Property tax on Recent Purchased property

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Property tax on Recent Purchased property

Mak J.
Member since 2018 · 234 posts · 44 votes

Hi, I just bought a property in November last year and on my tax appraisal, the property is shown way high. Here are some stats:

Purchase price $225k

Appraised value as of 2018 was $234k

Appraised value as in 2019 is $275k (current)

County- Harris County (Houston TX)

* House was remodeled by the contractor before I bought it. Did not came with appliances. Appliances were excluded from sale.

This is my first time so help me out with my strategy thoughts:

1> Submit Final settlement statement which shows purchase price was 225k. On the settlement, 204k is purchase price and other charges are commission and fees.  Because the sale happened in November, it shows the market value of the house at the end of the year.

2> Submit Inspection report showing repairs. I have a contractor quote of $5k. 

3> Would it make sense to get quotes on AC, Boiler or Roof replacement as they are old? 

So considering points 1 & 2, home value should be $204-$5k = $199k. Is there any hope for point#3 argument?

Do I have a solid case above? Thoughts and Comments please.

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Sarah M.
Investor · Houston, TX · Member since 2018 · 16 posts · 4 votes
7y

@Mak K. I’d protest with your requested value & justification. Include the closing statement & 99% of the time HCAD will accept that value. If at that point they don’t accept, you can make the decision to personally contest at the informal & formal hearing or bring in a tax consultant. If you need a consultant, we’ve had luck with O’Connor & Associates. Their payment is directly tied to lowering your assessed value so interests are aligned. Best of luck!

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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    7y

    My 2 cents:  Hire a professional to challenge the taxes for you.  

    For my DFW properties I use Resolute.  I contracted with them.  Now, every year they evaluate my property taxes and challenge them as needed.  Their bill is a portion of the money saved.   Sometimes they get my taxes lowered in years I wouldn't have considered challenging.  I sleep well knowing an expert is looking out for me.

    It saves me a lot of time and brain damage.  Plus, they know how to talk with the review board so are morel likely to get a favorable outcome than I would.

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  • Mak J.
    OP
    Member since 2018 · 234 posts · 44 votes
    7y

    I agree with you to use professionals. But this time I have decided to do it myself.  I read a lot that on the new purchase, the county accepts sale price for the first two years. But I want to go prepared with well presentation. I want to learn it and experience it myself before I pick a service.

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  • Joshua ThompsonBusiness Member
    Accountant · Melissa, TX (Remote) · Member since 2017 · 210 posts · 135 votes
    7y
    Originally posted by @Greg Scott:

    My 2 cents:  Hire a professional to challenge the taxes for you.  

    For my DFW properties I use Resolute.  I contracted with them.  Now, every year they evaluate my property taxes and challenge them as needed.  Their bill is a portion of the money saved.   Sometimes they get my taxes lowered in years I wouldn't have considered challenging.  I sleep well knowing an expert is looking out for me.

    It saves me a lot of time and brain damage.  Plus, they know how to talk with the review board so are morel likely to get a favorable outcome than I would.

    They would make a good addition to my team. I was looking at Resolute but it looks like they only serve specific counties in Texas. Do you mind sending me their link if that isn't true?

    Thompson Tax Group LLC550 Reviews
    WebsiteView Page
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  • Jason Forgey
    Attorney · Frisco, TX · Member since 2019 · 22 posts · 8 votes
    7y

    @Mak K. They should assess at the sales price on the contract when you go to protest.

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  • Jason Forgey
    Attorney · Frisco, TX · Member since 2019 · 22 posts · 8 votes
    7y

    @Jason Forgey I’m in Texas and had this same issue on my purchase. We bought “below market”, but I just showed him the settlement statement and they adjusted their valuation.

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  • James W.
    Investor · Houston, TX · Member since 2016 · 47 posts · 24 votes
    7y

    I've challenged 10-15 appraisals personally, and Houston has (IIRC) an i-file/online settlement system where they will ask you for evidence of value. It's reasonable to ask for the below market close value, but not the other stuff--they will just tell you that those repairs were included in your purchase price.

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  • Sarah M.
    Investor · Houston, TX · Member since 2018 · 16 posts · 4 votes
    7y

    @Mak K. I’d protest with your requested value & justification. Include the closing statement & 99% of the time HCAD will accept that value. If at that point they don’t accept, you can make the decision to personally contest at the informal & formal hearing or bring in a tax consultant. If you need a consultant, we’ve had luck with O’Connor & Associates. Their payment is directly tied to lowering your assessed value so interests are aligned. Best of luck!

    1Reply
  • Jim Cummings
    Residential Real Estate Broker · College Station, TX · Member since 2013 · 1k+ posts · 969 votes
    7y

    @Max K. Based on your post, taxes should be reduced to the amount you paid for the property on the Closing Statement as other posters have indicated.

    Having said that, if you have not filed a Notice Of Protest, you will probably not be allowed to protest this year as the last date to file is May 15, 2019 according to www.HCAD.org 

    May 15: Protest Deadline - Deadline for filing protests to the Appraisal Review Board (or by the 30th day after a notice of appraised value is mailed to the property owner, whichever is later.) .   

    Get your protest in early next year with pictures and you'll most likely gt a reduction.

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  • Mak J.
    OP
    Member since 2018 · 234 posts · 44 votes
    7y

    Updates on my experience: Thank you all for the responses. I did filed the protest on isettle and got the ARB date. For some reason, County never gave me an informal (They say it was glitch due to a previous year agent tried to claim protest this year). I never hired an agent? Anyways the agent protest was denied. They gave me a ARB without informal. 


    But when I went to HCAD on the day of the appointment, the lady at the desk would not agree that I had a right to informal. She called her supervisor and supervisor stated I cannot have an informal (over the phone). Hence I asked her, please let me know the reason why, and she was clueless so she calls her supervisor again. Here comes the supervisor and I explain to him the story. He instantly takes me to another staff member and gets me on informal. I show my purchase price settlement document and they match the price.

    One thing: do not just take the front page of the statement of settlement. Take all the pages. I only had the front page and after insisting they accepted it. In normal circumstances, they need all the pages.

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