Recently a reader asked: “How do I protest my taxes?”
El Pasoans are on edge over dramatic increases in property valuations and the looming impact on property taxes.
One point of clarification: I think the reader means how do you protest the El Paso Central Appraisal District’s estimate of your home’s value. Its appraisal impacts how much you owe in property taxes to various taxing entities.
The clock is ticking. You have until May 16 or “30 days from the date on your Notice of Appraised Value” to file a protest.
This protest gets filed with the CAD, and its purpose is to get you a scheduled hearing with the Appraisal Review Board to make your case.
I’ll get more detailed about how to do this, but there is another and easier option: outsource it. There are many experts whom you can hire to fight your appraisal. They may be lawyers, accountants, Realtors, or another expert, agent or consultant who understands the system and knows how to navigate it. I know plenty of people who “have a guy” and turn it over to them whenever there’s a valuation increase or even annually as standard procedure. Consultants charge differently. Some will be fee-based while others will ask for a percentage of what they save you.
Doing it this way will save you time and possibly money in the long run. While you’d cough up some expense now, the reduction sets you up better for future years. Also, many consultants will do this on your behalf every year. They will ensure you don’t pay a penny more in taxes than you have to. They will also appeal your protest if they think the hearing outcome was unreasonable. Chances are most homeowners would be too discouraged or don’t have the time to persevere, much less make this an annual chore.
But if you want to roll up your sleeves, here’s how to do it yourself.
You can file your protest online, in person or by mail. The CAD introduced a new digital filing option at epcad.org to streamline and make the initial request easier. You can also download the traditional Form 50-132 from the same website or visit the CAD office at 5801 Trowbridge to do it all on-site.
That will land you a formal hearing with the Appraisal Review Board made up of community members to review and determine your case.
Before you present to the ARB you will also be offered an informal meeting with a CAD appraiser. You may be able to negotiate and agree on a settlement in this informal setting. If you file through the new e-file system, this process is baked in, and you could come to an agreement through electronic communication without having to set foot in the CAD office. You can also meet with the appraisers one on one to review and talk about your situation.
If you disagree with the appraiser’s offer, you can keep your formal hearing and proceed before the ARB.
Either way, informal meeting or formal ARB review, you will need to identify and build a case with supporting evidence for a valuation amount you think is correct.
The CAD says to always check the following to make sure that their appraisal is based on accurate information and that you have applied all the exemptions available to you. You should look up your property on the CAD website to verify. Make sure they are using the correct square footage for the lot and dwelling and that you have designated the homestead exemption if applicable. Other exemptions include the over 65, surviving spouse of a first responder killed in the line of duty and disabled veteran or surviving spouse of a disabled veteran.
These aren’t subjective, so if any don’t stack up, the valuation correction is straightforward.
You should also request the CAD’s evidence for their valuation to identify disconnects on the property’s worth. If there are issues with the property, show them with photos. If there are major problems, present repair estimates. Provide any evidence of why your property’s value is not in line with their appraisal.
You can also run a comparative market analysis or CMA. This is where you pull the comps in your area to see how you stack up with like properties. CMAs can be problematic because no two properties are the same, so you have to account for that. A Realtor or private appraiser could help you with a legitimate CMA, but you’d probably need to pay for it. You should print out copies of all this documentation when making your case. You can bring it on a thumb drive for them to download, but they cannot pull it off a cellphone.
And finally, you can present your closing statement if the property is a recent purchase. The CAD does not have access to real estate sale information because Texas is a non-disclosure state. But you can reveal this important piece of the equation if you wish.
That’s what I did when purchasing my home in 2014. I knew the CAD’s valuation was grossly inflated. We bought a true fixer-upper that had sat on the market for years. It is my opinion that the value should be what the market is willing to pay, and the price we paid differed from the appraised value. I argued that no one was willing to pay the appraised value so it was incorrect. I was willing to show my sale price.
I opted for the informal meeting. While I presented my financing documents, we still went around the horn over the CMA. The CAD presented comps of very nice homes in my neighborhood. I countered with the others. The appraiser would not agree to my purchase price, but we got close.
I could have rejected her offer and pursued a formal hearing before the ARB. But that was a risk. I worried they might side with the bank appraisal which was higher than the sale price.
I figured we were close enough I should just take the offer and move on.
If I had to do it over, I think I would turn it over to a consultant. First, I spent a fair amount of time on it and maybe settled too early in the process. A consultant would have had a better perspective on the best deal and been happy to appeal if we didn’t get it. And, I’d have them reevaluate and protest every year. I hadn’t realized that I should have kept up with this since the initial major adjustment. It’s something to consider right now.
One point I have heard, however, is that it’s going to be hard to make a case for lower valuations in this crazy real estate market. Even fixer-uppers like mine are selling for far more than anyone imagined. By law it is the CAD’s duty to appraise at market value.
So then we come back to a different protest – getting the taxing entities to lower their tax rates.