HCAD Appraisal Values

[Lowbrow]

There is a cap on annual increases in appraisal value, isn't there? I thought I heard something in the 10% range.

I just bought the property last year so all the past tax info is pulled from HCAD:

In 2002, the appraised value was increased by 2.83%.

2003, 9.98%

2004, 2.38%

2005, 0%

2006, 10%

2007, 13.48% <<

We are currently awaiting approval of our homestead exemption. Could this be why they can increase our total value by over 10%?

Also the letter from HCAD states that "the more active areas of the county have increased as much as 14.5% over last year." Isn't this statement counter to the cap?

What am I missing? Should I protest this? The difference between 10% and 13.48% is about $9k that I will end up being taxed on.

[musicman]

There is a cap on annual increases in appraisal value, isn't there? I thought I heard something in the 10% range.

I just bought the property last year so all the past tax info is pulled from HCAD:

In 2002, the appraised value was increased by 2.83%.

2003, 9.98%

2004, 2.38%

2005, 0%

2006, 10%

2007, 13.48% <<

We are currently awaiting approval of our homestead exemption. Could this be why they can increase our total value by over 10%?

Also the letter from HCAD states that "the more active arease of the county have increased as much as 14.5% over last year." Isn't this statement counter to the cap?

What am I missing? Should I protest this? The difference between 10% and 13.48% is about $9k that I will end up being taxed on.

because you are a new owner there is no cap. the county will look up the sales price and raise the taxes accordingly. remember not all properties are homesteaded. those are not capped and are usually raised more. unfortunately if you paid 200k (and it's on record) that's what you'll be taxed on.

[RedScare]

I am assuming that your 13.48% increase was the 2006 value, not 2007. I don't believe 2007 values are out yet. Prior to purchasing the home, there is no cap. This years value will have a 10% cap over last year. The Taxable Value is based on Jan. 1 of each year. When you pay the tax bill, it is actually for the past year, not the upcoming one. Thinking of it that way, since you did not live in the house on Jan. 1, 2006, there is no cap for that year. There will be a cap on the value for Jan. 1, 2007.

[jm1fd]

There is a cap on annual increases in appraisal value, isn't there? I thought I heard something in the 10% range.

I just bought the property last year so all the past tax info is pulled from HCAD:

In 2002, the appraised value was increased by 2.83%.

2003, 9.98%

2004, 2.38%

2005, 0%

2006, 10%

2007, 13.48% <<

We are currently awaiting approval of our homestead exemption. Could this be why they can increase our total value by over 10%?

Also the letter from HCAD states that "the more active areas of the county have increased as much as 14.5% over last year." Isn't this statement counter to the cap?

What am I missing? Should I protest this? The difference between 10% and 13.48% is about $9k that I will end up being taxed on.

Its pretty simple. No homestead -> No 10% cap

You SHOULD protest if you just bought the house, and they have the value higher than what you paid.

You SHOULD protest if you just bought the house, and you found out that it needs some big repairs that you were unaware of when you bought it.

You SHOULD NOT protest if your value is the same as what you paid, or lower.

I don't believe 2007 values are out yet.

I received my valuation notice in the mail a couple days ago. The 2007 numbers haven't made it to their web site yet, however.

[Lowbrow]

I got my 2007 notice in the mail a few days ago, and thus this post.

I paid a good clip more than the county's appraisal value.

[jm1fd]

I paid a good clip more than the county's appraisal value.

And that, my friends, is going to be the basis for my protest this year.

All THESE OTHER people are appraised at 82.4% of market value. Why am I at 100% of market value?? I want the discount too.

[cottonmather0]

I got my 2007 notice in the mail a few days ago, and thus this post.

I paid a good clip more than the county's appraisal value.

I don't think I understand the point of this post? If you just bought the house a year ago, then you are not entitled to the cap - the property appraisal gets reset at whatever your purchase price was and THEN the cap comes into place in subsequent years.

The cap on appraisals exists so as to prevent long-time residents from getting the shock of a sudden increase in taxes if propety values skyrocket from one year to the next, particularly because long-time homeowners are usually older people whose income is somewhat fixed. HCAD's logic is that you are not a long-time resident, ergo you should have theoretically factored the tax burden into your purchase decision or otherwise not purchased the house.

Appraisals are theoretically meant to be equivalent to the market value of the property and a recent sales transaction is the most accurate way to do it. It doesn't matter one bit what Grandma Smith's appraisal value was before you bought the house, as far as HCAD is concerned it's a brand new tax account with a brand new property and brand new owner.

[musicman]

HCAD: majority of home values fell or stayed the same

Property values have fallen for nearly half of Harris County homeowners and have stayed the same for nearly everyone else, marking the first time in more than 20 years that the county

[John Rich]

And that, my friends, is going to be the basis for my protest this year.

All THESE OTHER people are appraised at 82.4% of market value. Why am I at 100% of market value?? I want the discount too.

Yes, that's called an "unequal valuation", or something like that. Compare your price per square foot to that of similar homes in your neighborhood. If yours is unusually high, that's grounds for getting your home devalued for taxes.

There's a catch-22 here though. Privacy laws prevent you from seeing that data for other homes, unless you file a protest. So you have to launch a protest in order to find out if you really have valid grounds or not. But not to worry, because if it turns out you have no basis to protest, you can just drop it, without penalty. So go ahead and turn in that protest sheet when it comes, and just pull a number out of thin air for what you think your value should be. Then when they open up the data to you, you can actually firm that number up with something justified by statistics.

I have a how-to protest manual I wrote a few years ago (.doc file), with accompanying Excel spreadsheets. Several megabytes in size. If anyone would like a copy of that, just holler with your e-mail address, and I'll send it to you. Contact me at JohnRich3@sbcglobal.net

I've protested every year for about the last 10 years, and won every time.

HCAD has made the process easier now, to avoid the rigors of a presentation in front of a board. When they receive your protest, they'll do a re-evaluation on their own, and send a counter-offer. If you like that, you can accept it and you're done. Or you can reject it, and go before the board. I've been happy with their counter-offers the last couple of years.

Note: this can become a perpetual cycle because of the way their system works. Let's say in year one HCAD tries to increase my value by 8%, and I protest it down to 3%. They next year they want another 8%, but they also get to try and recoup what they lost the previous year, or in other words, 5% plus 8% = 13%. But they're capped at 10%. So effectively, every year after a winning protest, they just about always come back at you with yet another 10% increase. So you have to keep doing it every year to keep your gains.

- John Rich

[cottonmather0]

Note: this can become a perpetual cycle because of the way their system works. Let's say in year one HCAD tries to increase my value by 8%, and I protest it down to 3%. They next year they want another 8%, but they also get to try and recoup what they lost the previous year, or in other words, 5% plus 8% = 13%. But they're capped at 10%. So effectively, every year after a winning protest, they just about always come back at you with yet another 10% increase. So you have to keep doing it every year to keep your gains.

Not only that, but it's written as 10% per year since the last protest. So, in other words, if it's been 3 years since you protested the cap is actually 30% (3 years x 10% still equals "10% per year") above whatever value was set at that particular protest. Year on year they might raise it less than 10%, but so long as there is still room under the "10% x ____ years" cap, the next year they can raise it by however much up to that cap.

You're basically obliged to protest every year, otherwise they can get "caught up" really fast. Most people don't realize this and get a big surprise when they do find out.

Man, I hate HCAD. Not the taxes, they are necessary, but just the system and the arrogance really gets under my skin.

[rgr]

HCAD: majority of home values fell or stayed the same

Property values have fallen for nearly half of Harris County homeowners and have stayed the same for nearly everyone else, marking the first time in more than 20 years that the county's residential market has stagnated or declined, the head of the Harris County Appraisal District said today.

Of the 860,000 homes that have been appraised, 45 percent saw a reduction in value, 39 percent were assigned the same value and 16 percent saw an increase in value, Robinson said.

full article

ours seems to be one of the 16% of homes that have seen an increase in value (according to hcad). the increase is between 9 and 10%. we live in first montrose commons.

[missjanel]

Mine went up over 20%, most of which was based on land value. Well in excess of what I could actually sell for if the home were listed. Past experience shows that the ARB will only make adjustments to the value of the structure and will not make any adjustments to the value of the land. Does anyone have any experience with going to the appeals board and getting the land value adjusted in line with actual market value? I'm willing to pay the cost for arbitration if the appeals board would actually make adjustments to the land value.

ours seems to be one of the 16% of homes that have seen an increase in value (according to hcad). the increase is between 9 and 10%. we live in first montrose commons.

[Urbannomad]

Don't worry cottonmather that protest/cap thing is a common misconception. The law actually reads:

The limitation is 10% per year, times the number of years as the property was last reappraised, plus the market value of improvements added since the property was last appraised.

So it's since the last reappraisal date not protest date, which is the same thing as 10% per year. In some counties they only re-appraise (give new values) every couple of years, so if they are on a 2 year cycle the value could go up 20% when they give a new value (every 2 years). But if they appraise every year, then it's capped at 10% per year. Hope that makes sense.

Bottom line is, your homestead and cap will stay in place regardless of whether you ever protest or not. Of course it wouldn't hurt to be diligent and make sure they don't raise your value more than 10% in error. But if you agree with your value you don't have to protest to maintain the benefits of a homestead.

[cottonmather0]

Don't worry cottonmather that protest/cap thing is a common misconception. The law actually reads:

The limitation is 10% per year, times the number of years as the property was last reappraised, plus the market value of improvements added since the property was last appraised.

So it's since the last reappraisal date not protest date, which is the same thing as 10% per year. In some counties they only re-appraise (give new values) every couple of years, so if they are on a 2 year cycle the value could go up 20% when they give a new value (every 2 years). But if they appraise every year, then it's capped at 10% per year. Hope that makes sense.

Bottom line is, your homestead and cap will stay in place regardless of whether you ever protest or not. Of course it wouldn't hurt to be diligent and make sure they don't raise your value more than 10% in error. But if you agree with your value you don't have to protest to maintain the benefits of a homestead.

They assess property values every year, but my understanding is that it only "appraises" when either the property changes hands (sells) or HCAD/the ARB resets the value either through an independent appraisal or the result of a protest. HCAD does not appraise every single property every year, unless I am mistaken.

EDIT: Here is a link to O'Connor: http://www.poconnor-associates.com/article.asp?id=55

[Urbannomad]

They assess property values every year, but my understanding is that it only "appraises" when either the property changes hands (sells) or HCAD/the ARB resets the value either through an independent appraisal or the result of a protest. HCAD does not appraise every single property every year, unless I am mistaken.

EDIT: Here is a link to O'Connor: <a href="http://www.poconnor-associates.com/article.asp?id=55" target="_blank">http://www.poconnor-associates.com/article.asp?id=55</a>

I believe HC appraises every year, at least they do on my property There may be something in the tax code about them not having to send a notice out every year unless there is a change (ie value, exemption, etc). Even if they appraised only every couple of years, the appraised value can only go up at a rate of 10% year. Of course that number is cumulative if they don't appraise every year, 2years = 20%, 3years + 30% and so on.

O'Connor makes their money off volume so I would take that with a grain of salt. Their site goes on to reference the tax code regarding how the cap is based on appraised year and then they twist that cumulative rate in a way to make it sounds as though you must protest. I promise you it has nothing to do with whether you protest or not. The majority of property owners do not protest and their caps have been in place for years. If you are really bored you can read the complete tax code at http://www.window.state.tx.us/taxinfo/proptax/ or you can always call HCAD and have them verify.

Of course if you disagree with your value by all means protest, but you shouldn't be worried about losing your cap. If everyone had to protest to keep their cap the tax rate would be astronomically high to pay for the staff to hear all the protest. Our state legislators may not always be the brightest but they aren't that stupid!

[20thStDad]

Ours is down, 5.5%. I'll take it. Land value up 15%, improvements down 12%. Sure, why not.

[Ross]

Ours is up the 10% cap, plus another $16k. Market from 226k to 265k, tax value 246k. One neighbor's house is valued on the same terms, other neighbor has bigger house, but much lower value. Time for an unequal appraisal argument.

[travelguy_73]

Ours is down a whopping 13% (in Eastwood). No change in the land value, it is all structure. And to think they never even reached our 2007 purchase price and we have put another $35k into the house since then. WooHoo!

[Urbannomad]

I'm down 2.6% (market and appraised). Land value is up just over 5K, and improvement is down a little more than 11.5K. Now lets see what the taxing entities due with our rates??

[memebag]

Does anyone know how the appraisals are calculated? I'm very curious about our whole block going up.

[musicman]

Does anyone know how the appraisals are calculated? I'm very curious about our whole block going up.

it seems to be by hood as far as i can tell. mine stayed const as did my neighbors. adjoining one went down 10%. parents went up 10% .

[Urbannomad]

Does anyone know how the appraisals are calculated? I'm very curious about our whole block going up.

The appraisals are calculated using mass appraisal techniques. In other words, a model is built using available sales data for similar homes in the same neighborhood, and then applied to each home and a value calculated that way. Of course it can be a little more complicated for commercial properties or truly unique homes. But in a nutshell that is it. You can google "computer assisted mass appraisal" if you want a more in-depth explanation.

Off-topic a bit, but I just got my insurance bill for the next year and my premium was up over $200 so that will eat into any tax savings I might see. You just can't win.

[sarahiki]

Question-- we just got our appraisal, and it hasn't gone up since last year. But we are selling our place at the end of the month for way less than the appraised value. Will HCAD automatically adjust their 2009 calculation (which would mean we would owe less for the first three months of the year), or should I protest (even though the taxes are only our responsibility for the first three months of the year), or should I find something better to worry about?

[Urbannomad]

HCAD should adjust the value next year (2010) to the price you sold at or lower depending on the market this year. You can still protest, but your sell will not be considered "valid" since it is taking place after Jan 1. However, if you think you might save a few dollars, and it's worth it to you, then go for it; or if you want to help out the buyers but your sales price is no guarantee.

[musicman]

should I protest (even though the taxes are only our responsibility for the first three months of the year), or should I find something better to worry about?

the buyers might like it!

[sarahiki]

HCAD should adjust the value next year (2010) to the price you sold at or lower depending on the market this year. You can still protest, but your sell will not be considered "valid" since it is taking place after Jan 1. However, if you think you might save a few dollars, and it's worth it to you, then go for it; or if you want to help out the buyers but your sales price is no guarantee.

thanks. Given the hoops we had to jump through with HCAD last year, I think I'll just let this one go.

[Urbannomad]

thanks. Given the hoops we had to jump through with HCAD last year, I think I'll just let this one go.

That might be the easiest route. However, if you really want to protest you could try their ifile/isettle program. Not every home is eligible for isettle, but basically you just fill out the protest online and they will do the "hearing" electronically and offer you a value. I've never used it, and you may not get a reduction, but it seems like a really easy way to try without having to deal with all the hoops. When you look up your acct up on HCAD.org there is a button at the top that says "iFile A Protest" where you can do it. Might be worth a shot??

[crunchtastic]

Off-topic a bit, but I just got my insurance bill for the next year and my premium was up over $200 so that will eat into any tax savings I might see. You just can't win.

Good point. My HCAD number went down 15%, but USAA will be raising my rates between 15 and 20% come my renewal in June.

[sarahiki]

That might be the easiest route. However, if you really want to protest you could try their ifile/isettle program. Not every home is eligible for isettle, but basically you just fill out the protest online and they will do the "hearing" electronically and offer you a value. I've never used it, and you may not get a reduction, but it seems like a really easy way to try without having to deal with all the hoops. When you look up your acct up on HCAD.org there is a button at the top that says "iFile A Protest" where you can do it. Might be worth a shot??

Done! I'll consider it a deposit in the karma bank, a little gift to the buyers. And I don't mind at all adding some work to HCAD's inbox. They have it coming.

[travelguy_73]

Good point. My HCAD number went down 15%, but USAA will be raising my rates between 15 and 20% come my renewal in June.

Our Nationwide policy renewed just after Ike, and before our claim was settled. It went up 8%. I can't imagine what will happen this fall when it renews again. We were "stuck" with them when we bought the house because they would insure our concrete asbestos tile roof. Now we have a brand new roof to shop around with .

I think we need a separate topic on insurance! It will be fun (like pulling off a band-aid slowly).