Top 3 Common Tax Assessment Misconceptions

Virtually no one likes paying taxes, but even if you don’t like writing that check to your state government, the IRS, or your local tax board, it’s important to understand property taxes, as well as some common misconceptions. Don’t risk paying more than your fair share of property taxes by simply accepting the number that the local tax board expects you to pay for your property.

Your Property Taxes Pay for Many Services

Property taxes are collected to pay for a number of city and county needs like school costs and other social services, and the tax rate is based upon the amount of revenue needed to keep those services funded. Home and business property owners may speak with a personal tax consultant when there is a disagreement over an assessor’s decision.

Tax Assessment Misconception #1: Market value determines taxable property values.

It doesn’t matter what the market says your property is worth or what some website estimates is the value of your home. The tax rate is determined based on available data on property values that isn’t tied to general, public opinion about market conditions and value.

Did You Know? Texas is a non-disclosure state and the price a property owner pays for his property is not public information.

However, if you take out a mortgage on the property, that information is a matter of public record. If a tax assessor doesn’t have access to the actual sales price of your home, he could use the mortgage data to help estimate value.

Remember: It’s important to speak with a property tax expert if you’re interested in appealing the decision of a tax assessor.

The appraisal district office routinely sends out price surveys to property owners to get information on sales prices, but these surveys are voluntary. If there is no mortgage information and no voluntary survey has been filled out, the assessor may look at similar properties in the vicinity of your property to determine its value.

Tax Assessment Misconception #2: Residential property tax is based on a full home inspection.

Actually, the city’s tax assessor doesn’t come into your home to estimate its value. The determination is made from available data (like mortgage information), as well as an inspection of the exterior of the home.

Why is it important to know that the tax assessor doesn’t base property taxes off the interior of the home?

If you ever decide to sell your home or decide that you might want to buy a home that’s on the market, it’s important that you don’t rely upon the tax assessor’s number. During negotiations for the sale of a home, a home appraiser (different from a tax assessor!) will take a tour of the entire home – inside and out – to determine its value.

The reason for the inspection is because a house that looks fantastic on the outside could look really terrible on the inside, or the reverse could also be true. A humble exterior could hide some amazing and modern features inside the home.

Tax Assessment Misconception #3: You can’t change your property taxes.

Receiving an official tax bill in the mail isn’t the end of the story when it comes to property taxes. Texas allows property owners to submit an official property tax appeal when there’s a disagreement. If you’re unsure whether you have a chance at getting property tax relief, it’s important to consult a professional.

Property tax consultants will make sure every “T” is crossed, and every “I” is dotted so you have the best chance of a fair hearing or negotiation with your local tax assessor.