Arbitration is one of the least appreciated but most potent tools in the arsenal for reducing your home’s taxable value.

If you do not obtain from the Appraisal Review Board the reduction you deserve you can most likely increase it through arbitration.

In 2009 all the cases taken to Arbitration by my firm,  Property Tax Protest,  were successful.   Aggregate arbitration reductions were more than two times the reductions granted by the Appraisal Review Boards.   Arbitration reductions ranged from $14,010 (where the Board had granted zero) to $74,000 (where the Board had granted $7,930).

Here are two examples:

• For a Tarrant County homeowner we obtained an ARB order reducing his $801,000 Proposed Value to $723,000.  His recent cost in the property (as evidenced by public construction lien records available to the appraisal district) was in excess of $1,000,000.  Through Arbitration that value was further reduced to $700,000, saving a total of about $ 2,500 in taxes.
• For a Dallas homeowner we obtained a $7,930 reduction from the ARB to $469,000.  Through Arbitration we further reduced it by $74,000 to $395,000, saving about $2,000 in taxes.

Arbitration is available only for single-family homestead properties.   It requires a $500 fee but if my firm believes in your case and if you don’t save more than $500,  we will refund the difference.  So we won’t take a case we don’t expect to win and there’s no risk to you.

It’s an uneven playing field, tilted in your favor.  For the appraisal district an arbitrator is less predictable than is the Appraisal Review Board.  If the arbitrator settles on a value closer to yours than to the appraisal district’s, then the district must pay the $500 fee.  Since it’s not a budgeted item appraisal districts often settle with a homeowner who requests the right value supported by good documentation.  A settlement returns the fee and the District avoids the $500 risk.

So it’s critical that you request a value supported  by proper documentation; that means sales of comparable properties reasonably adjusted for differences using the district’s adjustment standards.  A real estate broker’s Comparative Market Analysis won’t do the job.

In many  cases Property Tax Protest will share the $500 risk 50/50 with its clients.  Where we decide not to share the risk, you probably don’t have a case.

Information is available online from the State of Texas about Property Tax Arbitration .