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Disputing Your Houston Rental Property Value Assessment to Lower Tax Liability

Real Property Management Prestige Manager Meeting with Property Owners to Assess their Rental PropertyLessening the tax liability on your Houston rental property is worth investing your effort on if you have the opportunity.  Even if you are new to investing in rental property or a seasoned pro, it won’t matter. Studying your Houston property value assessment to determine whether it’s accurate is time well spent.

At Real Property Management Prestige, we encourage all our landlords to spend some time doing this because you might learn that your assessment is overly high, which once reviewed again can turn into lower property taxes. There are different ways to detect whether your current property assessment is exact and correct.

How a Property Should be Assessed

Properties are usually assessed by a town or city’s assessor on a yearly basis. In most cases, the assessor evaluates the current state of your property and any improvements or renovations made, and the prevailing market conditions for similar homes in your location; then they multiply that by the area’s level of assessment as ascertained by the municipality. If you own a multi-family building, the assessor will factor in the income you received from the property for the past year minus maintenance costs into the valuation. The cost of rehabilitating the home is also a consideration in determining its assessment.

If you get your annual property tax bill and practically pass out from shock at the numbers, take a moment to calm yourself and then carefully contemplate the options you have to reduce the tax bill. One thing to bear in mind, however, is that you’ll have a deadline to contest the assessment. Most municipalities will give you one to two months after you receive the assessment to challenge it.

How to Understand an Assessment

Scrutinize what the assessment says about your property. You might uncover that you’ve suddenly become the owner of Houston property that is not anything like the one you actually own. For example, the assessment might erroneously give your house four bedrooms when it only has three, or place your home address in an affluent neighborhood next to your actual location. In one case, a homeowner’s one-story home with vaulted ceilings was mistakenly listed as a two-story house and charged double the actual square footage because the assessor viewed it from outside rather than doing a more detailed inspection.

The value of similar properties in your neighborhood can tell you a lot about your own property’s assessment. If you are friends with your neighbors, you may be able to learn from their assessment. Otherwise, it’s a good idea to compare your property with four or five in your general location that have the same amount of square footage and the same property size.

Look into Exemptions

While you’re taking the time to make sure the valuation of the property is correct, also look into whether you’re receiving any exemptions to which you’re entitled. Some states and many municipalities offer breaks to owners who are senior citizens or veterans, homes located in certain areas, and a number of other exemptions. Your local tax assessor may be able to help you find any tax breaks to which you’re entitled.

If your first tax bill after you purchased your property shows that its tax assessment value increased by nearly 50 percent in one year, as happened to an owner in Georgia, you’ll want to ask for a review to help you understand any changes. Most tax assessors are willing to informally explain your assessment. If you’re not happy with the informal explanation, you can make a formal appeal. Property owners who have followed this route say they’ve been able to lower their assessments substantially.

When you work with Real Property Management Prestige, we help you get the most out of your property and navigate it to success. To learn more about the services we offer, contact us online or call us at 281-532-5455 today.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.