Texas property taxes are calculated on the assessed value of your real estate. Each county has its own appraisal district that determines the taxable value of your land and your assessed value is ultimately determined on the current market value of your home. However, there is a difference between the assessed value, the market value and the appraised value of your home.

Many people confuse the terms assessed and appraised value of a property. It does not help that each ‘appraisal district’ does not actually use appraisals but instead taxes property based on the assessed value of your home.

What Is the Assessed Value of a Property?

Texas requires every county to offer a yearly assessment of all property for taxing purposes. The county tax assessor will base your property’s assessment on the fair market value of your land.

The assessor attempts to determine what your real estate would sell for in cash. Due to changing market conditions, you can receive an updated assessment every year. Land assessments should consider both current conditions and the potential development of a property. For example, if you have a large parcel of rural land, it may be more valuable if residential subdivisions are going up around the property.

The tax assessed value of your property is then used to calculate your annual property taxes. Any exemptions you qualify for are subtracted from the property tax assessment, and then the local tax rate is applied.

How Is an Appraisal Different from an Assessment?

In real estate, an appraisal is a valuation of your property done by a third party. Unlike an assessment, the government is not involved in home appraisals. This is especially confusing due to counties referring to their appraisal districts. 

An appraisal is conducted on a home by a bank, real estate agent, or a potential seller or buyer to determine the market value of a property. For example, a bank will hire an unbiased appraiser to review a property and then base the amount of a loan on the appraisal. 

Appraisers are required to make a site visit to a home or property during the appraisal process. They also need to research at least three similar sales before leveling an appraisal value.

It is impractical for governments to conduct such thorough inspections of every property within their local area. Instead, assessments are typically based on general neighborhood sales, market activity, and computer modeling. 

How to Challenge a Property Tax Assessment

In Texas, every property owner can challenge their land’s proposed market value. When you receive a Notice of Assessment, you can file a dispute form with the county, either physically or online.

Because your property taxes are based on your assessed value, getting a lower value will result in paying less in taxes! Each challenge will be heard by a local appraisal review board (ARB). Do not be confused by the name. You are challenging the proposed market value of your land, as determined by the county tax assessor.

Your hearing in front of the ARB can be the difference between paying more in taxes and having more money in your pockets. The experienced professionals at Watchtower can represent you at the ARB hearing. We have a history of winning when challenging the current value and we know how to help you pay less. The best part is that you do not pay a cent unless your protest is successful!

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