The Texas Property Tax Protest Process: Informal Settlements vs Formal ARB Hearings

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

• The Texas property tax protest process typically involves either informal negotiations with the appraisal district or formal hearings before the Appraisal Review Board (ARB). 
• Informal settlements are direct negotiations with the appraisal district, potentially a reasonable resolution as the county field appraiser carefully reviews all of our analysis and evidence.
• Formal ARB hearings, conducted by an independent board, provide a more structured process. However, they can be time-consuming and are subject to the opinion ruled by the ARB, which carries risk.
• The best approach depends on the complexity of the case, the severity of the overvaluation, and your preference for a quick or formal process.

How Does the Texas Property Tax Protest Process Work?

When protesting your property tax assessment in Texas, you have two main options: informal settlements and formal ARB hearings. There are limited circumstances where you can go through a judicial appeal, which includes binding arbitration or litigation. Understanding the pros and cons of each can help you decide which approach is best for your situation. Ultimately, working with a professional property tax protest company is the best choice to maximize your chances of successfully receiving a reduction in your taxes.

Here, we’ll break down the Texas property tax protest process so you can understand each option.

Informal Settlements

Informal settlements involve negotiating directly with the appraisal district to reach an agreement on a reduced property value. Property owners, or their representatives, are granted an informal meeting with the county appraiser. This option allows you to potentially avoid the formal hearing process, which is more involved with detailed evidence and may take longer to resolve. It also helps you avoid a potentially unfavorable ARB panel.

However, your opportunity to present detailed arguments is more limited, and you’ll need in-depth knowledge of property tax law to achieve your desired outcome. The appraiser may not agree to a significant reduction and you may need to proceed with a formal hearing regardless.

Formal ARB Hearings

Formal protest hearings are conducted by the local Appraisal Review Board (ARB), an independent body that reviews property tax protests. Property owners present detailed evidence to dispute their assessed value, and the board listens to both their and the appraisal district’s arguments. This process is more structured and can be more effective in challenging complex or controversial appraisals. You’re more likely to achieve significant reductions in a formal hearing if your case is presented well.

Formal hearings can also be more time-consuming and stressful due to the need for in-depth research and evidence gathering to present a strong case. An independent panel may also take longer to reach a decision than an informal settlement, and the outcome is typically final for the tax year in question. The exception to this is if you meet the circumstances to go through binding arbitration or litigation to appeal the decision, but this is rare. ARB panels carry risk, as the board panel members may not rule favorably for the property owner.

How Do I Choose the Right Approach to Take?

The Texas property tax protest process is not always straightforward, no matter which option you choose. So, how do you know which approach to take? The best approach for you will depend on several factors, including the complexity of your case, the discrepancy in value, and time constraints. An informal settlement can be better when the assessed value discrepancy is more minor and may not require extensive evidence, although it is still necessary to present a detailed case. 

The biggest difference is the appraisal district’s willingness to negotiate based on the evidence shown in an informal settlement. This is when working with a professional property tax protest company can be a significant advantage. Their relationship with the district can influence negotiations, as can the strength of the evidence presented before needing to move to a formal hearing.

Why You Should Navigate the Process with a Professional

Gill, Denson & Company can help you navigate the Texas property tax protest process and determine the best approach for your specific situation. Our experienced team can assist with both informal settlements and formal ARB hearings, providing you with the guidance and support you need to achieve a successful outcome. While we cannot guarantee success, we had a more than 80% success rate of obtaining a reduction for our clients in the 2023 tax protest season. You’ll only pay if we successfully help you lower your taxes, so there’s no risk for you!

Ready to get started on your Texas property tax protest? Reach out to the tax experts at Gill, Denson & Company today!