Lowering property taxes through a tax consulting firm?
Ive been approached by a tax firm telling me they have a 90% success rate at lowering property taxes in Travis and Williamson counties which is in Austin, TX.
Im really intrigued by this and may proceed but thought i'd throw some concerns on here first.
My concerns are:
1) the fee they charge which is
"Consultant shall be paid 40% of the value of actual tax savings to Client resulting from Consultant’s efforts. For example, if the Original Notice Value of Client’s property was $200,000, and if the property’s final certified value was $150,000, Client would owe Consultant an amount equal to 40% of the tax rate that would have applied to that $50,000 difference. This fee is earned only in the year in which the tax savings occur, and client will not owe it in Years 2, 3, etc., based on the reduction in the assessed value from Year 1."
Does that seem like a high fee to you?
2) Im wondering how they are pulling off such a high success rate in this area. All the properties i own here in my opinion are already significantly lower priced by the tax assessors compared to retail value. What secrets are these firms using that im not seeing? If i got an actual appraisal on my houses it would be more then the tax appraised value so I see no motive to even try and contest the property taxes on my own.
I would love to increase my cash flow a bit which is why Im looking into this but do any of you have first hand knowledge on these tax consultant firms that specialize in lowering property taxes?
Thanks
@Joel A. Sounds like a scam to me. If its not find out what exactly they are doing to get your tax lowered. I have heard from some county appraisers in the mainland that some counties almost everyone appeals every year and because of the volume their office cant handle so they give most some kind of reduction. Pretty much as long as they appeal they get something. These guys could be doing this and just appealing on your behalf and not doing any work while collecting 40% of the reduction, easy money I guess. I dont see how they would be able to help because they wouldnt get your property reclassified as it is probably already in the residential class paying the lowest tax rate. They cant pull lower comps out of the air, so it would have to be the same market comps the assessors office uses. I'm pretty sure all counties use mass appraisal, so there is hardly a chance that it would use a nonuniform methodology. Sure some of these could be possible but not enough for them to get a 90% success rate. If you go through contacting them ask them how they are doing this and post back to let us know.
I just got off the phone with them, they basically said they have multiple sources of data that they use for negotiating with the tax assessor and they wouldn't go into detail. They also said that there is no fee at all if they don't successfully lower the tax rate which is a huge plus.
On yelp they have good reviews: http://www.yelp.com/biz/five-stone-tax-advisers-au...
Still debating if I want to proceed but at this point, since there is no fee unless its actually lowered it kind of seems like a no brainer to just try them out.
I will dig around a bit and see what other firms are charging for this same service around here.
Thanks for your input
#4 Off Topic Contributor
- Investor
- Round Rock, TX
I am in Austin and I use Texas Protax on contingency. If they lower things too much they can't really add value the next year so even if you end up paying some in year 1 you'll have them fighting for you for close to free in subsequent years. I think this is more than worth it given how busy I am. If you have plenty of time to fight them yourself it may be better for your situation.
Originally posted by @Bryan Hancock:
I am in Austin and I use Texas Protax on contingency. If they lower things too much they can't really add value the next year so even if you end up paying some in year 1 you'll have them fighting for you for close to free in subsequent years. I think this is more than worth it given how busy I am. If you have plenty of time to fight them yourself it may be better for your situation.
Agree with Bryan. If you are interested in doing it yourself and taking the time that may be a better option. If not, then take the savings.
Be CAREFUL. If your taxes are already low your taxes can actually go UP when you file to appeal lower!
The link above is the council of real estate tax attorneys and the honest will tell you to not file if they believe your taxes could go higher by appealing rather than lower.
This is the exact discussion I was going to start. I bought a house in Texas last year for $155,000 and it is appraised for $195,697 this year. If someone offered me that today, I wouldn't be able to sign the contract fast enough. It is so far OFF, in my opinion. But, all the Texas Property Appeal Sites say I have to be present for the appeal hearing. That means airline tickets, hotel room, meals and other expenses. If the Tax Protest Company can reduce my taxes by $1,000, and I have to pay them 40%, or $400, that is less than it would cost for me to travel there and do it myself.
What am I missing here that could cause a problem?
@Joel A. - When did you buy the property? The appraisal district should lower the value to your purchase price in both of the first two years you own it. For example, I just went to the Denton county appraisal office with my HUD1 for a house I bought in Nov 2014, and as part of an "informal appraisal review" they dropped the value $45k (~$100 per month cash flow for 2015). It took me 10 minutes plus drive time.
@Mike McKinzie - you may be able to do this online. What is the county?
After the first two years I would consider using the tax service at a contingent 40% (in fact we do use one) - at this point they have the relationships and the time that I do not.
Andy
-
Real Estate Agent Texas (#692589)
- Highland Properties
We actually used a company to appeal for our small apartment in Houston (Harris County). The result just came out. The initial assessed value was $890k and the final $820k. According to the bill they sent us, they've lowered almost $70k in value, which translates to about $2k saving on our property tax. The company is charging us 25% of it. I questioned them on their initial assessed value cause our appraisal was no where close to $890k and we bought this property only 4 months ago. So I'm curious if the company just made up some number and tricked us to believe they lowered the value and charged us for the work they didn't do. Any thoughts? I hope I'm not being too crazy....
Thank you!
Originally posted by @Mike McKinzie:
... But, all the Texas Property Appeal Sites say I have to be present for the appeal hearing. That means airline tickets, hotel room, meals and other expenses. If the Tax Protest Company can reduce my taxes by $1,000, and I have to pay them 40%, or $400, that is less than it would cost for me to travel there and do it myself.
What am I missing here that could cause a problem?
Mike, some of these appeal firms actually are attorneys. Check with the tax collector to see if you can give a power of attorney to that local attorney so that you don't have to appear in person. For most matters you can have an attorney represent you, and this could be one of those matters ...
Originally posted by @Becky Lu:
We actually used a company to appeal for our small apartment in Houston (Harris County). The result just came out. The initial assessed value was $890k and the final $820k. According to the bill they sent us, they've lowered almost $70k in value, which translates to about $2k saving on our property tax. The company is charging us 25% of it. I questioned them on their initial assessed value cause our appraisal was no where close to $890k and we bought this property only 4 months ago. So I'm curious if the company just made up some number and tricked us to believe they lowered the value and charged us for the work they didn't do. Any thoughts? I hope I'm not being too crazy....
Thank you!
Not sure if you already know the web site... You can go to http://hcad.org/ (Harris County Appraisal District) to verify the results of your tax dispute.
I was using taxprotest.me - cost only $20 and super easy to use...
Not always you will get full amount that you ask for, but I would take anything that county would give me...