Never Say Never: Why It May Not Be Too Late to Protest Property Taxes This Year

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Once fall rolls around, most Texas taxpayers are accepting the fact that they’ve missed their opportunity for a property tax appeal this year and are resigned to paying their taxes as they were established by Chapter 41 of the Texas Property Tax Code. But have you heard of a remedy known as a “late correction” protest, a loophole that exists beyond the standard protest deadlines to help taxpayers avoid over-paying in cases involving over-valuation errors? You’re in luck because it exists!

To qualify for a late correction business personal property tax appeal or real estate tax appeal, clearly established criteria must be met. Qualifying errors include multiple appraisals of the same property, the inclusion of a property that does not exist in the form or at the location described in the appraisal roll, and an error that resulted in an incorrect appraised value for the owner’s property. These errors – the first two coming from sections 25.25(c) and the last from 25.25(d) – are distinctly different in what they were created to address, which I’ll elaborate on more in a moment.

In any late correction case, the property cannot have been the subject of 1) a previous Assessment Review Board (ARB) hearing for the tax year in which evidence or argument was presented and the ARB issued a determination, or 2) the value of the property was established as a result of a written agreement with the appraisal district. Finally, the taxes cannot have become delinquent on the property involved in the protest.

As I noted earlier, the errors outlined in Section 25.25(c) are known as “clerical error” statutes and allow a correction of up to five preceding years. “Clerical” error protests are much less common than the following “non-clerical” type.

Sec 25.25(d) protests are known as “non-clerical” and are specific to addressing a valuation dispute (e.g. you feel that your property was incorrectly appraised). These types of errors allow for a correction only of the current year’s value, at any time prior to the date the taxes become delinquent on the property (typically Jan 31 of the following year). However, an error may not be corrected under this section unless it resulted in an appraised value that exceeds more than one-third the corrected property tax appraisal value. In other words, it is required to prove that the initial valuation that’s being protested is at least one-third higher than the corrected value. If the valuation is successfully changed under these circumstances, a penalty of 10 percent of the total, corrected tax amount is charged.

The tax code and processes involved with each kind of late correction commercial real estate appeal should be common knowledge for your property tax consultants. Over the last few decades at Kurz Group, we’ve been involved in numerous late correction protest hearings, and we’ve found that every client has unique needs and circumstances that need to be carefully considered before filing a late correction protest.  Understanding what makes a protest realistic and which subchapter to work with can be the difference between a successful protest and a dismissal. Set yourself up for successful savings by discussing all of the issues and circumstances involving your property with your Texas property tax consultant before deciding to move forward.

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