I have a Duplex in Fort Worth near the TCU area. It is on the edge of the residential area that is "good" and the more sketchy part of Fort Worth. The particular area has tons of Single Family, apartments and commercial, but very few duplex's and none that are remotely similar to mine. (Mine is a 3/2 1800 Sq Ft. each side).
Just got my property tax and it went from 393K to 700K. Yes, you read that right... This would change it from positively flowing to me having to make a payment every month...
First, any advice on how to dispute, would be appreciated. Has anyone actually paid for a professional appraisal?
Second, Is there a "rule of thumb" on appraising a duplex in an area full of single family? For example, worth 75% of two single family of same size/beds/baths?
Just trying to wrap my head around this.
Finally, anyone want to buy a 700K Duplex! LOL
We have contested so many & if we win it's for a year. Then back to the board for another try. Coincidentally the bldg inspector drops by & we get a code violation. We even had a violation for not mowing the grass on the property next door that we do not own??? So had to waste a day in housing court to fight that FOR THE SECOND TIME. We also got a code violation/fine on that same property for trash on the sidewalk after the trash bins were flipped in 60mph winds. But we did get that assessment back down to a 10% increase rather than the 200% increase they assessed for no reason other than the need for more city tax income.
The tax assessments here have & continue to kill so many potential deals. Our esteemed Govn'r (who just gave himself a 40% raise) touts his 2% cap on property taxes & yet we just got hit with a 12.5% increase in assessment on several properties. Then our low income tenants, who just got $9k back on their Federal, blame us because we need to raise rents.
my 2cents!!!
Thats a big sticker shocker
@David Woz you need comps. In Texas price sold is not disclosing, so you'll need access to mls (agent?) or appraiser.
If you believe that it doesn't worth that much - you have to come up with the prove. Considering the amounts, I'd hire real estate lawyer.
I had the same tax increase this year - twice to 2017, but mine is $27K vs $10K - and I don't have a case because I actually bought it for that price.
Market is pretty strong still and to get this value decreased, you'll need a professional.
Don't try to do it yourself - you might lose a chance (unless you just bought it for $393K - then you win)
@Irina Belkofer Yes, purchased in late 2017 for 393,500 with an appraisal for that amount. The appraised tax was in the 525K range for 2018.. I protested last year by simply sending in the appraisal I had done when I purchased that showed 393K and they lowered it to 393K.
I'm hearing that it should be capped at 10%, putting me at the 433K range.. and I do believe that may be an accurate amount of what it is worth...
Any Fort Worth/ Tarrant County people out there with knowledge of the caps?
One would think that if you are capped at 10%, it would be automated and not kick out these crazy numbers.
It would be easy in Cleveland - within last 3 years they count as a purchase price.
Anyway, why would it go up that much?
Are there any duplexes sold for $700K?!?
They can't apply other forms of dwellings as comps (SFR, condos etc).
I'd definitely challenge that - at least for 2019 you should be ok with $393K.
Outrageous tax value :(
Hope your rents will jump twice as well
@Irina Belkofer Yes, purchased in late 2017 for 393,500 with an appraisal for that amount. The appraised tax was in the 525K range for 2018.. I protested last year by simply sending in the appraisal I had done when I purchased that showed 393K and they lowered it to 393K.
I'm hearing that it should be capped at 10%, putting me at the 433K range.. and I do believe that may be an accurate amount of what it is worth...
Any Fort Worth/ Tarrant County people out there with knowledge of the caps?
One would think that if you are capped at 10%, it would be automated and not kick out these crazy numbers.
In Texas, you are only capped at 10% per year if you are an owner occupant and the property is your Homestead. There are several companies in the DFW area that will handle the protest for you for a percentage of the savings
Whoa! Gives me second thoughts on a 7plex I'm trying to buy in El Paso. Hmmm.
10% cap only applies if it is your primary residence (homestead). Most larger cities in Texas have firms that will fight it fore you, and take a percentage of what they save you.
If you do it on your own, do your homework on what works in Tarrant county. Comps work well, but also any downsides to the property (drainage issues, crime, high traffic.
First, any advice on how to dispute, would be appreciated. Has anyone actually paid for a professional appraisal?
I have always used O'Connor and Associates which is probably the largest property tax protest company. It's a no lose deal, I just pay them 50% of whatever they save me. In the past I protested myself but over time found the CAD appraisers are more inclined to negotiate with a tax protest company than me as an individual.
I recently offered some similar advice in the post below.
There are thousands of out of state investors buying up all kinds of TX RE and very few understand how to model tax expense growth.
Bottom line, if you invest in TX real estate, your tax expense will generally grow at the same rate as your appreciation. So, if your property increases in value, so does your tax expense. This kills cash flow down the line if rents don’t grow at same rate.
This is one reason cap rates always seem a bit higher in TX. You can’t accurately model tax expense during an investment holding period. (So more risk).
With those numbers, I’d immediately hire a tax consultant to protest. Deadline to file is May 15, I believe it changed. See if you can get them to do it for 30% of savings the first year of protest (some will negotiate).
They did this to a lot of people this year. You’ve really got to protest and make sure you file as much against the value as possible. Even just filling out the form can do something if you don’t do anything else. I’d suggest doing more though
This is common for Tarrant, they love to blast high appraisals and let people individually bring them back down. Less so in other counties.
its pretty easy if not tedious to dispute, you need to get evidence of your specific street and neighborhoods YoY appreciation rate and apply that to your purchase price in 2017
Certainly enough margin in the tax appraisal to make hiring a professional for this one. Go for a Certified Appraiser or one of the DFW Companies that specialize in protesting Tax Values.
Suggest you start by requesting the Comparable Data used by County Tax Appraisers to set the value. This will give you an idea of where Appraisal District is coming from.
There are Comps for your property - just may not be in your neighborhood! Appraiser will keep enlarging the circle until find enough data to prove or disprove value.
Good Luck with this one.
We have contested so many & if we win it's for a year. Then back to the board for another try. Coincidentally the bldg inspector drops by & we get a code violation. We even had a violation for not mowing the grass on the property next door that we do not own??? So had to waste a day in housing court to fight that FOR THE SECOND TIME. We also got a code violation/fine on that same property for trash on the sidewalk after the trash bins were flipped in 60mph winds. But we did get that assessment back down to a 10% increase rather than the 200% increase they assessed for no reason other than the need for more city tax income.
The tax assessments here have & continue to kill so many potential deals. Our esteemed Govn'r (who just gave himself a 40% raise) touts his 2% cap on property taxes & yet we just got hit with a 12.5% increase in assessment on several properties. Then our low income tenants, who just got $9k back on their Federal, blame us because we need to raise rents.
my 2cents!!!
Check how the taxes are assessed. Others have said they are proportional to your assessment. Where I am if everyone's assessment doubled, the taxes would only increase slightly if at all. The assessed value on 3 of my rentals have gone up over the last couple of years to where the prices are more than 1.5x what they were when I bought them, but my taxes have only gone up $50-100/yr over that same period of time.
The Fort Worth area must have a lot of the same tax assessor collusion problems as in the Houston area. These critters appraising for your county are in bed with the Tax "consultant"/collusion artist. I find it very interesting to see the same names that were our tax collector or now our tax "consultants". Pretty dam sure that same the jerk that stuck it to you for 700,000 went to the same dinner parties, happy hours and BBQs as the the tax consultant that now wants to defend you. If you hire the consultant(s), you are feeding the beast. listen to @Jim Cummings he is right and getting a certified appraiser might even be a lower fee. As an added plus, a real appraiser would not be rewarding those racketeers.
I wish we would all adopt a per foot tax and stop the dog and pony shows every year a the appraisal/shake-down district
Right now somewhere between 20-30% of my rents are paid to the property tax collector. Feel like we are living in Nottingham except I don't think their sheriff is as bad as our appraisal districts
I'm an appraiser and have had to deal with this many times in my state for clients.
Some background, assessors will try to find the market value, just like a licensed appraiser. However, while both are technically appraisers, there are usually different licenses and subsequently different rules for how either party might go about getting to market value. Assessors often employ what is called Mass Appraisal, while a licensed appraiser is going to be specific to your property. Mass appraisal is generally considered inferior, so that is going to work in your favor. (Imagine your tax bill if every property had a deep dive appraisal every year???)
Which brings us to the rules of your state, and your municipality. I can't speak for TX law. What I can tell you, is there is a law, and you need to work within it to appeal your tax bill. The first thing you need to do is contact the taxing municipality and find out what the whole process is. The dates are crucial. The deadlines for appealing BUT ALSO, the EFFECTIVE DATE OF APPRAISAL. You will need to match your appraisal effective date with the assessor's effective date of appraisal. This is usually January 1. That means your appraiser will need to do a retrospective appraisal and yes, they can do that.
What it should come down to is who provided the best evidence. That said, it is also unfortunately true that personal egos and politics sometimes come to play - they shouldn't, but sometimes they do. Remember, this is going to be a "my opinion is better than your opinion" moment. I would seriously suggest you suck-up to the assessor, play the dummy/victim card a bit, and never insult them. Bring them facts (an appraisal) and try to sway them your way. You have no idea what sort of ego maniac you might be dealing with.
Again, first thing to do is find out what the laws and procedures are. Very often the assessor will allow you to come in personally and plea your case informally. Then if that doesn't work, you can make a formal appeal. But I cannot stress enough how important it is to figure out how it is done in your area and work from there. Good Luck.
Right now somewhere between 20-30% of my rents are paid to the property tax collector. Feel like we are living in Nottingham except I don't think their sheriff is as bad as our appraisal districts
We hold notes on median priced properties up here that pay more/month in tax escrow than they do for a 12% mortgage 30yr term. It's criminal when you think of what you get for the decades of taxes already paid & squandered. We are currently getting nailed for completely new sewer pipes to the street $8k, (undersized clay pipe from the dark ages) & new water lines from the meter to the mid-street main, because they used lead (Pb) for the main line hookups. Our last one was $15k. Now 80% of our County taxes goes to Medicaid premiums.
Get used to it....
I’ll just add this footnote for Texas RE (and only TX).
When you file to protest, you can choose from 12 “reasons”. In addition to any others that may apply, always include the first two boxes (1) the value is incorrect, and (2) the assessment is unequal to similar properties. This 2nd one is much easier to research and prove up.
You can file your protest, then assign it over later to a property tax agent to represent you. Deadline to file form is May 15 , so if in doubt, just file the form.
TX law says your property should be assessed at 100% of market value annually. The value should be the value on Jan 1st, that tax year.
If you really don’t know what your property is worth, appraisals on 1-4 unit residential properties can generally be done for $1000 or less, just call around to local certified appraisers. Ask the appraiser to make the effective date of value Jan 1st. If the value is much lower, go argue. If the value is close, you may do better finding similar and nearby properties assessed at a lower price PSF. That supports the second protest reason.
So guys I have a question. I purchased a duplex in Dallas in 2017. Rehab took about 1 year. This year my property tax went from~6500 to 9300. When I went to the county appraisers office I was told that the reason the this raise was because of the price I paid for the property. It was also whispered to me that had I gotten a lesser amount on the books than what I paid this raise would not have happened.
1) is the tax really based on the purchasing price of the property?
2) If the property was purchased below the appraised value should I still contest?
3) With remodel Complete, I want to refinance and pull out any equity; Would that expose me to another hike if the value of the property has increased significantly?
@Tony Karns depends on the city/town. We buy homes at Tax Lien auctions for 1/3 of the assessed value & the assessment still goes up randomly without fail. I closed on a property today for $8,000 in back taxes & the assessment is to stay at $78k. Although its worth that. We have properties with mkt values double another & the cockeyed assessment shows the more valuable property with a significantly lower assessment than the other. There is absolutely no rhyme or reason to their logic.
@Irina Belkofer Yes, purchased in late 2017 for 393,500 with an appraisal for that amount. The appraised tax was in the 525K range for 2018.. I protested last year by simply sending in the appraisal I had done when I purchased that showed 393K and they lowered it to 393K.
I'm hearing that it should be capped at 10%, putting me at the 433K range.. and I do believe that may be an accurate amount of what it is worth...
Any Fort Worth/ Tarrant County people out there with knowledge of the caps?
One would think that if you are capped at 10%, it would be automated and not kick out these crazy numbers.
No the cap is only on properties that have been homesteaded.
You can go in yourself and contest the appraisal. If you are unable to go, there are companies that will to the protest for you.
We had our personal house go from $325 to $450 because we missed the timing to put the homestead exemption on the house.
It would be easy in Cleveland - within last 3 years they count as a purchase price.
Anyway, why would it go up that much?
Are there any duplexes sold for $700K?!?
They can't apply other forms of dwellings as comps (SFR, condos etc).
I'd definitely challenge that - at least for 2019 you should be ok with $393K.
Outrageous tax value :(
Hope your rents will jump twice as well
Its not impossible to hit $700K, but unless it was a massive multi bedroom student living arrangement, or brand new construction, it wouldnt come close to $700K, not out by TCU. Duplexes near Highland park are going for less.
Just an update to this. Although I live out of state, I actually flew into DFW and took care of some other business. I made tons of notes, and really prepared for my protest with TAD.
I tell you, they made it pretty easy. I was able to meet with someone within 20 minutes of walking through the door... they were very friendly... by just doing it myself, I got my evaluation down to 400K.... a HUGE victory.
I had looked at other companies that wanted 40% of the savings... Even going through them with the same results would cost me over 3500.00 just on this property.... while I was there, I was able to shave 50K total off 3 other properties...
My advice for anyone when dealing with TAD would be do your homework... and protest yourself... If you don't like their offer, you don't have to take it and you can then employ one of the services... If I had gone straight to a service, I would be paying some big money.