What is Equal and Uniform? How is it different from Market Value?

GENERAL OVERVIEW

Did you know that in property tax there are really two values? We all know or at least understand the market value, but there is a second value called the "equal & uniform value." Many of us have used an equal and uniform argument and have not even known it. 

"I am being taxed at $80/SQFT when a building (or house) that is just like mine down the street is valued at $70/SQFT, therefore, I should be valued at $70/SQFT."

We understand intuitively that we should be taxed fairly and this is exactly what equal & uniform is about. It is valuing a property fairly among its peers. This even means that if a property was just purchased for $1 million, but other similar properties are assessed at $500,000, then the assessed value for the property should be $500,000 not $1 million. Put another way, if you are being assessed at a value at or close to 100% of market value and other similar properties are taxed at 50% of market value, you should be taxed at 50% of market value.

Equal & uniform obviously differs from market value in that the equal & uniform value does not factor what a property would sell for. Equal & uniform is strictly a matter of fairness in taxation, whereas market value is a question of accuracy in taxation. Yes, by law, the appraisal district is required to value every property at 100% of market value, but in practice this does not always happen. The Texas Constitution discusses equal and uniform under Article 8 Section 1. First and foremost, taxpayers are granted the right to be taxed equally and uniformly. When one property is valued more accurately (closer to 100% of market value) than its peers, an accurate value then also becomes an unfair value. The lower of the two values (market vs. equal & uniform) is what the property should legally be assessed for.

CONTROVERSY

While equal & uniform is no doubt legally and ethically legitimate in property tax, it is not without some controversy. One side views it as a taxpayer loophole, while the other sees it as a taxpayer protection. When a property sells, the appraisal district wants to do the best they can to value the property accurately. The controversy steams not from valuing a property that recently sold accurately, but rather treating the sold property differently than similar unsold properties. Many times in a rising market sold properties are increased at a rate more aggressively than unsold properties. This creates two distinct levels of appraisal which is a violation of Article 8 Section 1 (a) of the Texas Constitution: Taxation shall be equal and uniform.

Without a doubt, equal & uniform cases are much more difficult to successfully appeal than straight forward market value cases. Many equal & uniform cases cannot be settled informally with the appraisal district and must be resolved through either binding arbitration or litigation. It is because of the nature of the case and the evidence required that we recommend that the public use a tax agent when pursing an equal & uniform case.