Property Tax Guides: How Property Taxes Work โ and How to Legally Lower Your Bill
This guide explains how property taxes work, why errors happen, and what steps you can take to potentially lower your bill.
Key Takeaways:
- Property taxes are based on estimates, not precise appraisals
- Errors are common due to mass valuation
- Overvaluations lead directly to higher bills
- Texas and California both allow formal appeals
- Reviewing your assessment annually can prevent overpaying
Property taxes fund schools, roads, emergency services, and local government. But many homeowners donโt realize something important:
Your tax bill is based on an estimate of value โ not a precise appraisal of your home.
Because counties must assess thousands (or millions) of properties at once, they rely on formulas and mass valuation methods. That system is efficient, but not perfect.
Mistakes, outdated data, and broad assumptions can lead to overvalued homes and higher tax bills.
The good news:
Homeowners in both Texas and California have the legal right to review and challenge their assessment.
This guide explains how property taxes work, why errors happen, and what steps you can take to potentially lower your bill.
How Property Taxes Are Calculated
Your property tax bill usually follows a simple formula:
Assessed Value ร Local Tax Rate = Property Tax Bill
1. Assessed Value
The county estimates your homeโs market value.
2. Tax Rate
Local governments set rates to fund services like:
- schools
- fire departments
- police
- infrastructure
- parks
3. Final Bill
Your value is multiplied by the combined local rate.
Example:
- Home value: $450,000
- Tax rate: 2%
- Annual tax: $9,000
If your value is overstated by even $50,000, that could mean $1,000+ extra per year.
Why Assessments Can Be Wrong
Most counties use mass appraisal systems, not individual inspections.
According to the International Association of Assessing Officers, mass appraisal uses statistical models and neighborhood sales data to estimate values across large areas.
Common issues include:
- Incorrect square footage or features
- Comparing your home to upgraded properties
- Ignoring needed repairs
- Using outdated sales data
- Rapid market changes not reflected yet
- Blanket neighborhood increases
Because of this, assessments are estimates, not guarantees of accuracy.
Signs You Might Be Overpaying
You may want to review your assessment if:
- Your value increased sharply in one year
- Your assessed value is higher than your purchase price
- Nearby homes sold for less
- Your home needs repairs or is outdated
- Property records list incorrect details
- Similar homes pay lower taxes
Even small errors can compound over time.
How to Challenge Your Property Tax Assessment
The process differs slightly by state but follows similar steps.
Texas Homeowners
Texas property owners can protest through their local Appraisal Review Board (ARB).
Guidelines are provided by the Texas Comptroller of Public Accounts.
Typical steps
- Review your Notice of Appraised Value
- File a protest (usually by May 15 or 30 days after notice)
- Gather comparable sales or evidence
- Attend an informal meeting or ARB hearing
- Receive a decision
Official resource
https://comptroller.texas.gov/taxes/property-tax/protests/
Texas allows protests for:
- market value
- unequal appraisal
- denied exemptions
- incorrect records
California Homeowners
California uses county-level appeal boards with oversight from the California State Board of Equalization.
Typical steps
- Review your annual assessed value
- File an Application for Changed Assessment
- Provide supporting evidence
- Attend a hearing if needed
- Wait for determination
Filing window
Most counties accept appeals between July and September or November (varies by county).
Official resource
https://www.boe.ca.gov/proptaxes/appeals.htm
California also allows temporary reductions when market values fall below assessed values (often called decline-in-value appeals).
What Evidence Helps Your Case?
Stronger documentation improves your chances.
Helpful items include:
- Comparable home sales (same area, similar size/age)
- Photos of condition issues
- Repair estimates
- Inspection reports
- Independent appraisals
- Proof of incorrect property details
Objective data carries more weight than opinions.
Should You File Yourself or Get Help?
Many homeowners file independently.
Others use consultants or services to assist with:
- comparable sales research
- documentation
- filing paperwork
- representing hearings
Platforms like TaxDrop provide tools and support to help homeowners navigate the process.
Either approach is allowed โ the choice depends on how much time and research you want to handle personally.
Sources
- International Association of Assessing Officers โ Mass Appraisal Standards
https://www.iaao.org - Texas Property Tax Protest Process โ Texas Comptroller
https://comptroller.texas.gov/taxes/property-tax/protests/ - California Assessment Appeals โ State Board of Equalization
https://www.boe.ca.gov/proptaxes/appeals.htm
Keep Reading
Paying Too Much in Property Taxes?
Let our licensed property tax experts assess your tax bill for potential savings. Over 80% of protests get a reduction of more than $1,000 and it takes less than 3 minutes to enroll.
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FAQs
Is protesting legal?
Yes. Both Texas and California provide formal appeal rights.
Can my taxes go up if I protest?
Typically no. Most appeals either lower or keep the same value.
How much can I save?
Savings depend on your local rate and valuation difference. Even modest reductions can mean hundreds or thousands annually.
Do I need an attorney?
No. Most homeowners can represent themselves.
When should I check?
Every year. Assessments reset annually.
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