This a the cumulative list of all 10 tips provided in an email series we call "10 Ways To Overpay Your Property Taxes." For those that want all 10 tips right now, we provide the full list below.

TIP #1: DON'T APPEAL THE NOTICE VALUE IN MAY

If your appraised value is increased from the previous year, the appraisal district is required by law to send you a notice of appraised value on or before May 1st; however, if your value remains the same or is lowered from the previous year, they are not required to send you a notice. Property owners have until May 31st (if the 31st falls on a weekend, you have until the following Monday) to file an appeal on the appraised value. If you do not file an appeal by the deadline (typically May 31st), then it becomes extremely difficult to file an appeal. There are exceptions to filing after the deadline which can be found here, but we cannot emphasize enough that not filing an appeal in May is the surest way to overpay your property taxes.

TIP #2: ASSUME AT OR CLOSE TO 100% OF MARKET VALUE IS ALSO FAIR

What a property could sell for on the open market or has recently sold for is a good indicator of the Market Value of the property, but in property tax there is a second value: The Equal & Uniform Value. The lower of the Market Value and the Equal & Uniform Value is the correct value for taxing purposes. This means that even if a property was just purchased for $1 million, but similar properties are assessed at $750,000, the correct value to assess the property is $750,000. Does this sound like a loophole? It's actually a tax payer protection guaranteed by the Texas Constitution which we discuss in more detail here. In a nutshell Equal and Uniform says no matter the determined Market Value for a property, taxpayers first and foremost have the right to be taxed fairly, even if that means taxing below the Market Value of a property.

TIP #3: HANDLE YOUR OWN APPEAL

In many cases a property owner can adequately represent themselves without a tax agent, especially when the appraisal district offers an online appeal portal. When do we recommend an owner represent themselves?

There is only a minor to moderate condition issue (i.e. foundation work that would cost less than $20K)
An owner wishes to correct the appraisal record of the physical data that affects the value by less than $20K (i.e. the appraisal district has 10,000 SQFT when there is actually 9,800 SQFT)
An owner is looking for a total reduction of less than $25K
No solid evidence exists to lower the value, but the owner thinks filing an appeal is worth a shot.

For commercial & high end residential properties we almost always recommend using a tax agent like GRCtax. Why?

Properties with higher values need action every year and a proactive approach. They are valued more aggressively than other properties.
We know and have excellent professional relationships with the right people to discuss your specific issues.
We know the methodologies the appraisal district uses whether it be the Cost, Market, or Income Approach.
We are experts in disputing an Equal & Uniform Value (remember from the previous email #2).
We have rock solid processes that ensure your case is not thrown out for administrative reasons (i.e. missing a deadline).

TIP #4: DON'T CONSISTENTLY FILE AN APPEAL EVERY YEAR

Many property owners file an appeal as a reaction to an increase in the appraised value as opposed to filing an appeal every year no matter what. Which strategy wins out over the long run? It should come as no surprise that filing an appeal every year results in a lower tax bill when compared to those that only file when they feel it necessary (think which wheel gets the grease). The determining factor when filing an appeal should not be if your taxes are higher than the year before, but rather to use the available evidence and determine if it can help you reduce your tax bill. New market evidence might exist that could benefit you this year that did not exist in the previous year. Every year stands on its own and you should at least review your assessment annually in order to minimize your property tax bill.

TIP #5: DO NOT FILE AN EXEMPTION ON YOUR PROPERTY

An exemption is a dollar amount or a percentage that you can deduct from the assessed value. The taxable value of a property is the assessed value minus the sum of all the exemptions that apply for the property. The most common exemption is the homestead exemption. Other residential exemptions include an over 65 exemption, disabled person homestead, surviving spouse of a person who received the disability exemption, and a disabled veteran exemption.

Commercial properties and business are also eligible for certain exemptions. A charitable or religious organization that exclusively performs charitable or religious work can be eligible for a full tax exemption. A commercial building that implements air, water, or land pollution controls may be eligible for a Pollution Control Exemption. A business that transports inventory, from raw material all the way to finished product, outside of the state of Texas may be eligible for a Freeport Exemption on the Business Personal Property. Finally, individuals that use a motor vehicle for production of income and for personal activities are eligible to be tax exempt for one vehicle (an example of this is a real estate agent that must drive around to different properties).

TIP #6: DON'T FACTOR THE LEASE-UP OR DEFERRED MAINTENANCE LINE ITEMS INTO THE VALUE OF A MULTI-TENANT BUILDING

The date of valuation for your appraised value is Jan 1st every year. The actual or anticipated vacancy as of Jan. 1st can have a measurable effect on the value for that year. In addition to lost income, tenant make ready and leasing commissions need to be factored in the lease-up calculation.

Deferred maintenance is any ongoing condition issue with the property such as needing roof repairs or a parking lot that is full of pot holes. Be sure and deduct the estimate cost to cure the ongoing maintenance issues that existed on January 1st (even if the issues were subsequently fixed after January 1st). Contractor quotes and pictures are very helpful when using deferred maintenance as a method to lower the value.

TIP #7: ACCEPT/DO NOT CHALLENGE THE DISTRICT'S ASSUMPTIONS IN THE INCOME MODEL

Even if a commercial building is owner occupied only, the appraisal district will likely still use the income approach to value the property just as they do for most commercial buildings. If there is no rental income from the property, where does their assumption of the rental rate come from? For that matter, where do all of their assumptions come from, no matter if the property is owner occupied or an income property? The answer is simple, the appraisal district uses estimates. Sometimes these estimates are backed by market data, and other times when data is not available, the district does the best they can to estimate. This is true for the following factors in their income model:

The lease type (Gross Income, Modified, or NNN),
Rent Rates,
Vacancy,
Expenses, and
Cap Rates

In other words, the appraisal district has to guess A LOT! This leaves openings for the public to present new information such as a lower than expected rent rate or greater expenses to lower the value. Moving the cap rate slightly can have a tremendous effect on the value. Cap rates are decided by market area and property class (A, B, or C). Successfully arguing the building is a class C instead of a class B can decrease the tax bill by thousands or tens of thousands of dollars.

TIP #8: WHEN A GOING CONCERN IS INVOLVED, DON'T SEGREGATE THE BUSINESS INCOME FROM THE REAL ESTATE INCOME

Many times when a business is purchased, one of the largest assets in the transaction is the real estate the business owned. Depending on the nature of the deal, the real estate may or not be valued separately. Be sure and have a separate appraisal performed by an expert for the real estate and not just use an agreed upon price for the real estate between the two parties. This may not reflect a true market value which may be much lower than a price agreed upon in order to purchase the whole business.

TIP #9: DON'T VALUE A PROPERTY AT ITS HIGHEST AND BEST USE

Valuing a property at its highest and best use is to look beyond the current use of the site and to value the property based on the best use that is legally permissible. The most common example of this is to value a property at land value only when the structure does not match the quality or use that is legally permissible (i.e. an 8 Unit Complex that is falling apart when you could build a new 16 Unit Complex and charge higher rent). You also see "tear downs" for residential properties in hot markets especially in areas of transition. A perfectly livable structure may be demolished in order to build a new home that meets the demands of the current market. The appraisal district uses mass appraisal that does not fully account for highest and best use. There will often be a value on the improvement of property to reflect it is a "tear down" when in fact the value should be 0$ or even a negative value (it costs money to demo the structure). As land values increase, so does the strength of the argument that the highest and best use may be to tear down the existing structure.

TIP #10: ONLY WORK YOUR CASE AT THE APPRAISAL REVIEW BOARD

Did you know that you can work your case informally with a district appraiser before you are scheduled for your formal hearing with the Appraisal Review Board (ARB)? Most appraisal districts are set up to work with you informally in an attempt to lighten the workload done at the ARB. The general public should attempt to meet with a district appraiser a week before the scheduled hearing date. Many tax agents can settle their cases informally without having to attend a formal hearing. Agents have a bit of an advantage over the public in the sense that they are usually scheduled with supervisors because they must work dozens of cases in a single day. Agents are also viewed as an overall asset in the process by the appraisal district because they help settle the outstanding appeals much faster and are overall less emotional during the process, making it easier to come to a resolution. Agents also know what evidence the appraisal district looks for when lowering a value.

BONUS TIP: USE GRCTAX!

GRCtax is like no other tax consulting firm. Most firms in the property tax industry were born out of brokerage or a sales background. GRCtax is the property tax division of a well established and respected appraisal firm. This shows in our work product and overall understanding of appraisal systems. What happens when you match technical expertise with a relationship oriented approach? Excellent results. Using GRCtax is the easiest way to ensure you do not overpay your property taxes.