Homeowners Fight Inflated Property Taxes

Soaring property evaluations are hammering local homeowners. While tax rates have remained relatively stable over the past five years, tax bills are still on the rise. The North Texas housing boom is largely to blame as strong demand continues to drive up home values.

Increasingly, property owners are fighting back. According to the Dallas Central Appraisal District (DCAD), 78,508 residential tax appeals were filed this year – 20 percent more than last year. In 2014, there were only 57,435 appeals.

“It’s insane that the government can just send you a letter saying, ‘Here’s what your house is worth,’ without even going into your home,” said North Dallas resident James Hanson.

When government entities set their budgets, they try to anticipate how much money will be generated from property taxes. If the revenue is higher than expected, they end up with a surplus.

Dallas County Judge Clay Jenkins believes this money should be returned to the taxpayer. He’s lobbying local agencies to reduce the amount they take to ease the burden on families.

“What I’m saying to government is, at a minimum, just take what you said you needed on May 22 (the day before appraisals were released) before you knew there was more money there,” Jenkins said.

Property taxes are the largest source of local government funding. A study commissioned by WalletHub, a personal finance website, concluded that the average Texas homeowner pays 59 percent more in property taxes than the national average. Only Wisconsin, New Hampshire, Illinois, and New Jersey residents pay more.
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Under Jenkins’ plan, government entities would reduce tax rates to offset exorbitant appraisal values, reducing the dollar amount homeowners owe nearer to what they paid last year. He believes this is achievable through a combination of tightening budgets and forgoing the surplus amount.
“The argument with county taxes is whether to keep the rate the same or roll back to take what is needed,” Jenkins said.

The median home value in Highland Park is now around $1.6 million, 33 percent more than the near $1.2 million it was in 2012. Based on the current tax rate, a resident with a home near the median price would pay almost $10,000 more in property taxes than they did four years ago due to the higher appraisal value.

University Park has seen a similar increase, with the median home value rising from around $1 million to $1.4 million.

State law requires county appraisal districts to mail residents their new appraisal value by May 1, or April 1 if the property is a single-family residence homestead. Owners then have until May 31 to protest.

If the owner contests the appraised value, a hearing is scheduled for them to formally present their case. Oftentimes, the appraisal district offers a settlement in hopes of avoiding a full hearing. “I know it’s only a drop in the bucket, but it’s the principal of the thing to me,” Hanson said. “It’s better than nothing.”

While DCAD does not release numbers on the success rate of appeals, analysis of preliminary property values versus final certified property values in the Park Cities suggests that appeals have little effect. As of July 25, the total market value of all homes was down nearly two percent, with some appeals still pending. Despite this, a small reduction offers little solace to homeowners facing steep tax increases.

While Jenkins has received positive feedback from some officials, he isn’t sure if his plan has enough support to succeed. He intends to continue lobbying local agencies in hopes of finding common ground.

“What I’m asking the Commissioners Court and cities to not do is not just stick you with this full tax bill without asking for your opinion or your vote on it,” Jenkins said.

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