New Advantages in 2020 by Filing a Property Tax Lawsuit


Every year, thousands of Texas property owners file lawsuits to further appeal the taxable values of their properties. A lawsuit can be an effective way to further reduce your value, thereby further reducing the amount of taxes you are required to pay.

The overwhelming majority of property tax lawsuits involve appeals based upon the valuation of the property. The overwhelming majority of those suits result in settlement compromises between the property owner and the appraisal district. Very, very few of these lawsuits end up being decided in a trial, primarily due to the sheer number of property tax valuation lawsuits that are filed each year.

There are several new laws in Texas that provide a further incentive to file a lawsuit. For example, it used to be that you would have to pay the entire amount of the tax bill before the deadline, even though you were disputing a portion of it, for fear that you would have to pay penalties and interest on the amounts you were disputing. This is no longer the case. Now, property owners can timely pay the undisputed portion of the tax bill, and not be subject to penalties and interest for any portion of the disputed amount, as long as the disputed amount is paid within 30 days of receiving a supplemental tax bill.

For example, you own a property that you believe should be valued at $800,000. The appraisal district has it valued at $1,200,000. You file your protest and attend the formal hearing. The ARB decides it should be valued at $1,100,000. You decide to file a lawsuit and appeal this decision. You then get a tax bill for the taxes owed on a $1,100,000 property. You decide to pay the taxes owed if the property were valued at $800,000 (or 8/11ths of the property tax bill). The lawsuit proceeds and ultimately you come to a settlement agreement with the appraisal district to value the property at $850,000. Previously, you would then owe the taxes on the extra $50,000 in value that you did not initially pay, PLUS penalties and interest on this amount, calculated from the date they were due. This prevented a lot of property owners from paying the taxes on what they felt were truly owed by the deadline as the penalties and interest were steep. Now, the law says that once you agree on the value, the appraisal district will change it in their system, and the taxing entities will send you a supplemental tax bill for the amount of taxes owed on the extra $50,000 in value that you did not initially pay. As long as you pay this bill within 30 days of receipt, no penalties and interest will ever be assessed against you. Plus, you don’t have to worry about the 4-6 months it takes to get a refund from the taxing entities if you had paid the entirety of the assessed taxes upfront!

This law has the potential to be extremely advantageous to property owners in Texas. If you’d like to explore ways that you may be able to take advantage of this new law, please don’t hesitate to reach out.

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