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Texas Property Tax Code > Property Tax Consultant Review: Katie's Flash Cards > Flashcards

Property Tax Consultant Review: Katie's Flash Cards

1
Q
  1. Given the value and tax rate, calculate the taxes:
A

Value/100 * Rate = Taxes

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2
Q
  1. Given the taxes and value, calculate the tax rate:
A

Taxes divided by Value/100 = Tax Rate

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3
Q
  1. Given the taxes and tax rate, calculate the value:
A

Taxes/Rate = Value/100

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4
Q
  1. Intangible Personal Property:
A

May NOT be perceived by the senses; cash, accounts receivable, stocks, goodwill, trusts, customer listings, contracts, copyrights, permits, software

**NOT TAXABLE AS PERSONAL PROPERTY

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5
Q
  1. Appraised Value:
A

Market Value determined by applying accepted appraisal methods, complying with UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP). Same or similar methods and techniques will be used with same or similar kinds of property

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6
Q
  1. Market Value: Section 1.04
A

Price at which a property would transfer for cash under market conditions IF:

For sale in open market with reasonable time to find a purchaser

Both parties know all the uses/purposes and any restrictions of its use

Both parties seek to maximize gains and neither can take advantage of the other

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7
Q
  1. Taxable Value:
A

Amount determined AFTER deducting the amount of any applicable partial exemptions

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8
Q
  1. Depreciation
A

Loss of usefulness/value due to physical deterioration, functionality or economic conditions. Can be from any cause.

DIFFERENCE BETWEEN COST AND VALUE

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9
Q
  1. Income producing Personal Property
A

Property NOT permanently attached to real estate and other assets such as:

Inventory
Furniture
M&E
Vehicles
Improvements
Accounts Receivable
Cash, Goodwill
Customer Contracts
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10
Q
  1. Taxing Unit
A

Any county, city, town, school district, special district, junior college, hospital district or any other political unit of this state authorized to impose an ad valorem tax

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11
Q
  1. Special Use Appraisal: Chapter 23
A

Qualified open space land devoted to:

Agricultural Use
Timberland
Recreational Use
Wildlife Management
Scenic Land
Park Land
Airport Land
Open Space Land

NOT AN EXEMPTION

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12
Q
  1. Income Approach
A

Estimate of market value based on the monetary returns that property can be expected to produce. Best suited to COMMERCIAL property. Also known as the CAPITALIZATION method

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13
Q
  1. Income Approach to Value
A

NLA or NRA Net Leaseable Area OR Net Rentable

+ PGI Potential Gross Income

+ SI Secondary Income

  • V & C Vacancy & Collection Loss
    ____________________________________________

= EGI Effective Gross Income

  • OE Operating Expenses

____________________________________________

= NOI Net Operating Income

/ CAP Rate Capitalization Rate

____________________________________________

= TOTAL VALUE

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14
Q
  1. Cost Approach
A

Estimate of market value based on current cost to reproduce/replace less depreciation plus land value. Preferred on NEWLY CONSTRUCTED property.

Cost - Depreciation + Land = VALUE

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15
Q
  1. Comparable Sales/Market Approach
A

Estimate of Market value using sales of comparable properties. Adjustments made to subject property for age, size, amenities and characteristics. Used in MASS APPRAISAL by district for properties within the same assigned area.

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16
Q
  1. Tax Situs: Chapter 21
A

Only one category, place where it is taxable

Location on January 1

Where it is “normally” located on January 1, even if temporarily moved

Place where it returns between uses

Principal place of business or owner’s residence. May NOT always be corporate headquarters

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17
Q
  1. Duties of Tax Assessor/Collector
A

Calculation of the tax rate

Preparation and mailing of tax statements

Collection of property taxes

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18
Q
  1. Correction of Appraisal Role: Section 25.25c
A

Chief Appraiser can correct the record for any of the previous 5 YEARS due to:

Clerical errors

Multiple Appraisals

Inclusion of property that does not exist in the form or at the location described

Not owned as of January 1

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19
Q
  1. Clerical Error: Section 25.25c
A

An error that:

Results from a mistake or failure in writing, copying, transcribing, entering or retrieving computer data, computing or calculating

Prevents a tax roll from accurately reflecting a finding or determination made by the chief appraiser, ARB or assessor

*** NOT resulting from a mistake in judgement or reasoning in the making of the finding or determination

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20
Q
  1. Types of Depreciation
A

Physical Curable: age, decay, wear

Physical Incurable: cost to cure estimated to be GREATER than value resulting

Functional Curable: poor design, hindered function, technology outdated

Functional Incurable: cost to cure would be GREATER than value resulting

Economic or External Obsolescence: market forces

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21
Q
  1. Correction Error on Appraisal Roll: Section 25.25d
A

PRIOR to delinquency date, owner or Chief Appraiser can file a motion with ARB to correct an error that resulted in an incorrect appraised value. Error must make value EXCEED by more than ONE THIRD the correct value. Owner must still pay late-correction penalty of 10 PERCENT of taxes on CORRECTED value.

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22
Q
  1. TX Constitution, Article VIII
A

Authorizes property taxation to fund Texas counties, cities, schools and special districts. ALL real and personal property is taxable unless specifically exempted by Federal law or state constitution

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23
Q
  1. Appraisal Districts
A

1979 adoption of Texas Property Tax Code created appraisal districts (254 counties in Texas but only 253 appraisal districts because Randall/Potter share a district)

100% market value appraisals and NO assessment ratios

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24
Q
  1. Life Cycle of a Market Area
A

Growth

Equilibrium (Stability)

Decline

Revitalization

25
25. Factors of Value
Principles of: Substitution Supply & Demand Balance Conformity Competition Anticipation Contribution Change When all align, property has HIGHEST & BEST use
26
26. Phases to Property Tax Calendar
Appraisal: January - May Equalization/Administrative (Remedy): May - July Assessment (Judicial Review): July - September Current Collection: October - January
27
27. Appraisal Phase: (January - May)
Discovery - duty of the district (Section 25.02) Listing - recording of ownership, property type and characteristics Estimates Value - appraisal date of January 1 and must be generally accepted methods Required Notices - sent April 1 for homestead properties, May 1 or sooner for all other properties
28
28. Equalization Phase: (May - July)
Chief Appraiser submits appraisal role to the ARB by May 15 (Section 25.01) Property owners file appeals by May 31 or 30 days after notice was delivered, whichever is later (Section 41.44) Informal and formal hearing process, ARB can order changes (Section 25.25) ARB certifies appraisal role when all protests have been heard (Section 26.01) by July 25
29
29. Assessment Phase: (July - September)
Taxing entities receive certified appraisal rolls Local jurisdictions adopt budgets Tax rates adopted, appraisal role becomes tax roll Assessor mails tax bills (Sept. - Nov.) Some taxpayers dispute their ARB rulings and appeal to district court for Judicial Review
30
30. Collection Phase: (October - January)
Local jurisdictions collect on tax bills, most mailed by October 1 Tax payments due by January 31, become delinquent on February 1
31
31. Equal and Uniform Taxation
Included in the 1845 Texas Constitution
32
32. Homestead Exemption
Enacted in 1932 during depression era collapse of property values
33
33. Economic Life
Time period an improvement is expected to contribute to the TOTAL VALUE of the property
34
34. Effective Age
Age in years based on condition/utility of the improvement
35
35. Property
Any matter or thing capable of private ownership REAL PROPERTY: land, an improvement, mine or quarry, a mineral in place, standing timber, an estate or interest PERSONAL PROPERTY: any property that is NOT real, can be tangible or intangible
36
36. Methods for Reproduction Cost
Index: Original Cost + % Increase of construction costs to current date Square Foot: Cost per Sq. Foot of recently built comparable applied to subject Unit In Place: All costs per unit multiplied by number of units overall Quantity Survey: All components analyzed & all costs are totaled. *** Most detailed and accurate
37
37. Replacement Cost
Cost using current materials and modern building standards
38
38. Reproduction Cost
Cost to get an exact duplicate using materials and methods in use at the time of original construction
39
39. Ex Parte Communication: SECTION 6.411
Prohibited between the Chief Appraiser and ANY member of an ARB. Applies to discussing specific evidence, argument, facts, merits or property involved in a hearing pending before the ARB
40
Protest of Inequality of Appraisal: SECTION 41.43
Burden of proof is on DISTRICT to show: Appraisal ratio is at MARKET AVERAGE of whole district Appraisal ratio is equal to MEDIAN of specific sample (i.e. neighborhood) Appraised value is equal to or less than median of reasonable number of comparables appropriately adjusted
41
41. Gross Rent Multiplier
Estimate of market value using a property's gross RENTS. Multiplier is derived from interest and risk rates common to the area. *** Used primarily on RESIDENTIAL property that is NOT owner occupied
42
42. Alternate Assessment Date
Auto dealers successfully lobbied in 1993 to have their inventory assessed on SEPTEMBER 1 rather than January 1. Now available for ALL business types. Must apply prior to AUGUST 1 for the upcoming tax year and it remains in effect until revoked or changed
43
43. Metes and Bounds
Method of land description that identifies a parcel by specifying its shape and boundaries
44
44. Lot and Block System
System for the legal description of land that refers to the parcels lot and block numbers found on recorded maps and plats of subdivided land
45
45. Types of Leases
Gross: landlord pays ALL expenses Modified Gross: tenant pays utilities; all other expenses are shared Single Net: tenant pays utilities and either property taxes or insurance Double Net: tenant pays utilities and both property taxes and insurance Triple Net: tenant pays utilities, property taxes, insurance and maintenance Absolute Net: tenant pays ALL expenses
46
46. Bundle of Rights: SURGED
Sell Use Rent Giveaway Enter Do Nothing
47
47. Right to Protest: SECTION 41.41
Property Owner can protest before ARB: Appraised Value Unequal Appraisal Inclusion on Records Denial of Exemption Denial of Special Use Appraisal Taxing Units on Appraisal Roll Ownership of the property Change in use of land Any other action adversely affecting the owner
48
48. Protest of Failure to Give Notice: SECTION 41.411
Failure of Chief Appraiser OR ARB to provide or deliver ANY notice the owner is entitled to. CAD has burden of proof to show proper delivery
49
49. Types of Ownership Interest
Fee Simple: most complete and absolute ownership in real estate. Owner has the "Bundle of Rights" Leased Fee: the fee simple interest encumbered by a lease Leasehold Interest: interest held by the tenant
50
50. Dispute Resolution
3 Options to appeal an ARB ruling: Binding Arbitration: Appraised value is $1M or less. Must file request with 45 DAYS of receipt of board order State Office of Admin Hearing (SOAH): 30 DAYS to file after board order Texas Courts: to file after the board order
51
51. Chapter 1: General Provisions
Section 1.04: Definitions Section 1.07: Delivery of Notice Statute Section 1.111: Representation of Property Owner (FID) Section 1.08: Timeliness of Action by Mail Section 1.06: Effect of weekend or Holiday
52
52. Chapter 11: Taxable Property and Exemptions
Section 11.3: Residential Homestead Up to 20 acres Partial Exemption Temporary Absence Section 11.43: Application for Exemption Due by April 30
53
53. Chapter 22: Renditions and Other Reports
Section 22.01: Rendition General Reports Section 22.03: Report of Decreased Value Section 22.07: Inspection of Property (only BPP) Section 22.23: Filing Date (April 15); extension date of May 15 Section 22.24: Renditions and Report Forms
54
54. Chapter 23: Appraisal Methods and Procedures
Section 23.01: Appraisals Generally Section 23.23: Limitation on Appraised Value of Residence Homestead
55
55. Chapter 25: Local Appraisal
Section 25.19: District must send notice of appraised value Section 25.21: Omitted property Back Taxed 5 years for Real/Commercial; 2 years PP Section 25.25: Correction of Appraisal Roll Once roll is certified, can NOT be changed unless property is omitted Chief Appraiser can change anything as long as it doesn't increase value Clerical error up to 5 years
56
56. Chapter 31: Collections
Reviews how taxes are collected
57
57. Chapter 41: Local Review
Reasons to Protest Section 41.41: Right of Protest Market Value determination Unequal Appraisal Inclusion of owner's property on appraisal roll Denial of Exemption Not appraised for special use Taxing Units Ownership Change of use for special use appraisal Any action that adversely effects property owner
58
58. Chapter 41: Local Review (Continued)
Reasons to Protest Section 41.411: protest of failure to give notice Section 41.43: protest of determination of value or inequality of appraisal Section 41.44: notice of protest by May 30 OR 30 days from latest notice Section 41.45: hearing of protest Section 41.46: notice of certain matters before hearing Section 41.66: Hearing procedure
59
59. Chapter 42: Judicial Review
Steps to take

Texas Property Tax Code (7 decks)

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