Property taxes in Texas have been volatile and uncertain for many people in recent years, specifically in central Texas and the Austin market. This has caused a lot of people to consider what they can do to reduce property taxes in Austin.
One of the most effective landlord tax tips for rental property owners is to file a property tax protest every year. Unfortunately, a vast majority of property owners aren’t protesting their property taxes.
Because local government agencies find it difficult to assess properties individually, it often results in inaccurate property taxes. That’s why 1836 Property Management has partnered with Home Tax Shield to provide clients with an easy and seamless way to reduce property taxes for Austin real estate investments.
Below is valuable real estate investor tax advice that all rental property owners should follow.
When and Why to Protest
Filing a property tax protest is about more than just being able to save money; it ensures you pay your fair share of taxes.
Home Tax Shield has developed a proprietary software platform that brings technology and experience to the valuation and protest process. This technology, as well as partnerships with companies such as 1836 Property Management, enables property owners to save a lot of money.
The company has an 83% success rate with property tax protests, indicating that rental property owners often pay more than their fair share. In most cases, clients can receive a 5% to 6% reduction in their property tax bill, though that can be even greater if they don’t qualify for exemptions such as the Homestead cap.
Engaging in a property tax protest is a risk-free opportunity for rental property owners. Either you win the case and reduce property taxes in Austin, or you lose the case and nothing happens. In other words, your property taxes are not going to increase if your protest is not successful.
Every year, local county agencies send out home appraisals in April. Property owners generally have about 45 days from that time to file a property tax protest.
The process typically proceeds over the summer, which is when property owners and agents present their case to the counties. October is when the tax rates are officially set.
An important Texas real estate tax tip is to file a protest every year. If you miss a year, you can’t go back and protest later. That is potential savings that you’ll never get back in subsequent years.
Terminology, the Process and How To Do It Correctly
The property tax protest process can be confusing for those unfamiliar with the industry-specific jargon and terminology. Some important terms to remember include:
- Market Value: This is what you can sell your home for, which you want as high as possible.
- Appraisal Value: This is what the county has appraised your home at for that particular year.
- Assessed Value: This is the end value of your home after any protest (if you file one) that the county will use to apply your tax rate to. You want this number as low as possible.
- CAT: An abbreviation for County Appraisal District, this is the entity that conducts property assessments and hears property tax protests.
It’s important to note that counties use their own algorithms to calculate property assessments and make determinations during protests. Because of this complexity, homeowners who attempt to research and file a property tax protest on their own often spend a significant amount of time and effort navigating the process. Often, this effort does not produce the best possible outcome.
When working with Home Tax Shield as an 1836 Property Management client, property owners can easily import their information into our partner page to begin the protest process. Then, their proprietary software will produce an evidence package that is much more effective, since the system is reverse engineered according to what the CAT takes into consideration.
This approach allows property owners to treat rental properties like a business, investing a small amount upfront to save significantly later.
Legislative Updates and Myths
There are some common myths that property owners who wish to reduce property taxes in Austin may believe.
One myth is that using an unadjusted comparative market analysis as the basis for your case is effective. This is what everyone does during property tax protests, but it often actually hurts your argument.
Another myth is that protesting is going to hurt your resale value. It’s important to keep in mind that market value (how much you can sell your home for) is not related to assessed value (which determines how much in property taxes you pay).
A third myth is that if your home needs repairs, it means you should pay less in property taxes. Generally, unless your needed repairs exceed $8,000, the county will not consider them.
Work with 1836 Property Management and Home Tax Shield to Protest Your Taxes
One of the most valuable pieces of real estate investor tax advice you can follow is protesting your property taxes on an annual basis. Doing so will help to reduce your costs and ensure that you pay your fair share of property taxes every year.
Partnering with an experienced, local Austin property management company like 1836 Property Management ensures you get top-quality services. We partner with many valuable companies such as Home Tax Shield to provide services that can help you save money and make your business more successful.
1836 Property Management is located in Austin, TX, and can be reached at (512) 994-4323.Contact us today to take advantage of expert property tax protest services and reduce your annual tax expenses.
