What is Binding Arbitration for Texas Property Tax Protests?

Here’s what you need to know about the Texas property tax arbitration process:

• Binding arbitration is a neutral legal process for property owners to appeal an appraisal district’s decision in their property tax protest.
• Arbitration is available for properties valued at $5 million or less, or homesteaded residences of any value, based on an issue with procedural violations or a disagreement over the ARB-determined property value.
• You must file for binding arbitration within 60 days of the final protest result and present a compelling case to a third-party arbitrator.
• Gill, Denson & Company has professional experience with the protest and arbitration processes in all 254 counties, ensuring you have the best chance for success.

What Is Binding Arbitration for Property Tax Protests?

Texas property owners have the right to protest their property taxes with their local county. This process is typically conducted through informal meetings or formal hearings before the Appraisal Review Board (ARB). If neither of these options works or yields satisfactory results, the owner may proceed with binding arbitration (Tax Code 41a). Binding arbitration is overseen by a neutral third party, assigned by the state, who will review both sides of the case.

When Is Binding Arbitration an Option?

There are two kinds of binding arbitration for property tax protests: “limited” and “regular.” When you believe there were procedural violations during your protest process, you may pursue limited binding arbitration. “Regular” binding arbitration is strictly for disputes over the ARB-determined value. You may not use arbitration for correcting exemptions. It is only open to properties recognized as the primary residence homestead, or valued at $5 million or less.

The Arbitration Process in Texas

You must file for arbitration within 60 days of receiving the final result of your protest from the ARB, according to the printed date on your ARB Board Order. A deposit is also required, based on a sliding scale according to the property’s value. If the property owner wins, the deposit is refunded (minus admin fees); if the appraisal district wins, it goes toward arbitration costs. (If the owner wins, the appraisal district must then pay the fee to the Comptroller.) The Comptroller maintains a registry from which a qualified arbitrator will be selected to review the case. Their decision is final and binding, and there are very few paths to argue against their decision.

The alternative to arbitration is a county court appeal or SOAH, which is typically a longer and more expensive process. It’s used more for complex cases or high-value properties over $5 million.

How a Professional Protest Company Can Help

Missing the binding arbitration deadline or filing incorrectly can cause you to forfeit your right to arbitration. Furthermore, a lack of compelling evidence can lead the appointed arbitrator to side with the district’s valuation. Not only would your county-appraised value not be lowered, but you would also lose the deposit fee.

A professional protest company, like Gill, Denson & Company, has the tools and resources to build a strong case on your behalf. We are also more familiar with the protest and arbitration processes in all 254 Texas counties. Our team of experts knows which strategies work best and how to give you the best chance of success.

Did you recently have an unsuccessful property tax protest in Texas? Reach out to the pros at Gill, Denson & Company today, so we can get started on your arbitration case.

If you’re a regular client of ours, we will always discuss your options following a protest result from the ARB. Whether you choose to accept the appraisal district’s ruling or move forward with arbitration, we are here to support you.