Property tax protests aren’t as successful as they used to be

April brings many things to Houston. Beautiful migratory birds on their journey northwards. The sweet smell of star jasmine wafting among budding oak tree canopies. And a renewed sense of frustration at a fat property tax assessment.

As a homeowner in Houston, I keep my eyes out for that letter in the mail. I’ve got to be vigilant. Every year in recent memory, Harris Central Appraisal District (HCAD) tried to raise my tax assessment by 10%. Legally, 10% is the most they can increase the assessment on homeowners who have a residential homestead exemption.

I get it. Property taxes are important. They are one of the few ways that Texas funds the local governments and school districts. And I’m not complaining about paying property taxes generally.

But left unchecked, my property tax assessment can get out of control in just a few years. It can be untethered to the actual market value of my home, especially because there aren’t a lot of comparable properties sold in my neighborhood.

So when this assessment letter arrives, I start doing the math. Researching the comps. And I start asking questions. Is HCAD’s property tax assessment accurate? If not, should I hire someone to help with this? Should I do it myself? What do other people do?

Then I take the opportunity to go deep into Harris Central Appraisal District protest data. Luckily, they make big datasets publicly available.

This year, I was looking for something new to do. I started getting a little nostalgic. What does the history of Houston’s homeowner property tax protests look like? How have rising home prices affected tax assessments? So I wrote a little code, crunched a few numbers, and examined protest data from 2010-2022.

More protests, less success in 2022

Last year was a turning point for property tax protests in Harris County. Buoyed by a strong real estate market, Harris Central Appraisal District began a new, frustrating chapter for property tax protests.

For this analysis, “homeowner” refers to anyone with a residential homestead discount in the tax year of the protest. “Success” in a protest is any reduction from the initial tax assessment.

The first thing to note is that there were 84,925 more homeowner protests in 2022 than there were in 2010. This represents 72% growth. Overall, more homeowners are filing protests. But last year, more often than not, they went nowhere.

In 2021, homeowners who protested their property tax on their own had an 81% success rate. In other words, four out of every five protests led to a reduction in the tax assessment.

But in 2022, only 41% of homeowner-led protests were successful. That’s still a lot better than the sad 26% success rate of agent-led protests on behalf of homeowners.

Some trends remain consistent. Since 2010, homeowners leading their own protests have been generally more successful than homeowners who hired an agent. In 2022, this is still the case. In fact, owner-led protests achieved a slightly higher median reduction as well.

The bottom line is that homeowner protests are a lot less successful now, regardless of whether they hired an agent or did it themselves.

Of course, maybe protests are bound to be less successful when the residential real estate market is booming. Even though most homeowners aren’t selling, refinancing, or otherwise capturing the value of that equity growth, they still have to pay taxes on it.

Nearly 1-in-5 new homeowners filed a protest in 2022

When you buy a home in Texas, you are not required to disclose your purchase price to the appraisal district.

So when a property changes hands, HCAD sends out an assessment at what they believe to be the market value of the property, not necessarily what you paid.

In my experience, that first assessment is a lot higher than the purchase price. It’s an easy protest to simply disclose your purchase price and request an adjustment.

I was curious: do new homeowners typically protest their initial tax assessment? Because HCAD open data only lists the most recent owner of a property, I could only analyze data from 2022.

Of the 46,455 homeowners who purchased their home last year, 10,064 filed a protest. In other words, about one in five new homeowners filed a protest, representing 5% of all homeowner protests in 2022.

Should you protest your property tax bill yourself?

I don’t know. I do. Not because I have particularly great results, but because I’m already deep in the data and I can do it online. But every year, I keep asking myself, is it worth the time?

Jeff Reichman

Jeff is passionate about data. He founded January Advisors, and serves on the board of two Houston nonprofits. Read his full bio on LinkedIn.