The Connection Between Property Sales and Rising Taxes

El Paso, Texas

Real Property Update

February 3, 2025

Let’s Help You Navigate 2025 Property Taxes

Dear Homeowner,

This newsletter outlines how rising property sales drive higher taxes, how assessments are calculated, and steps to challenge your tax bill. Proactively reviewing your appraisal and protesting inaccuracies can help reduce your 2025 tax burden.

Property taxes are complex, but you don’t have to face them alone. Reach out today to schedule your consultation or learn more about how we can help you save.

The Connection Between Property Sales and Rising Taxes

In recent years, El Paso has experienced a surge in residential property sales, driven by a competitive housing market and rising demand and currently is experiencing a strong demand in the market. Here's how this impacts your taxes:

• Higher Sale Prices = Higher Market Values: When homes sell for higher prices, the appraisal district uses these sales as a benchmark to determine the market value of other properties in the area.

• Comparable Sales Impact All Homes: Even if you haven’t sold your home, the sales of neighboring properties at higher prices can increase the assessed value of your home.

As a result, rising home prices directly contribute to higher property taxes.

Here’s How It Works

How Property Taxes Are Assessed

Property taxes are based on the assessed value of your property, which is determined annually by the Appraisal District. Here’s a simplified process of how it happens:

1. Market Value: The Appraisal District reviews sales data from your neighborhood and determines the current market value of properties similar to yours.

2. Assessed Value: Your property’s assessed value is then set based on these market comparisons.

3. Tax Rate: The assessed value is multiplied by the tax rate, which is set by local taxing entities like school districts, city services, and county infrastructure.

When residential property sales prices increase, the assessed values for all homes in that area are likely to follow suit.

What Can You Do About Rising Property Taxes?

If you feel your property taxes are too high, there are several steps you can take to manage the situation and potentially lower your tax bill. Understanding how assessed values are determined and knowing your rights as a homeowner can help you build a strong case during the protest process. Here’s how:

1. Check Your Appraisal Notice for Accuracy. When you receive your annual appraisal notice, review it carefully to ensure the details about your property are correct. Look for any errors, such as an incorrect square footage, outdated property condition information, or amenities that your home does not have. If there are inaccuracies, you can use them as evidence to argue for a lower assessed value when you protest your property tax.

2. File Your Protest and Present Evidence. Once you’ve gathered your evidence, submit your protest to the Appraisal Review Board (ARB). This must typically be done within 30 days of receiving your appraisal notice. During the hearing, present your case clearly and provide all relevant documentation to support your argument for a reduced value.

How to Present Good Evidence

1. Challenge Comparable Sales Data

The Appraisal District uses comparable sales, or "comps," to estimate your property’s market value. These comps are based on recent sales of similar homes in your area. If the selected sales are not truly comparable to your property, you can challenge their validity.

What to Look For:

• Sale Dates: Ensure the sales data is current. Older sales may not reflect the current market conditions.

• Property Differences: Check that the comps match your property in size, age, condition, and location. For example, if a comparable property has been significantly updated or is located on a larger lot, it may not be a fair comparison to your home.

How It Helps:
If you provide evidence of more appropriate comps—such as homes in similar condition or size that sold for less—this can demonstrate that the district’s valuation is inflated, potentially leading to a reduction in your assessed value.

 2. Highlight Market Value Discrepancies

If you believe the Appraisal District has overestimated your home’s market value based on neighborhood sales, you can argue that the assessed value is not accurate.

What to Do:

• Gather evidence of homes in your area that sold for less than the value assigned to your property.

• Collect photos, listing descriptions, or appraisals that clearly show why your home is worth less than the district’s assessment.

How It Helps:
Providing this evidence demonstrates that the district’s valuation is not reflective of the actual market value, which can lead to a revised, lower assessed value.

 3. Account for Condition or Unique Characteristics

If your property has issues or unique characteristics that reduce its market value, this can serve as another basis for a protest.

What to Highlight:

• Document any needed repairs, such as roof damage, foundation problems, or outdated systems.

• Note any factors that may negatively affect your home’s value, such as proximity to busy roads, smaller lot size, or limited access to amenities.

How It Helps:
The Appraisal District may not have accounted for these factors when determining your property’s value. Providing evidence of these conditions can support your case for a lower valuation.

 4.  Leverage the "Unequal Appraisal" Argument

Texas law allows homeowners to argue that their property is assessed unequally compared to similar properties, even if the market value itself is accurate.

What to Do:

• Compare your property’s assessed value to similar properties in your neighborhood.

• Look for discrepancies where your property is assessed at a higher value than comparable homes without justification.

How It Helps:
By showing that your property is appraised unequally, you can argue for a reduction in your assessed value, regardless of the district’s market value determination.

Important Dates to Remember

• February 1, 2025: Penalties and interest begin accruing on unpaid 2024 taxes, compounding the total owed over time.

• April: Notices of Appraised Value mailed by local appraisal districts.

• May 15, 2025 (or 30 days after receiving the appraisal notice): Deadline to file a protest for your 2025 assessed property value. Missing this date forfeits your chance to challenge an inaccurate assessment.

Now Accepting Clients for Property Tax Consultation Services for Tax Year 2025!

Property taxes can be overwhelming, but we’re here to help. Our expert services include:

• Tax Bill Review: We’ll examine your 2025 assessment for accuracy and ensure all eligible exemptions are applied, potentially saving you money.

• Exemption Filing Assistance: Unsure how to claim exemptions? We’ll guide you through the process for homestead, over-65, veteran, or inherited property exemptions.

• Appeal Preparation: If your 2025 property value is over-assessed, we’ll gather evidence, build a strong case, and update you through the protest process.

• Strategic Tax Planning: Rising tax rates don’t have to derail your finances. We’ll provide tailored advice to minimize your long-term liability.

📞 Contact us today to secure your spot for the 2025 tax year consultation. Don’t wait until it’s too late!

While it is possible to handle the appeal independently, seeking assistance from a property tax professional may improve your chances of a successful reduction.

Sincerely, The Team at Freedom Capital Management.