The Travis County Tax Protest Process | A Personal Account

For the first time last year, Spring of 2023, I embarked on a journey to a Travis County (Austin, TX) property tax protest appeal hearing on behalf of a client. To those of us familiar with his property history and his county tax assessment, the county’s opinion of market value, seemed to indicate an overstep on the part of the county. He would be out of town on the hearing date, and I figured this was an educational opportunity for me. As a real estate professional, I should know how these tax protest hearings work. Being very close to the real estate market on a daily basis, I thought I could help.

Property owners in Travis County, Austin, Texas, have endured quite the tax journey in recent years (2020-2023), as prices (and theoretically) property values in the area soared at a fast pace. Property tax is assessed based on property value. Texas, for those who do not know, prides itself on zero state income tax, but of course this places a lot of pressure on collection of real estate tax to accomplish some heavy lifting for the county and municipalities growing expenses.

It should be noted that Travis county offers an online process for protesting property value to affect their taxes due. This is fairly straightforward for property owners.

If the online process doesn’t yield the desired result for the protesting property owner, the next step is the in-person protest hearing. 

By the time I got involved in this fight on behalf of my client, the case was headed to the final in person hearing stage that would take place at the appraisal district office in north central Austin. I had an appointment time, and 72 hours to prepare.

I dove into researching the history of the property, researching recent comparable sales near the subject property, as well as the comparables cited by the county. After many hours sifting through the different closed sales, I gathered up my paperwork, outlining what I felt were key considerations in the overvaluing of the property by the county. I was also feeling some pressure since I really wanted to make a difference for my client, and his tax burden was placing considerable pressure on his finances.

The county numbers: 

$304,042 (2020)($6081/yr tax due, 2% tax rate)

$420,670 (2021 - Aug 2021 purchased for $500,000)($8413/yr tax, 2% rate)

$620,892 (2022)($12,418/yr tax, 2% rate)

$735,000 (2023)($14,700/yr tax, 2% rate)

This resulted in an increase of over $6000/yr in taxes since purchasing the property 28 months earlier.

Upon arriving for my hearing, I was told to choose between a single person hearing panel, or a three person hearing panel. I chose a single person panel, thinking it might be easier to connect with just a single person, and it seemed less intimidating. 

Below was my strategy going into my hearing:

Step 1-As a starting place, establish a clear market value at a given point in time.

The homeowner had purchased the property only a year and a half earlier (August 2021). There were multiple offers to purchase this property in a red hot real estate market. My client was the chosen contract; surely the panel and I could agree that a fair market value of $500,000 was established in August of 2021 when this contract was executed. It is standard practice in the real estate industry to understand property value as the price a buyer is willing to pay. This was an “arm’s length” transaction, not a purchase between friends or family, for example, who may get a sweetheart deal or special consideration from the seller. I provided a copy of the contract to the panel representative.

Background: Travis County pins their assessment values to the month of January. This property owner’s first tax bill was due in January of 2022, only 4-5 months after his purchase date (and $500,000 payment). The county claimed that because the market in general was rising rapidly in the area from August 2021 to January 2022, they could add a substantial percentage of appreciation to each of those 4 months. They assessed the property value at $420,670 in his year of purchase (2021) and $620,892 in Jan 2022, despite his purchase at $500,000 just 4-5 months previous.

This was the crux of my argument. This property was clearly worth $500,000 in Jan of 2022 so any appreciation for 2022 should work from that base number. Shockingly, the county assessed the property at $735,000 in Jan 2023. I was there to protest the 2023 tax number, but needed to work from 2022 to show the flawed progression.

Step 2-Show why this property is unique, and therefore difficult to compare to area comparable values, which the appraisal district had cited to determine market value.

This particular property is on a short street with 3 acre lots on either side. It is one lot off Hwy 71, which is highly traveled. The lots beside and across from him are being used partly for commercial purposes, despite deed restrictions that do not allow it. There is no homeowner’s association to help uphold any particular standard for yard maintenance, trash cleanup, etc, so the street has challenges in that regard. The appraisal district had noted comparables at higher values that did seem to reflect recent sales, but none of those properties faced these particular challenges, and in fact often were far from the highway with gorgeous vista views.

Step 3-Help the committee understand the property condition.

In the month of August 2021, it was very difficult to find a property on 3 acres for $500,000 in Travis county. The reason this property was priced the way it was revolved in large part around its condition. The property was essentially partially finished. There were exterior walls without siding, an open pier and beam crawl space, and an unfinished outbuilding for starters. The house interior was badly outdated. Again, the comparable sales used by the appraisal district were fully finished homes with updated interiors. There was truly no comparison. I shared photos of the property with the panel.

Step 4-Share Redfin market data to understand the relevant local market stats.

Publicly accessed Redfin real estate market data for the subject property’s zip code, and Travis county generally, clearly showed that prices had stabilized in 2022. Prices had flattened and arguably fallen in the few months prior to Jan 2023. It was nonsensical, in our view, that my client’s market value as assessed by the county had increased nearly 40% in the first 4-5 months of owning it, and another 15% in the 12 months of 2022. Minimally the assessed value would have remained flat from the previous year given the available data and no available appropriate comparable sales (this area has few transactions each year and properties are very unique). The fact that they pinned their whole value on the use of comparable properties that were not truly comparable felt arbitrary and incomplete. How could they entirely ignore the property value (price) paid at purchase? This is the most accurate predictor of value. SURELY WE WOULD ALL BE IN AGREEMENT.

Protestors are given 15 minutes to present; I used it.

And then this happened: a third person, who was sitting to the side with “comparable sales lists,” again ran through the same set of comparable sales previously referenced by the appraisal district (clearly this was a requirement of the hearing process), and the person making the decision responded by making a modest decrease (less than the homeowner had achieved through an online protest application), and dismissed me. 

Granted this is just one accounting of the in-person tax protest hearing experience, but be forewarned that these hearings are extremely rote and frustrating. There is no true consideration to be had in 15 minutes. The one caveat is that this was the final opportunity to appear to contest. There is a possibility that an earlier meeting might have allowed for more consideration, but I left thinking these hearings are largely unproductive.

This seems to suggest that hiring a protest company that specializes in finding out what is working to reduce taxes, presumably, might be a better way to go, despite their retaining 20-40% of whatever tax monies are saved by their efforts.