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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
Q
  1. Factors of Value
A

Principles of:

Substitution

Supply & Demand

Balance

Conformity

Competition

Anticipation

Contribution

Change

When all align, property has HIGHEST & BEST use

26
Q
  1. Phases to Property Tax Calendar
A

Appraisal: January - May

Equalization/Administrative (Remedy): May - July

Assessment (Judicial Review): July - September

Current Collection: October - January

27
Q
  1. Appraisal Phase: (January - May)
A

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
Q
  1. Equalization Phase: (May - July)
A

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
Q
  1. Assessment Phase: (July - September)
A

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
Q
  1. Collection Phase: (October - January)
A

Local jurisdictions collect on tax bills, most mailed by October 1

Tax payments due by January 31, become delinquent on February 1

31
Q
  1. Equal and Uniform Taxation
A

Included in the 1845 Texas Constitution

32
Q
  1. Homestead Exemption
A

Enacted in 1932 during depression era collapse of property values

33
Q
  1. Economic Life
A

Time period an improvement is expected to contribute to the TOTAL VALUE of the property

34
Q
  1. Effective Age
A

Age in years based on condition/utility of the improvement

35
Q
  1. Property
A

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
Q
  1. Methods for Reproduction Cost
A

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
Q
  1. Replacement Cost
A

Cost using current materials and modern building standards

38
Q
  1. Reproduction Cost
A

Cost to get an exact duplicate using materials and methods in use at the time of original construction

39
Q
  1. Ex Parte Communication: SECTION 6.411
A

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
Q

Protest of Inequality of Appraisal: SECTION 41.43

A

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
Q
  1. Gross Rent Multiplier
A

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
Q
  1. Alternate Assessment Date
A

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
Q
  1. Metes and Bounds
A

Method of land description that identifies a parcel by specifying its shape and boundaries

44
Q
  1. Lot and Block System
A

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
Q
  1. Types of Leases
A

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
Q
  1. Bundle of Rights: SURGED
A

Sell

Use

Rent

Giveaway

Enter

Do Nothing

47
Q
  1. Right to Protest: SECTION 41.41
A

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
Q
  1. Protest of Failure to Give Notice: SECTION 41.411
A

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
Q
  1. Types of Ownership Interest
A

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
Q
  1. Dispute Resolution
A

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
Q
  1. Chapter 1: General Provisions
A

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
Q
  1. Chapter 11: Taxable Property and Exemptions
A

Section 11.3: Residential Homestead

Up to 20 acres

Partial Exemption

Temporary Absence

Section 11.43: Application for Exemption

Due by April 30

53
Q
  1. Chapter 22: Renditions and Other Reports
A

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
Q
  1. Chapter 23: Appraisal Methods and Procedures
A

Section 23.01: Appraisals Generally

Section 23.23: Limitation on Appraised Value of Residence Homestead

55
Q
  1. Chapter 25: Local Appraisal
A

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
Q
  1. Chapter 31: Collections
A

Reviews how taxes are collected

57
Q
  1. Chapter 41: Local Review
A

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
Q
  1. Chapter 41: Local Review (Continued)
A

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
Q
  1. Chapter 42: Judicial Review
A

Steps to take

Texas Property Tax Code (7 decks)

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