Watchdog, my property tax hearing is scheduled, but I’m not sure what to do. In your opinion, should I just drop this? Should I hire a company? I don’t want to spend a ton of time on this. Your thoughts?
Well, your timing is excellent. Here’s why. Until now I would have answered anecdotally, meaning I wouldn’t have data to answer, just word-of-mouth information from property owners. It’d be hit or miss. But that’s not true anymore.
How come, Watchdog?
A new academic study that involved 79,000 Dallas County homeowners has been released. After studying it and talking to its author, for the first time in recent years, we have some solid data. Until now, nobody has reported on this study.
What are the important takeaways, Watchdog?
There’s lots in the study called “My Taxes Are Too Darn High” by University of Texas at Dallas associate professor Alejandro Zentner; University of California, Berkeley associate professor Ricardo Perez-Truglia and UTD doctoral student Brad C. Nathan.
I guess the headline could be that a typical savings in taxes by a Dallas County property tax protestor is $600 – if they win the hearing.
How often does that happen?
The study says half of all protesters surveyed won.
What about the hassle of going through the process?
The authors actually name it “hassle costs.” They say that the time and effort to formulate a protest and attend a hearing (this year by phone because of coronavirus) is valued at $226. So when you combine that with the typical $600 savings, you still come out ahead by hundreds of dollars — if you win.
But I’m not sure how to protest effectively.
That’s something they tested. Part of their test group received a notice in the mail from the university about their property tax projections. But the rest of the test group received sample protest language that they could do a little research on and the copy into their protest forms.
Homeowners who used the suggested language were more likely to win their protest, the study showed. This tells us that with a little bit of guidance more people can successfully lower their taxes.
What was the sample language given to the test group?
“I found a home that is similar to mine but was recently sold for less than my home’s appraised market value. The property located at [give address] is 0.29 miles away from my home and has the same number of bedrooms and a similar square footage. That property was sold on [give date] for [give amount].”
How do you get the sales prices?
The study suggests going to Zillow.com or Redfin.com to find estimates of comparable properties. You can also search on the Dallas Central Appraisal District website. Although you won’t necessarily find actual sales figures since those aren’t public in Texas. But you can usually get sale prices of comparable properties – called comps – by asking a real estate agent to run a free search for you. Realtors have this information.
This sounds easy.
It’s a method I’ve used in the past to win. But I love the simplicity of the language shared in the survey.
I wish I’d seen this study earlier this year. That would have helped me.
You should save this story for when you protest next year.
Does the study share results?
Of course. Among those who received a survey letter without the helpful language, only about 8% followed through with a protest. But among those who received the extra suggested language, protesters jumped to 12% — a significant increase. So the lesson is, with a little help, a lot more homeowners can confidently protest and have a 1 out of 2 chance of winning.
Did the study look at demographics of protesters?
Excellent question. In Dallas County, Republicans were more likely to protest than Democrats –13% for R’s vs. 10% for D’s.
Why is that?
Republicans were more likely to use the sample language after it was sent to them. The study only notes that, politically, it depends on who has trust in government and who is altruistic. But a fuller answer would require a different study.
Do property tax agents figure into this?
No. This was only about the do-it-yourself crowd.
What about big house owners vs. small house owners?
The more expensive the property, the more likely the owner will protest. “The richest households protest because they feel they are contributing more than their fair share,” the study states.
What about low income and minority homeowners?
Lower income and Hispanic homeowners are less likely to protest, the study found. That’s sad because for low-income owners, any tax reductions could be a greater percentage in savings than for high-income owners.
What about Spanish-speaking owners?
The study did not send out information in Spanish. But it reports that Hispanic owners were 36% less likely to protest than white owners. This tells me that if a greater push were made to educate low-income owners and also offer materials in Spanish, great savings by these groups could be made. That’s an important finding in the study.
Sounds like an excellent project in 2021 for The Watchdog.
My thoughts exactly. The study shows how a little assistance can go a long way. It states that some “had wanted to protest for years but did not know how to until receiving our letter.” Others “thought protesting was more complicated than it was until they looked at our instructions.”
What happens now?
Zentner, the co-author, told me that the study should be examined by all county appraisal districts. Districts set property values and organize protest hearings. They follow the law, but they don’t make the law. I suggest to the professor that a summary of this study needs to be shared with state lawmakers, who say they are prepping for Round 2 of property tax reform in the coming 2021 Texas Legislature.
What could change?
Greater emphasis on offering protest assistance, especially to minorities and low-income owners. Making sure this assistance is written in plain language would help everybody. Overall, doing more to help Texans take advantage of the right that their property tax bill is based on “equal and uniform” taxation, as Texas law requires.
Often, without filing a tax protest, it isn’t.
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