Frozen Tax Values Part II By Jeff Stewart, CCIM

The Travis Central Appraisal District (TCAD) is not going to re-appraise residential properties for 2020. Marya Crigler, the Travis County Chief Appraiser, has stated that the county only has access to roughly 15% of the home sales and that is insufficient to appraise most areas.  TCAD had been buying Austin MLS data in violation of the MLS vendor’s contract with the Austin Board of Realtors.  All MLS data is copyrighted and owned for the exclusive use of its members. The vender, CoreLogic, and TCAD were issued cease-and-desist orders by the Board and the transfer of MLS data was stopped.  As mentioned before, this is a risky tactic that is likely to fail.

The unprecedented step of freezing tax values presents a number of questions.  First, will tax agents have no work in Travis County? Will owners protest in 2020, if they did not last year? Or, second, will TCAD have no timely comparable sales that they can use in a arbitration hearing to combat protest challenges?

ProTax, a well-known firm which contracts with property owners to protest their real estate valuations, has changed their business model from charging a success fee of 40% of the saving to charging a base fee of $150 per property and the same success fee.  One has to wonder if they are of the opinion that frozen tax valuations will automatically be too low to reduce further?

The TCAD position also makes one wonder if many of the currently employed appraisers in that office will be told they are no longer needed.  It will all be very interesting as we move into something I have only seen once before in Hays County.

In the late 1980’s, it appeared that Hays County’s hierarchy mad the decision not to re-appraise residential properties since the values were in free-fall.  Some of the values had not been lowered once in the three years of sharply declining values.  Since I had built and sold many homes in the Norther Hays area, I was very familiar with the actual values and Anna and I started a tax agent business.  We represented 55 families.  During the course of all the many meetings I had with HCAD, it was finally acknowledged that the values were left artificially high in order to fund the schools.  I believe the comment was something like, “If we drop the appraisals to the real values we might have to close some schools.”

It was during my time protesting tax values at HCAD that I discovered something worth sharing.  The state law is adamant that the valuations and taxes shall be equitable.  In the case of HCAD, it was easier to get them to lower the improvements than it was the land for the simple reason that technically the lots were to stay roughly the same value.  The rare exceptions were homes next to detention ponds, hones on the corner of a busy entrance, or some other unique issue that justified a reduction in valuation.

In any event, I am betting that this issue of full disclosure is a hot topic in the Legislature again.