Is sales price sufficient to protest tax appraisal?

Question

I'm not experienced in protesting the property taxes. In the past I have used a tax protesting service for my property and that worked fine.

Last year I bought a new property cash down at a price that is much lower than the appraisal value from the tax office. I paid the full tax for the last year since it's already past the protest date when the deal is closed. I decided to protest the appraisal this year myself, thinking it would be easy  as my purchase price would be the strongest support to assess the property value.

So I did the protest online, submitting the closing statement (it's not HUD as it's a cash down). To my surprise, the appraisal office came back to settle it at the original assessed value, without decreasing it a dime!

I don't think it's a fair assessment so will not back out. I wonder what would be the best option for me at this time:

• Take my closing statement with me, and present it in the official hearing
• Contact the tax protesting company and hand it over to them

A related question I have: does it matter that I replaced the floor in the property after I purchase the property? Will I be required to list all the costs of fixing things up after the sale during the hearing?

I also wonder why it's not sufficient to just providing the sales statement when protesting?

Thank you all for your inputs in advance!

Greg H. · Answer

It will all depend on the appraiser at your informal hearing. My strategy is to argue for the sales price, supply the appraiser with photos of the "negatives" with photos and be prepared to negotiate. No one here will be able to give you an exact answer. I always suggest to take the offer in the informal and forego the formal hearing as the formal hearing usually is not fruitful in The Austin area

Alan Feng · Answer

Also does anyone know if replacing floor is counted as "improvement" or not?

Alan Feng · Answer

Thanks for all the tips!

Does anyone know any reason that the tax office won't consider my purchase price?

Dave Toelkes · Answer

I seem to remember protesting a property tax valuation in Bexar County quite a few years ago.  I was successful in showing that the property values for comparable properties were less than my assessed value.  Not sure this would work for you since you recognize that your purchase was below market value.

Greg H. · Answer

I have done scores of protests in Travis County and your settlement statement may or may not work depending on who you speak to in your informal hearing.  Some tips :

- Always go to your informal hearing. You can do a walk in as well. I always recommend taking the value offered if any in the informal as the chances of success in the formal hearing are greatly reduced

- Pictures are worth a thousand words ! Nothing wrong with showing a picture of a surface crack and crying "possible foundation issues" or pics of ugly floors or countertops

-Keep in mind in Texas the assessed value has ZERO to do with the market value so the higher the value only means the more property taxes you pay. You save +- $30 per thousand of value reduction

Alan Feng · Answer

This is Travis County Texas, and I don't think things would be differ here from Tarrant County. The sales went through title company. That's what puzzles me: Isn't the sales price sufficient to support the protest?

Chuck Cirulli · Answer

In Tarrant County Texas the appraisal district will accept sales price.  If it went through a title company, it would be easier to prove the actual selling price.  Logically, if it was sold on the open market, the sales price should be the true value.

Alan Feng · Answer

In my case it probably would be 1k difference in the actual tax amount, as the appraisal is more than 40k higher than purchase price.

JD Martin · Answer

I am in the exact same boat with one of my units. Tax value has it at $80k+ for a unit I paid $37k for that needed little work and I think realistically might sell at $65-70k now that it is clean and habitable (I put about 4k into it). I have discussed it with the assessment office and get the impression that unless you come armed for bear, probably with professional assistance besides, you are unlikely to get any relief. At least here in TN, once I have appealed and it has been denied I would have to sue to get relief. The cost of suit is going to be much worse than paying the taxes, because even if I got $30k knocked off the tax bill I would be saving less than $200/yr.

So I've decided I'll just eat the number and factor that $200 into the rent for the year. If the place ends up giving me trouble later, I'll sell it, but the total tax bill here is only about $700 city/county, so it's not going to make or break anyone.