With home values rising across the nation, many municipalities are experiencing a gold rush in property taxes. Although every city, county, and state operate independently, they all have the same thing in common - new homebuyers are paying higher taxes for comparable properties. You can help your buyer hold down their property tax bill by following just a few guidelines.

Most states ooperate by using the comparable analysis approach as its primary method of assessing residential real estate values. Properties in Texas, for example, are reassessed every three years, and some areas assess annually.

During the fist half of an assessment year, local county appraisal districts research and review records and maps of properties within their jurisdiction. The assessed value is multiplied by the tax rate, which is then set by each taxing entity.

Because of the sheer size of the re-appraisal task, many appraisal districts opt to apply computerized mathematical formlulas based on a number of market variables to arrive at a property value. Neighborhoods can vary by thousands of dollars within just a few blocks, putting some homes at risk of being taxed inaccurately.

By law, the appraisal districts must notify the homeowner when an increase is expected from the previous year. New tax rates are issued and the tax bill is usually sent to the homeowner by late summer or early fall to be paid by year end, January or February.

For homeowners, the time to find out the assessed value of their home is in March, April or May. They must determine if the appraised value is greater than or less than the market value of their home. They can contact the county appraisal district office and request their assessment record.

If the assessed value is greater, the owner can file a protest with the county appraisal office. If the protest is not filed within the guidelines of the county office, then the tax will have to be paid for the current year and a protest filed for the following year. Protest forms are usually available at the taxing authority's office.

When a protest is filed, the appraisal district will schedule a hearing. To prepare for the hearing, the homeowner should have several key pieces of information to assist the proceeding including photographs of the property, especially those showing badly needed improvements; a comparative market analysis for a period of one to two years for the neighborhood surrounding the property (photos of selected properties are also helpful;) and assessment comparables from neighboring homes, which are public information.

Most hearings are informal meetings between the taxpayer and an appraisal district representative. Other hearings are held before an appraisal review board.

According to Patrick C. O'Connor, MAI, president of O'Connor and Associates, there are four things your buyer can do to manage property taxes:

• Verify the appraisal district's data for the residence.
• Research values of nearby similar houses (assessment comparables.)
• Compare market value to assessed value by researching sales of nearby houses (market comparables.)
• Take advantage of procedures to file a protest or pursue litigation when appropriate.

Published: August 4, 1998

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