difficult. In the State of Texas, properties are supposed to be appraised by the Appraisal District at 100% of their (real) Market Value. Usually, the Appraisal District will intentionally appraise properties at around 80%-90% of their (real) Market Value, in order to avoid contention. To protest on this basis, you need to find out the sales price of other properties, similar to yours. The more similar the properties are, the better. This is especially easy if you live in a subdivision of tract homes; it's more difficult if you live in a custom home. The other way you could figure this out is to get an appraisal from an Appraiser in the private sector (like me).
Protest the Appraisal District's appraised Market Value of your property based on their "Equal and Uniform" law
The Appraisal District is not supposed to appraise your property at a higher rate than other similar properties. This seems like the easiest way to protest (their) Market Value. Here's the link to their law...
http://www.hcad.org/pdf/EqualAppraisal.pdf
To do this, all you have to do is go online and pull up the tax records of other properties in your neighborhood which are similar to yours. Calculate the value (per square foot) of both the land value and the improvement value; you can argue either or, or both.
Hire a property tax fighting company
There are several companies which will argue your taxes on your behalf. All you have to do is give them some vital information, and they do all the work for you. They usually charge you half of whatever they save you. You don't have to pay them, if they don't save you anything. This is easy and convenient, but I don't like it because you can't be sure that they are actually going to try as hard as they possibly can to get your taxes reduced. They ARE a business.
Their objective is to make the most possible money with the least effort. This means that, if they go to a pre-hearing Hearing, and the Appraisal District rep gives them an offer, which will save you $300 on your taxes, and they've only had to spend a half an hour fighting it, then they're probably going to accept the offer, regardless of whether or not they could get your taxes reduced even more. They just made $150 in a half an hour!
Here are some of the more prominent tax-fighting companies in my area (in any area, I'm sure you could just check the Yellow Pages)...
http://www.poconnor.com/
http://www.novotnycompany.com/
Thursday, October 9, 2008
Tuesday, October 7, 2008
Property Tax Battle...Lost
I lost a major battle against the Harris County Appraisal District today.
When I first bought my house, my house was appraised at $191,852 by the Appraisal District. I received the 2006 protest notice in the middle of 2007. I did not end up protesting the 2006 appraised value because I had never protested taxes before, I had one month to respond, I trusted it was fair, and I ended up letting it go. Approximately one month later, I received a protest notice for 2007. They had increased my Market Value to approximately $210,000.
I decided to look into what everyone else on the street was paying, and I was astonished to find out I was being appraised at a higher value, per square foot, than anyone on my street. I found 3 homes, nearly identical to my home, on my street, which were being appraised at around $150,000 ($60,000 less than mine). I went to the Appraisal District to protest my taxes (which is a whole other story), and I was able to get my appraised value reduced to $154,700. Major victory!...I guess...if you consider paying less unfair, arbitrary taxes (at the point of a gun) a victory.
This year (2008) my appraised Market Value went back up to $210,000, and my Appraised Value increased to $170,000 (they can only increase the Appraised Value 10% per year). So...I went back to the Appraisal District to protest, armed with the appraised values of the same three houses I used last year, which were now appraised at around $155,000. I don't know WHO they know, but their appraised values only increased a few thousand dollars, while mine increased $60,000.
I was also armed with the argument that I should not have to pay more than other people with similar houses. I told them it was an unfair and unequal assessment, according to their own rule for equal and uniform taxation...
I told them I was not arguing the appraised value based on fair market value; I was arguing the appraised value based on equal and uniform taxation. I presented the evidence that the other, identical homes in my neighborhood were being appraised at $155,000, and there should be no reason why my home should be appraised at a higher value than theirs. You would not believe what they told me...
They told me that I had a good point...the other houses WERE being appraised at a much lower rate, and those homes WERE nearly identical to my home. But they told me, if they decreased my appraised value to the same level as theirs (equal and uniform), then other people would want their value reduced also. They told me it would cause a chain reaction, and everyone would end up getting their appraised values reduced.
They also told me, instead of making my appraised value equal and uniform with the lowest appraised values on my street, they would take the average of all the appraised values on my street, and they would give me THAT value, per square foot. I reiterated that equal and uniform meant that I would not be assessed at a higher rate than someone else with a similar property. They ignored me and gave me a receipt for a Market Value of $183,000 and an Appraised Value of $170,000 (the same as it was when I went in). I said, "this is not fair and equal." They gave me a 'we don't care' look, and I had no choice but to take the screwing like a man and leave.
What am I going to do if I don't like what MY appraisal district does to me? Go to another appraisal district? I CAN'T; THEY HAVE A MONOPOLY ON SCREWING ME! They can be as unfair, rude, and irresponsible as they want to be, and I have NO recourse.
I'm now on a personal mission to compile information about the appraisal districts and their unfair practices, which may help other people fight their property taxes. If you have stories, complaints, tips, or tricks, please e-mail them to me, and I'll post them on this blog. Spread the word.
When I first bought my house, my house was appraised at $191,852 by the Appraisal District. I received the 2006 protest notice in the middle of 2007. I did not end up protesting the 2006 appraised value because I had never protested taxes before, I had one month to respond, I trusted it was fair, and I ended up letting it go. Approximately one month later, I received a protest notice for 2007. They had increased my Market Value to approximately $210,000.
I decided to look into what everyone else on the street was paying, and I was astonished to find out I was being appraised at a higher value, per square foot, than anyone on my street. I found 3 homes, nearly identical to my home, on my street, which were being appraised at around $150,000 ($60,000 less than mine). I went to the Appraisal District to protest my taxes (which is a whole other story), and I was able to get my appraised value reduced to $154,700. Major victory!...I guess...if you consider paying less unfair, arbitrary taxes (at the point of a gun) a victory.
This year (2008) my appraised Market Value went back up to $210,000, and my Appraised Value increased to $170,000 (they can only increase the Appraised Value 10% per year). So...I went back to the Appraisal District to protest, armed with the appraised values of the same three houses I used last year, which were now appraised at around $155,000. I don't know WHO they know, but their appraised values only increased a few thousand dollars, while mine increased $60,000.
I was also armed with the argument that I should not have to pay more than other people with similar houses. I told them it was an unfair and unequal assessment, according to their own rule for equal and uniform taxation...
I told them I was not arguing the appraised value based on fair market value; I was arguing the appraised value based on equal and uniform taxation. I presented the evidence that the other, identical homes in my neighborhood were being appraised at $155,000, and there should be no reason why my home should be appraised at a higher value than theirs. You would not believe what they told me...
They told me that I had a good point...the other houses WERE being appraised at a much lower rate, and those homes WERE nearly identical to my home. But they told me, if they decreased my appraised value to the same level as theirs (equal and uniform), then other people would want their value reduced also. They told me it would cause a chain reaction, and everyone would end up getting their appraised values reduced.
They also told me, instead of making my appraised value equal and uniform with the lowest appraised values on my street, they would take the average of all the appraised values on my street, and they would give me THAT value, per square foot. I reiterated that equal and uniform meant that I would not be assessed at a higher rate than someone else with a similar property. They ignored me and gave me a receipt for a Market Value of $183,000 and an Appraised Value of $170,000 (the same as it was when I went in). I said, "this is not fair and equal." They gave me a 'we don't care' look, and I had no choice but to take the screwing like a man and leave.
What am I going to do if I don't like what MY appraisal district does to me? Go to another appraisal district? I CAN'T; THEY HAVE A MONOPOLY ON SCREWING ME! They can be as unfair, rude, and irresponsible as they want to be, and I have NO recourse.
I'm now on a personal mission to compile information about the appraisal districts and their unfair practices, which may help other people fight their property taxes. If you have stories, complaints, tips, or tricks, please e-mail them to me, and I'll post them on this blog. Spread the word.
Lines of Defense for Appraisal Districts
Common tricks Appraisal Districts use to keep you from getting help or reducing your property taxes:
Long hold times on the phone
I waited on hold for 20 minutes yesterday, on an "ARB Hearing Rescheduling Line Only," and when I finally got to talk to somebody, she was angry and not helpful. A free market based business, which values my business would never make me wait 20 minutes on the phone.
Rude Customer Service Reps on the phones and at the appraisal districts
I wonder if they intentionally hire angry, rude, ugly Customer Service Representatives to answer their phones and work at their front desk in an attempt to discourage you from calling or coming in. A free market based business, which values my business, would not allow a rude CSR, with a poor personal appearance, to work for their company.
Long wait times for your scheduled appointments
I was scheduled for an appointment at 8:15 am. I checked in at 8:12 am, and I waited until 8:44 am to be seen. I saw other people waiting in the waiting room since before I arrived, and they were still waiting when I left. There's no way the Appraisal District can be backed up 30 minutes on appointments by 8:15 am, considering they opened at 8:00 am!
THEY miss appointments, no problem...YOU miss appointments, you're S.O.L.
I had an appointment for an ARB Hearing during the second week after Hurricane Ike. I found out (on my own...they didn't tell me) that all hearings were being postponed, even though the Appraisal District HAD electricity on the day of my hearing. They tell you, if YOU miss a hearing, for whatever reason, and you don't call them one day in advance, then you're S.O.L. For some reason, they didn't bother calling ME one day in advance to tell me THEY wouldn't be able to make our appointment.
One central location, rather than several satellite locations
It's a pretty neat trick to cover millions of square miles of home owners but only have ONE (non-centralized) location. This means that, if you want to protest your taxes, or personally handle any other business with the appraisal district, you have to drive, up to 40-50 miles for some people, through heavy traffic (8-5 business hours), in order to get to the appraisal office. If this was a free market based business, which actually valued your patronage & cared about customer satisfaction, they would have a satellite locations every 5 miles or so (like a cable company, cell phone company, or bank).
Online iProtest...An attempt to discourage you or get you to settle
This year, the HCAD introduced its iProtest system, in which loyal subjects of the monarch are encouraged to submit an online protest, instead of showing up in person. They said it was for OUR benefit, it would save us time, and we would be able to save just as much money on our taxes. It turns out this was just another line of defense they figured out they could use to discourage us from protesting our taxes. They responded to most people by telling them they didn't have a valid protest or by telling them they would knock $1,000 off their appraised value (this equates to about $30 tax savings). This made people think, 'I could get $1,000 off right now, or I could risk going down there and not getting anything.' This caused a lot of people to take their offer, thinking they didn't have a valid protest, or thinking $1,000 was the most they would get. The Appraisal District actually told people, 'if you don't accept the iProtest value now, then the offer is revoked, and you may not get as good of an offer if you come to protest in person.'
Pre-hearing Hearing
The Appraisal District tries to get you to waste your time going to their office for a Pre-hearing Hearing. The purpose of the Pre-hearing Hearing is similar to the purpose of iProtest. They let you talk to some ignorant, rude, low-life who tells you that you're wrong and that you don't have a case. This is an attempt to get you to feel like you've lost. Then, they offer you a settlement value (usually a couple thousand dollars off the appraised value), and they hope that you accept it. That way you won't waste any more of their time by asking for a real hearing. You also have to get an appointment for the Pre-hearing Hearing. When you show up on time for your Pre-hearing Hearing, they make you wait 30 minutes to 1 hour past the scheduled time of your hearing, hoping you'll leave, I guess.
Arbitrarily give high appraised values, hoping they will stick
In most cases, the appraisers don't actually figure out the true market value of a house (that would take too long). They throw absurdly high values at your property, and they put the burden of proof on you. They get YOU to do all the work. Also, with an extremely high starting value, when you go to protest your taxes, they can lower your value a little, you'll be happy, and your value will still be higher than it should be. Also, if nobody takes the initiative to argue the exorbitantly high appraised values, then the Appraisal District makes a killing with very little effort. My buddy checked on the appraised values of some houses EXACTLY like his, which were just recently built and sold. We found out the actual sales price of the homes, which was around $210,000. The Appraisal District appraised the houses at around $330,000.
You have other issues?...Take a number and wait two hours
A few years ago, I had to fill out a form and get it 'date stamped.' This meant that I actually had to show up at the Appraisal District and talk to somebody. Nothing could have prepared me for the complete debacle I witnessed that day. You think the DMV is inefficient?...the Appraisal District is the Master Jedi of inefficiency. I was directed to a room which contained about 100+ seats, which means they've probably had long waits before. All 100+ seats were filled, and 30+ people were standing in the hallways. They had a 'take a number' system. I took a number and stood in the hallway. I waited for approximately 2.5 hours to be seen, and when I left, waiting room and hallways were even more packed. That day was not even a historically busy day...just a normal day at the Appraisal District. I thought about starting a new business where I would go to the Appraisal District and take a bunch of numbers every few minutes and sell them to people for one million dollars each.
Why do they use all these tricks?
Because they have a monopoly on stealing money from you. You have no choice other than dealing with the Appraisal District. If they can somehow discourage you from ever showing up at their offices and taking up their time, then it will be much more convenient for them to steal money from you, and they'll save money in labor costs...they won't have to hire as many thieves.
Remember: The burden of proof is on YOU to prove they can't steal as much money as they claim they can steal.
Long hold times on the phone
I waited on hold for 20 minutes yesterday, on an "ARB Hearing Rescheduling Line Only," and when I finally got to talk to somebody, she was angry and not helpful. A free market based business, which values my business would never make me wait 20 minutes on the phone.
Rude Customer Service Reps on the phones and at the appraisal districts
I wonder if they intentionally hire angry, rude, ugly Customer Service Representatives to answer their phones and work at their front desk in an attempt to discourage you from calling or coming in. A free market based business, which values my business, would not allow a rude CSR, with a poor personal appearance, to work for their company.
Long wait times for your scheduled appointments
I was scheduled for an appointment at 8:15 am. I checked in at 8:12 am, and I waited until 8:44 am to be seen. I saw other people waiting in the waiting room since before I arrived, and they were still waiting when I left. There's no way the Appraisal District can be backed up 30 minutes on appointments by 8:15 am, considering they opened at 8:00 am!
THEY miss appointments, no problem...YOU miss appointments, you're S.O.L.
I had an appointment for an ARB Hearing during the second week after Hurricane Ike. I found out (on my own...they didn't tell me) that all hearings were being postponed, even though the Appraisal District HAD electricity on the day of my hearing. They tell you, if YOU miss a hearing, for whatever reason, and you don't call them one day in advance, then you're S.O.L. For some reason, they didn't bother calling ME one day in advance to tell me THEY wouldn't be able to make our appointment.
One central location, rather than several satellite locations
It's a pretty neat trick to cover millions of square miles of home owners but only have ONE (non-centralized) location. This means that, if you want to protest your taxes, or personally handle any other business with the appraisal district, you have to drive, up to 40-50 miles for some people, through heavy traffic (8-5 business hours), in order to get to the appraisal office. If this was a free market based business, which actually valued your patronage & cared about customer satisfaction, they would have a satellite locations every 5 miles or so (like a cable company, cell phone company, or bank).
Online iProtest...An attempt to discourage you or get you to settle
This year, the HCAD introduced its iProtest system, in which loyal subjects of the monarch are encouraged to submit an online protest, instead of showing up in person. They said it was for OUR benefit, it would save us time, and we would be able to save just as much money on our taxes. It turns out this was just another line of defense they figured out they could use to discourage us from protesting our taxes. They responded to most people by telling them they didn't have a valid protest or by telling them they would knock $1,000 off their appraised value (this equates to about $30 tax savings). This made people think, 'I could get $1,000 off right now, or I could risk going down there and not getting anything.' This caused a lot of people to take their offer, thinking they didn't have a valid protest, or thinking $1,000 was the most they would get. The Appraisal District actually told people, 'if you don't accept the iProtest value now, then the offer is revoked, and you may not get as good of an offer if you come to protest in person.'
Pre-hearing Hearing
The Appraisal District tries to get you to waste your time going to their office for a Pre-hearing Hearing. The purpose of the Pre-hearing Hearing is similar to the purpose of iProtest. They let you talk to some ignorant, rude, low-life who tells you that you're wrong and that you don't have a case. This is an attempt to get you to feel like you've lost. Then, they offer you a settlement value (usually a couple thousand dollars off the appraised value), and they hope that you accept it. That way you won't waste any more of their time by asking for a real hearing. You also have to get an appointment for the Pre-hearing Hearing. When you show up on time for your Pre-hearing Hearing, they make you wait 30 minutes to 1 hour past the scheduled time of your hearing, hoping you'll leave, I guess.
Arbitrarily give high appraised values, hoping they will stick
In most cases, the appraisers don't actually figure out the true market value of a house (that would take too long). They throw absurdly high values at your property, and they put the burden of proof on you. They get YOU to do all the work. Also, with an extremely high starting value, when you go to protest your taxes, they can lower your value a little, you'll be happy, and your value will still be higher than it should be. Also, if nobody takes the initiative to argue the exorbitantly high appraised values, then the Appraisal District makes a killing with very little effort. My buddy checked on the appraised values of some houses EXACTLY like his, which were just recently built and sold. We found out the actual sales price of the homes, which was around $210,000. The Appraisal District appraised the houses at around $330,000.
You have other issues?...Take a number and wait two hours
A few years ago, I had to fill out a form and get it 'date stamped.' This meant that I actually had to show up at the Appraisal District and talk to somebody. Nothing could have prepared me for the complete debacle I witnessed that day. You think the DMV is inefficient?...the Appraisal District is the Master Jedi of inefficiency. I was directed to a room which contained about 100+ seats, which means they've probably had long waits before. All 100+ seats were filled, and 30+ people were standing in the hallways. They had a 'take a number' system. I took a number and stood in the hallway. I waited for approximately 2.5 hours to be seen, and when I left, waiting room and hallways were even more packed. That day was not even a historically busy day...just a normal day at the Appraisal District. I thought about starting a new business where I would go to the Appraisal District and take a bunch of numbers every few minutes and sell them to people for one million dollars each.
Why do they use all these tricks?
Because they have a monopoly on stealing money from you. You have no choice other than dealing with the Appraisal District. If they can somehow discourage you from ever showing up at their offices and taking up their time, then it will be much more convenient for them to steal money from you, and they'll save money in labor costs...they won't have to hire as many thieves.
Remember: The burden of proof is on YOU to prove they can't steal as much money as they claim they can steal.
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