As Property Taxes Rise, Concerns Raised About Fairness of Appraisal Process

Notebook with property tax sign on a table.

With property values skyrocketing, more and more Bexar County residents are appealing their Appraisal District's states valuation on their homes and businesses, and many are leaving the appeal hearing dissatisfied and looking for the next step, News Radio 1200 WOAI reports.

Attorney Rahul Patel of the local firm of Patel Gaines, who specializes in property tax issues, says, for many property owners, that 'next step' is cumbersome and expensive, and demonstrate the many reforms that are needed in the Texas appraisal system.

"The way the process is set up, is if the property owner is not happy with the results, they then have to incur the expense and take the lead in justifying their own value and negate why they think the Appraisal District's value is incorrect," he said.

He says the system itself means that mainly property managers and business owners appeal the results of appraisal reviews, and they have to spend their money to 'prove' that a government agency is incorrect, which is a burden, and often shuts homeowners out of the process entirely.

Patel says the main problem with the system is that under the current annual appraisal system, Appraisal Districts are simply overwhelmed.

"The Appraisal Districts are given a very difficult task," he said.  "They are asked to value all property, commercial, real, personal, across the county each year, and as of January 1st."

He says that sort of system is bound to cause problems, with appraisal figures often based on the sales of  'comparable' properties which are blocks or even miles away, and which frequently misstate the basic features of a home, like square footage and the presence of value-adding amenities like a swimming pool.

Patel is co founder of a group called  'Citizens for Appraisal Reform' and he says it is time to increase the fairness of the system.

First of all, he says binding arbitration would be a good way to reach a compromise without expensive litigation.  He says the advantage of the arbitration process is that it allows for the greater amount of time required for the arbitrator to fully examine the thinking that went into the appraisal, something he says frequently doesn't happen in today's hurried annual appraisal process.

He says there should also be basic reform of the Bexar Appraisal District and other Appraisal Districts statewide.

For example, currently the boards of directors of appraisal districts are made up of members of the school boards, commissioners courts, and city councils, appointed by those bodies, and who have an interest in higher appraisals, because that means more tax money for their boards and commissions.  

There are proposals in the works to make Appraisal Districts independently elected, and to include taxpayer representatives.

Another proposal would strengthen members of Appraisal Review Boards, and guarantee their independence from the Appraisal Districts.  

One proposal calls for the State Comptroller, and not the Appraisal Review Board, to be the avenue for appealing appraisal valuations.

Patel says skyrocketing property taxes, caused in part by unregulated appraisal districts, have placed the future of the state's economy in jeopardy.

"Over the last couple of years, the appraisal districts have taken a very aggressive approach against commercial businesses and homeowner, especially relating to higher property taxes."

Patel says homeowners also need to be better aware of the options that are available to them today to appeal what they consider an unfair appraisal, including arbitration and litigation.

"The arbitration process is a difficult one, and people tell me it is a 'loaded game'," he said.

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