Speaking of property tax -- and maybe this should be its own thread -- but I am getting tired of the government "creating" industries through burdening the citizenry. Before you roll your eyes, I'm serious about this. Let me explain, using the current property tax discussion as an example (I am in Texas).
Texas has no income tax, as such the property taxes are rather high as this is how most things are funded on a government level. I'm fine with this. However, Texas (and I assume most other states) allow the citizens to protest your appraisal by the end of May. I believe this is a great thing - it gives the citizens a voice to express and justify why their property should not be valued as high as it is. However, you get one chance to go in front of an ARB (Appraisal review board) to plead your case, and their determination is final (they can choose to do nothing to your value, or lower it - they can never raise it).
It's also a very burdensome process: You have to go to the tax office and wait a few hours in order to talk to a county appraiser -- and they will usually try to give you an offer on the spot which you can accept or not. If you do not then you choose in essense to go in front of the ARB, which they then schedule for a later date, where you have to go back to the tax office and wait a few hours to see the ARB to plead your case.
Ok, so this still was never a problem for many years. Appraisals were largely fair and in line. Nice lots were appraised higher, nicer homes in certain neighborhoods were appraised higher, etc. However, a new industry started to form which were property tax firms that would represent you in front of the ARB for you -- and this service was FREE if they could not lower your appraised value. If they did lower it, you would generally pay a fee - usually 30-50% of the tax saved. In other words, it was a no lose scenario -- You just filled out a form, gave them the address and they took it from there. If they failed, you owe nothing. If they are successful sure there's a fee but you still save money in the end and you really didn't have to do anything.
As a result of this new industry, though, now appraisals are completely out of whack. Some homes are ridiculously expensive, some homes go up 25-40% in value over 1 year (caps at 10% if its your homestead, but if not you owe it all). Homes that are the most modest, tiniest home on the street are worth 10-20k more than the biggest most grandiose one in the neighborhood, etc. The government now expects everyone to use these services, and simply "subsidizes" them by appraising for absurdly high home values knowing full well any reasonable person will use a firm to get it lowered and thus paying these firms.
I know a tax guy who got out of this business after representing me, and his exact words to me were striking: "We did get some reductions for you last year. Below is a table of the results. We are not going to be representing properties that rely on the sales comparison approach going forward. Software is the main key in fighting typical residential/commercial assessments and we focus more on special purpose properties that rely on the cost approach and income approach to value." In other words, its just a software number crunching game. Crazy. Why can't the government just do this?
It's an epic scam but one youre dumb to not use (unless your time aint worth shit), and it's really grated on my nerves... Even though I use such firms, since I have several rental properties, scattered across four counties so I'd have to do four different tax offices to get outcomes.
