Valuing Property
The appraisal district determines the value of all taxable property in the county. Before the appraisal can begin, the appraisal district compiles a list of the taxable property. The listing for each property contains a description of the property and the name and address of the owner.
State law requires chief appraisers who appraise the same properties for different taxing units to exchange information on the properties’ ownership, description, and other data. When filing information, property owners with property in more than one appraisal district must file with each appraisal district office. The chief appraisers will mail these owners a notice each year about this process.
The appraised home value for a homeowner, who qualifies that homestead for exemptions in the preceding year and the current year, may not increase more than 10 percent per year since that home’s last reappraisal as the owner’s qualified homestead.
Property Tax Code Section 23.23(a) sets out the limitation on the appraised value of a residence homestead. It states that the appraised value for a tax year may not exceed the lesser of: (1) the market value of the property; or (2) the sum of: (A) 10 percent of the appraised value of the property for the last year in which the property was appraised for taxation times the number of years since the property was last appraised; (B) the appraised value of the property for the last year in which the property was appraised; and (C) the market value of all new improvements to the property.
The appraisal limitation applies in the year after the homeowner qualifies for the homestead exemption.
How is your property valued?
The appraisal district must repeat the appraisal process for property in the county at least once every three years.
To save time and money, the appraisal district uses mass appraisal to appraise large numbers of properties. In a mass appraisal, the appraisal district first collects detailed descriptions of each taxable property in the district. It then classifies properties according to a variety of factors, such as size, use, and construction type. Using data from recent property sales, the district appraises the value of typical properties in each class. Taking into account differences such as age or location, the district uses the typical property values to appraise all the properties in the class.
For individual properties, the appraisal district may use three common methods to value property: market, income, and cost approach.
The market approach is most often used and simply asks, “What are properties similar to this property selling for?” The value of your home is an estimate of the price your home would sell for on January 1. The appraisal district compares your home to similar homes that have sold recently and determines your home’s value.
The district uses the other methods to appraise types of properties that don’t often sell, such as utility companies and oil leases. The income approach asks, “What would an investor pay in anticipation of future income from the property?” The cost approach asks, “How much would it cost to replace the property with one of equal utility?”
What if your property value rises?
A notice of appraised value tells you if the appraisal district intends to increase the value of your property.
Chief appraisers send two kinds of notices of appraised value. A detailed notice contains a description of your property, its value, the exemptions, and an estimate of taxes that might be owed. This notice is sent:
If the conditions for the above notice do not apply, the chief appraiser will send a short notice without the tax estimate if your property was reappraised, changed hands, or if requested by you or your agent.
- if the value of your property is higher than it was in the previous year (the appraisal district’s board can decide that the district will send detailed notices only if a property’s value increased by more than $1,000);
- if the value of your property is higher than the value you gave on a rendition (see next section); or
- if your property wasn’t on the appraisal district’s records in the previous year.
The chief appraiser must send you the notice of appraised value by May 15 or as soon thereafter as possible. If you disagree with the value, you have until May 31 or 30 days from the date the notice is delivered (whichever is later) to file a protest with the ARB.
The notice of appraised value explains how you can file a protest with the ARB if you disagree with the district’s actions. The notice will include instructions on how and when to file a protest and will include a protest form.
What is a rendition?
A rendition is a form you may use to report the taxable property you own on January 1 to the appraisal district. The rendition identifies, describes, and gives the location of your taxable property. You also may give your opinion of your property’s value on the rendition form, but it isn’t required. Business owners must report a rendition of their personal property. Other property owners may submit a rendition, if they choose.
If the total taxable value of your personal property is less than $500 in any one taxing unit, then the property is exempt in that taxing unit. See the New Business/Going Out of Business Section.
If your property is appraised by more than one appraisal district, you need to file a rendition in each appraisal district office. This can occur when your property is located in a taxing unit that is also in a neighboring county. If you have questions, contact the appraisal district in your county.
- Advantages – If you file a rendition, you are in a better position to exercise your rights as a taxpayer.
- Your correct mailing address is on record so taxing units will send your tax bills to the right address.
- Your opinion of your property’s value is on record with the appraisal district. The chief appraiser must send you a notice of appraised value if the appraiser puts a higher value on your property than the value you listed on your rendition.
- Deadline – File your rendition with the appraisal district after January 1 and no later than April 15. The chief appraiser may extend the deadline to April 30 if you can show good cause for needing an extension.
- Requirements – If you own tangible personal property that is used to produce income, you must report this property on a rendition form every year. Businesses, for instance, must report their inventories, equipment, and machinery on a rendition.
Renditions and any income and expense information that you file about your property are kept confidential by the appraisal district. Persons who are not the property owner, the owner’s employee, or the owner’s affiliated entity must file notarized renditions.
