I recently received my Ward County tax appraisal. It was about 3 times what it was last year. living in Houston i cannot go out there to protest. Can someone refer me to a tax person to protest on my behalf. I would be willing to pay on a contingency basis.
f. Olson
Assuming this is Texas you may file your protest by mail, and you can send evidence (copies) stating your case and why it the value is too high. This is called protest by affidavit. This is common for owners who do not live in the county of property they are protesting and do not wish to hire an agent, or be present for their hearing.
Kitchen said:
Assuming this is Texas you may file your protest by mail, and you can send evidence (copies) stating your case and why it the value is too high. This is called protest by affidavit. This is common for owners who do not live in the county of property they are protesting and do not wish to hire an agent, or be present for their hearing.
Living in Houston and being in the real estate investment business i have successfully protested values over the years. But i had access to other valuations etc. In Ward county and because we're talking about mineral valuations for production, I have no basis for values even though my production is currently lower than last year and will continue to fall over the years to come. Thus, the need for someone who knows how valuations are calculated. As stated in my original post, the value for 2014 is about three times 2013 with income down about 10%. If i can't find someone who knows more than i do, i guess i would have to go with comparing 2013 income with 2014 values. any thoughts?
You can file your protest and request from the appraisal district all of the evidence they are going to use to prove their value. You can specifically ask for the calculations used to determine the market value.
Unfortunately Texas makes mineral values ridiculously complex compared to other property types. Pritchard & Abbott contracts to do the mineral values for a number of Texas counties. Their website states that normally evidence provided from property owners generally consists of royalty statements (24 months for comparison). Are you receiving royalties on oil or gas? Have your royalties increased between January 2013 - March 2014?
The problem I have with mineral valuations in Texas for property taxes is that they do not value it based on "actual income" because they consider that to be more or less an income tax if they used only that method. So they made it even more complex and add "future estimated returns" (or similar) adjustments based on a number of years in the future. I have heard from several mineral owners that their valuations went up even though production declined. I think the counties are estimating the future returns to be greater due to rising natural gas prices. The problem with that is, they are supposed to value as of January 1, but we are using an unknown variable (future price) as part of that calculation. This is where I believe no one really has the answer. We can speculate all day, but if they say its based on the price of gas averaging $6.00 an mcf for the next 3 years, and it turns out to be $5.00 / mcf, NO one has any recourse to get a refund on property taxes from a bad prior assessment that I am aware of.
Remember the county has the burden of proof to prove your value is what they assessed it at. If not, then the ARB should rule in your favor for a lower value.
Kitchen is right on. The assessment is on an asset, not on a production string of payments. As he mentioned, the oil and gas asset valuation is done by other entities and not the board.
My board had on it a somewhat of a failure of a realtor and two sad old boys with nothing else to do.
From sad personal experience, I do not find the board receptive to requests for re-evaluation. For example, I bought a house 4 days before the 12-31-XX cut off date for appraisal. I bougtht the house for $70K less than appraised value.
Their attitude was that my figure was based on comparables. I said why do you need a comparable when you have an actual? Did the comparables need a foundation leveled? They basically said that you could sue them, but that is about it. The difference in dollars did not justify the increase. The burden of proof is on the taxpayer.
They did congratulate me on finding a good deal. Yeah, thanks for the bayonet, also.
Buddy Cotten
Buddy,
Sorry to hear about your experience. Was your purchase of the home be considered a "distressed" sale, such as a foreclosure, tax sale, estate sale, liquidation, etc? Texas has a requirement that all property be appraised at 100% of market value, and there are many examples of transactions that are not considered by the tax code to be "arms length" and therefore do not meet the definition of market value. I am surprised with your purchase that you were unable to get the value lowered. Even if your property was purchased shortly after January 1st of the appraisal year, it should still be considered as well. Most districts should be considering sales from January 1 of the prior year, until March 31st of the appraisal (current) year.
Minerals are not valued the same as homes, business, or other types of property. Unfortunately the most general methods of "appraisal" for minerals you will find on this message board, which are likely to be some of the most common ways to determine "market value" in the real world if you were actually to sell your minerals, are not utilized (in the same extent) in calculating property tax appraisals in Texas. Everyone knows Texas has no income tax on individuals, so the legislature made sure that mineral appraisals are not based entirely on income, so it could not be called an "income tax". Some states are similar (Kansas) and other states may be simpler. What is so frustrating is the portion of value determined by "future price of commodities" (gas price 2-3 years from now), which no one really knows, and even if that price comes true, doesn't mean that you will get that price for you gas- especially if you have an operator like Chesapeake, which deducts unreasonable (and legal) deductions for transportation, compressing, gathering, treating, etc. They also estimate the production for a few additional years as well, again all an estimate. There is no recourse for your taxable value today if their projections used to determine the value fall short down the road. This is why states like Oklahoma (which have no property tax on minerals) are so much easier to deal with since they take a severance tax before you ever get paid your royalty check.