When you own property in Houston, you will find that ad valorem taxes, or property taxes based on the assessed value of your real estate, are a significant part of your annual expenses. Every year, county appraisal districts in Texas assess the value of properties like homes, land, businesses, etc. Unfortunately, sometimes, the appraisal district’s value is higher than what the owner thinks their property is actually worth on the market.
Texas law mandates that property valuation should reflect its market value as of January 1 of each tax year. However, determining the exact dollar amount can sometimes lead to disagreements with the appraisal district. If you believe your property’s assessed value is not accurate, you have the right to challenge the assessment.
You have a right to a fair assessment
The property taxes you pay directly influence your financial well-being, particularly affecting the net income or profits from your commercial real estate investments. You have the right to ensure you are only paying your fair share of property taxes. You can start by doing the following:
- Review your annual property tax notice for errors
- Understand the appraisal district’s valuation method
- Gather evidence to support your case if you believe there is a discrepancy
If you find an issue with your property’s assessed value, you can file a protest where you will have an opportunity to present your evidence through an ad valorem tax hearing.
Be ready for your ad valorem tax hearing
Essentially, an ad valorem tax hearing is a process where a property owner in Texas can protest or challenge the appraised value that the county appraisal district has assigned to their property for tax purposes. “Ad valorem” is a Latin term that simply means “according to value.”
After hearing your case, the Appraisal Review Board (ARB) will make a decision. The ARB evaluates the evidence from both sides and determines if the appraised value should be left as is or lowered. If they decide the initial assessment is too high after the hearing, the owner’s property tax bill goes down proportionately.
You have a right to dispute excessive appraisal values and potentially reduce your annual tax burden, but you must ensure you effectively present your arguments and evidence. A well-prepared case can make all the difference in the outcome of your tax hearing.