Property tax valuations skyrocket, homeowners scramble for help

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Photo by Zac Gudakov on Unsplash

A huge increase in property values in Tarrant County has property owners scrambling for relief by seeking protest hearings and begging for assistance from property tax consultants.

According to the Tarrant Appraisal District (TAD), 117,896 Tarrant County homeowners filed notices to protest their assessed values and more are expected as last-minute protests filed before the May 16 deadline are processed. A year ago, 114,038 property protests were filed by the deadline.

The number of protests hasn’t reached record territory but could do so as a result of a 20 percent increase in residential value.

“Values have not gone up this much in the 13 years I have been here,” said Jeff Law, executive director and chief appraiser of TAD. “I can’t say just yet about protests, but I don’t think we have hit a record yet.”

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Nevertheless, the arrival in April of property value notices reflecting the jump in values has overwhelmed local property tax consultants who are hired to help reduce valuations for residential and commercial property.

“We’ve been completely overwhelmed,” said Stephen Dunson, president, owner and senior property tax consultant of IntegraTax Inc. in Fort Worth. “Some firms turned off their phones weeks ago.”

“We’ve seen record numbers of unsolicited requests for help this year,” Dunson said. “We’ve never seen anything like this.”

Most of those requests have been from residential property owners. The commercial protest deadline is 30 days from the date of the valuation notice; for many commercial property owners, the deadline is May 31.

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Commercial values in Tarrant County are up 19 percent across all sectors, according to Law.

“Apartments, warehouses, and hotels and motels saw the largest percentage increases,” Law said.

Tarrant County’s 20 percent increase in residential values falls below the state average of 24 percent. Some of the fastest growing counties in Texas, including Williamson County outside of Austin, saw an increase of 49 percent. Locally, Parker County values increased by 39 percent, Denton County’s climbed 38 percent, Ellis County grew 47 percent and Collin County’s was up 28 percent, according to data from tax appraisal districts.

Dallas County’s value increase of 21 percent was similar to Tarrant County’s.

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“The factors driving property values so high is the current real estate market,” Law said. “Properties all over Texas are selling at list price or over list price. Demand for homes far exceeds the supply of homes.”

The appraisal district’s average market value for residential property in Tarrant County was $262,400 in 2021.

This year, home prices have skyrocketed in Tarrant County, with the average price of a home rising from $342,465 to $356,611 in March.

Despite rising home values, property owners with a residential homestead exemption will see only a 10 percent increase in their appraised values, which is the lower of the previous year’s appraised value or market value plus 10 percent, Law said. Market value, which is the amount a home will sell for in the marketplace, is the only valuation owners may protest.

Higher property values benefit taxing entities such as cities, school districts, county governments and special districts such as community college districts. They also benefit homeowners who wish to tap equity in their homes to use for home improvements or other major expenses.

But they can be disastrous for homeowners who are unprepared for higher property tax bills.

Dunson said many property owners could be shocked when they receive tax notices from the Tarrant County Tax Assessor-Collector later this year.

Due to a change in state law, appraisal districts in Texas no longer need to include estimated tax payments on the blue property value notices, Dunson said.

“Last year, someone might have owed $6,000 and this year the amount could be $11,000 and they had no idea,” Dunson said.

“We’re seeing things with residential values that are unbelievable,” Dunson said. “I’ve never seen anything like this in the 30 years I’ve been doing this.”

Taxing entities, which could see 15 to 20 percent growth in their tax bases due to high property values, are compelled by law to provide relief to taxpayers if the tax burden rises above a certain threshold, Dunson said. Most entities consider tax rates after certified tax rolls from appraisal districts are delivered later in the year.

“They should lower their tax rates to offset the huge increases in property values,” Dunson said. “We’ll have to wait to see what happens.”