One of the proposals floated at the Texas Republican Party convention in San Antonio over the weekend was one to abolish local Appraisal Districts and use only sales prices to set the property’s value, News Radio 1200 WOAI reports.
But while the more than 100,000 Bexar County property owners who have protested their 2018 appraisals may see that as sweet revenge against the Bexar County Appraisal District, which has increased taxable property values to 9% this year, one percent short of the maximum allowed by state law, attorney Rahul Patel of the local firm of Patel Gaines, who practices real estate law, says it wouldn’t work the way you think.
In fact, Patel says making that change would actually lead to higher taxable valuations, because home prices are actually rising faster than appraised values.
“The market is actually outpacing evaluations,” he said. “You will see increases, not decreases. They believe that if you have a sales price, that is going to set the value.”
The appraised value for taxing purposes is based on a number of factors, mainly what the Appraisal District calls ‘comparables,’ which is the valuation of homes which are similar to yours. Sales price can be completely different, and is based on what a willing buyer and a willing seller agree on, which can be driven by vastly different factors, including the home’s appeal to a buyer and the buyer’s desire to be in a certain neighborhood or be in a certain school.
Patel also says homeowners also are under the misconception that if there is no sale, there cannot be value appreciation, but it doesn’t work that way.
“Well, I’m not going to sell, so there is no sales price for my home, so there will be no value increase,” he said. “That is not the standard they are attempting to establish.”
Anther problem with the proposal is it would require the sales price of a home to be reported to the government, something that is not now required. Many realtors say since the sale involves two private parties, the price they agree to pay for a home is none of the government’s business.
Patel says if homeowner want relief, a better way to achieve that relief is to find more knowledgable people to staff the appraisal appeals process.
“If we get better judges and jury members, we will get better outcomes which will lead to fairer determinations across the board,” he said.