Texas Property Tax Appraisals and Public Sale Information

As many of you know, on August 24, 2015, the City of Austin filed a lawsuit against the Travis Central Appraisal District (“TCAD”) alleging that property appraisals in Austin were unconstitutional because they were arbitrary and unreasonable and below market value. Specifically, the City of Austin was complaining about the appraised values of vacant land and commercial properties. The Texas Constitution requires that taxation – including property taxes – be equal and uniform.

Last month, a Travis County judge dismissed Austin’s lawsuit.

The Court ultimately ruled that Austin did not have standing to protest the constitutionality of the property tax assessments. (To bring a lawsuit, the plaintiff must have a direct, vested interest in the lawsuit (i.e., standing). Here, the City’s interest is only in the tax proceeds – not directly in the value of the property. It did not, therefore, have sufficient standing). In addition, even if the Court had reached a decision on the merits, we believe the lawsuit still would have been dismissed. To protest the assessed value of a property, property owners must present specific data indicating the property is overvalued. The City is held to the same standard – it therefore should have to present specific evidence that each property is undervalued. Unless the City had specific data for each individual property value it was contesting, its claim was fruitless. Austin has until early December to decide whether to appeal the ruling.

While this suit was dismissed, the issues involved will remain at the forefront of property tax discussions. Specifically, the City of Austin wants the State of Texas to change from a non-disclosure state to a disclosure state. As a result, Austin will continue to lobby the State on its behalf.

This is a very big issue and we encourage all of you to join the fight against making this change. Transforming to a disclosure state would require property owners to disclose the purchase amount for property in Texas. This information would then become public knowledge. There are many reasons Texas property owners would not want this – including that it would make it easier for appraisal districts to increase the assessed values of those properties.

Fighting this potential change is most certainly in property owners’ best interest, and we– along with the many Texas landowner associations – will continue to resist this change. We again encourage you to contact your state representatives or these organizations and voice your support for the non-disclosure law.

This is not the only issue of which property owners should be aware, however. In addition to efforts at the state level to change the non-disclosure law, local appraisal districts are becoming much better at obtaining property purchase price information. There are many third party companies that provide this information. Often, the information is not accurate, but the appraisal districts rely on it nonetheless. It is therefore essential that property owners not provide any sale information to third party vendors. And we also encourage you to make sure your brokers and attorneys are not disclosing this information. Making sale price information public is rarely beneficial to a property owner.

If you have any questions, please do not hesitate to contact Sean Bukowski at 512-614-0335 or sbukowski@bukowskilawfirm.com.

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