Property Tax Assessments in Year One
Monday, July 9th, 2007 at 11:50 pm 
By Ryan BrownToday I had the pleasure of attempting to protest my property tax assessment at the Travis County Appraisal District. Living in Hyde Park has it’s downside - regardless of the condition of the house, the dirt can be very expensive.
Here is a camera-phone pic of part of the line of eager protestors:
It’s a pretty standard setup - Protesters walk in, sign their name, and wait to be called by a TCAD representative. Their home-court/computer advantage is kind of unfair - information asymmetry at its finest I suppose.
In any case, I spent about an hour on Sunday putting together market data to support the fair market value of our home. You can’t argue with data, right? Wrong.
Apparently TCAD’s market data (on which their assessment is based) is superior to my own. Additionally, because we purchased the house in the last 12-months, the only outside data they would consider was the closing statement for our home.
On the surface, this seems fair-ish, and in this case it suits me fine. It is the amount paid by a willing buyer to a willing seller on the open market. However, it seems like this method errs on the side of The Man (wikipedia is awesome!).
For example, lets say you agree to purchase a house for $300k, and the seller agrees to cover $5000 of your closing costs. Based on what I learned today, TCAD would consider the minimum value of your home to be $300k, even though you could argue you really only paid $295k.
Perhaps 3% tax on an extra $5k isn’t a huge deal ($150/yr), however, if the intent of the system is to tax people based on the property value, it seems like more care could be taken to improve the accuracy of the appraisal.
What if Texas adopted a system like California, where property values are set and locked at the purchase price? The upside to this would be that appreciation would no longer endanger the affordability of a persons residence. The downside? This would be a serious disincentive for people to move. For those curious here is a Good article explaining the history of California property taxes.
The moral of the story? If you purchased your property in the past 12-months, you directly set the minimum assessed value in TCAD’s eyes. Don’t bother trying to argue otherwise.
What’s your take on our system? Do you have a fun property tax protest story? Lets hear it.
