Many homeowners want to know how to protest property taxes. Here’s my take:
Basic Strategy of How to Protest Property Taxes
1) Pick a subset of the county’s comps and adjust it to reality.
2) Discredit the county comps by showing that X and Y houses don’t belong, so their analysis is bad.
3) Use a market adjustment factor as a “neutral” value that aligns closely with your valuation. If the market in Austin went down 5% according to Bloomberg/Zillow/whatever site, then your home’s value is (1-5% = 95% of last year’s value according to this metric. Which hopefully lines up to your value. To get a better result, adjust the market to be your neighborhood/local municipality.
The combined effect of doing the above makes it so: 1) You have a case that is objectively more adjusted to reality (of course you MUST include pictures so the board can see what you see!), 2) the county’s case is a computer program that doesn’t work right, 3) other market watchers’ professional opinions agree with yours.
It’s hard for an appraiser to beat this combo – they would have to spend a LOT of time. Especially if you are using their comps (comparable houses) – if they show 10, pick the 3 most similar to yours and adjust their valuations to reality. Out of the 10, 3-4 will be comparable, 3-4 will be unknown with no pictures of the interior, and 2-3 will be ridiculous. If you go through each property, you can classify it as one of these buckets.
The Trick
You take the comparables and plug them in to your analysis. Then you take the non-comparable, ridiculous ones and show why they are a bad match for your house. The county can’t challenge the houses – because THEY picked those houses, so discrediting you means discrediting themselves.
This makes it so that the county has to spend SERIOUS effort to beat you – and they don’t have the time if they’re fighting 30 protests a day!
Using this strategy (and a combination of other factors, including the price I actually paid, and luck!) – I secured a $200K reduction from what the county wanted to charge me ($350K valuation vs $550K), so I do think this process works. But it was so time consuming, I developed my own $49 program that you can use to speed the process. I cut my time spent from 80-100 hours combined for adjacent properties to just 2-3 hours this year. And the analysis and comparison charts are better.
Hopefully, this article helped you learn how to protest property taxes. In another article we’ll explore the edge case: what if the county has 10 comparables that are ALL overvalued?
