O’Connor discusses the three stages of Texas property tax appeals.
HOUSTON, TX, UNITED STATES, March 12, 2026 /EINPresswire.com/ —
Despite legislative pushes and extensive improvements to both business and homestead exemptions, Texas is still one of the top 10 states when it comes to property taxes. Thanks to a lack of income tax, Texas is forced to place the tax burden on homeowners and businesses to fund the government. This has led to many cities and counties seeing spikes that rival or exceed those in California or even New York. While exemptions are the first line of defense against property taxes, appeals are another popular arrow in the quiver of tax reduction that have become more popular every year.
Texas property tax appeals are not monolithic, and there are three sequential stages that all go through. While a taxpayer can exit at any one of the stages, each one has the potential to increase savings. However, each stage is also more complex, requiring more funding and stricter evidence. O’Connor will go through the three stages of property tax appeals and which ones may work.
How Appeals Lower Taxes
Like exemptions, property tax appeals do not reduce taxes directly. Rather, they work to lower the taxable value, which in turn, typically lowers taxes. Tax rates are levied by dozens of local government bodies, including school districts, MUDs, hospital districts, and colleges. Each applies its own tax rate to the taxable value prescribed by the local appraisal district (CAD). Appeals challenge the taxable value, hopefully lowering the burden placed on you, the taxpayer. Since they both go after the same target, appeals and exemptions operate well in tandem, with each building on the other.
Texas Appeal Stages
The three stages that an appeal can traverse are informal, formal, and litigation. This is a stair-step approach, with one leading to the other. If an appeal fails or the settlement is too low, then property owners can push to the next stage. Traditionally, most Texans have stopped at the informal level. However, this has changed in recent years. Thanks to the demand for real estate, taxes have been reaching heights never seen before. This either forces or encourages more taxpayers each year to explore the later steps. In high-dollar counties like Travis, formal hearings now see more victories than informal ones do. In a few rare cases, litigation has the best results. Determining when to exit the process depends on your potential savings and how strong your evidence is.
Property Tax Appeal Evidence
We have previously broken down what evidence is required to get the best results for an appeal, but we provide a quick summary. Photographs of the property are the first step, and owners should focus on issues like damage, deferred maintenance, and other issues that would affect the taxable value. Documentation, such as repair estimates, can also be key. To prove unequal appraisal, owners must compare their home or business to properties of a similar size, age, and location. To prove excessive appraisal, it is important to gather sales data for the neighborhood, so the actual market can be established. With this evidence in hand, owners are ready to begin their journey with the first step.
Informal Appeals
This is the introductory stage to the tax reduction process. These function by a taxpayer filing an appeal with the local CAD. Once received, an informal meeting is held between the taxpayer and a representative of the CAD. The taxpayer presents their evidence, while the CAD counters. If the taxpayer succeeds in presenting their evidence, they can be offered a settlement reduction, which brings the taxable value more in line with reality. Despite their common nature, informal appeals often yield strong results and are certainly an improvement over values not being challenged at all.
Informal appeals are great for simple cases, such as incorrect attributes, the wrong owner being on an appraisal, missing exemptions, and erroneous improvements. They are also an excellent way to protest based on overassessment or unfair appraisal, as even moderate evidence can often prove your case. The major downside is that informal appeals often depend on the CAD itself. Some, like Bexar County, grant reductions at rates of over 90%. Others do their best not to capitulate, either offering small settlements or none at all. If owners are not satisfied with their reduction or did not receive one, then the next step is a formal hearing.
Formal Hearings with the Appraisal Review Board
Formal appeals see the taxpayer and a representative of the CAD face off in a hearing before the appraisal review board (ARB) of the county. The board is a trio of experts who know appraisal, taxes, and Texas property tax law. The ARB acts as an impartial arbiter between the two sides. While the informal stage was weighted heavily toward the CAD, formal hearings are even, with the best evidence generally being the decider. While evidence was certainly key at the previous stage, it is a necessity at the formal one.
In high-tax counties like Travis, Fort Bend, or Galveston, formal hearings are often the best bet for taxpayers. Even if owners receive a good settlement at the informal level, the ARB may grant a larger cut. The ability to get better savings has seen more and more homeowners across Texas push to this level, even after getting a settlement lower down. Businesses have often gone this route out of practicality, and commercial property usually gets its best results at this stage. For most individual taxpayers, the ARB level is where the journey stops. However, for larger businesses and homes, there remains one final option that can be explored in order to achieve a reduction.
Property Tax Litigation
While the two previous levels could be handled by laypeople, the final stage cannot be handled pro se. Instead, legal representation is required. Litigation involves lawsuits against the CAD. Due to the time investment and high cost, litigation is often left strictly to businesses or the odd mansion. There are three main types of litigation: binding arbitration, State Office of Administrative Hearings (SOAH), and judicial appeals. Binding arbitration sees the taxpayer and the CAD plead their case with a court-appointed arbiter, who decides the taxable value through evidence. Binding arbitration is for property worth less than $5 million. SOAH hearings are incredibly rare, as they are only for homes valued over $1 million in value. It is typical for most counties to never see one. Judicial appeals are the most common type of litigation, so common, in fact, that the two are often synonymous.
Judicial appeals are traditional lawsuits that go before the district court. Virtually all judicial appeals involve multi-million-dollar or higher business real estate, though large single-family homes are making more appearances thanks to construction booms and rising costs. In most jurisdictions, judicial appeals tend to be a slam dunk. Many counties will see settlements before court is even held. It is not uncommon to see over 90% of all judicial appeals settled out of court in favor of the taxpayer. If owners make it this far in the process, then they must have excellent evidence, strong resources, and a crack legal team. In many ways, it is the costly bar of entry that prevents taxpayers from prevailing, not the activity of the CAD or its team.
About O’Connor:
O’Connor is one of the largest property tax consulting firms, representing 185,000 clients in 49 states and Canada, handling about 295,000 protests in 2024, with residential property tax reduction services in Texas, Illinois, Georgia, and New York. O’Connor’s possesses the resources and market expertise in the areas of property tax, cost segregation, commercial and residential real estate appraisals. The firm was founded in 1974 and employs a team of 1,000 worldwide. O’Connor’s core focus is enriching the lives of property owners through cost effective tax reduction.
Property owners interested in assistance appealing their assessment can enroll in O’Connor’s Property Tax Protection Program ™. There is no upfront fee, or any fee unless we reduce your property taxes, and easy online enrollment only takes 2 to 3 minutes.
Patrick O’Connor, President
O’Connor
+1 713-375-4128
email us here
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