And that's a wrap for protests in 2021. This post is the first part of a two-part series dedicated to covering 2021 protest results. This part focuses on homeowners with non-zero Homestead Cap Loss (learn more in my blog post Only the Assessed Value Matters). This year the Homestead Exemption was a life-saver in reducing the property tax for homeowners by thousands of dollars, with real estate investors getting slammed with substantial tax increases. Let's dive in and see the results.
Homestead Exemption Effect
This is how the Homestead Exemption played out in the Austin area. The graph below shows the number of residential properties in the Austin area with a given HS Cap Loss amount. For example, there are 49,756 residential properties with HS Cap Loss between $10,000 and $19,999. All these homeowners are enjoying thousands in property tax savings!
2021 Results
This year the Homestead Exemption obliterated most of tax savings opportunities from protesting. Remember that when you protest, you are only fighting to reduce the Market Value of your property. Unless you manage to reduce the Market Value to be below the Assessed Value, your net tax savings will be $0. The graph below compares total protests filed by homeowners with non-zero HS Cap Loss vs. successful protests (non-zero tax savings).
As you can see across the board, only 5-10% of protests were successful with the exception of Austin and Pflugerville at 15% and 21% respectively! The rest were simply a waste of time. Given the current sales prices of homes in the Austin area, I estimate the assessed values will take 4-5 years to catch up to market values. Until then, the successful protest percentage will hover in the single digits for homestead properties. Many of you retain the services of property tax consultants who charge minimum fees even if they save you $0 in property taxes. I would strongly consider canceling their services for homestead properties.
Final Thoughts
Many homeowners protest every year and manage to get property value reductions on the order of $10,000. That reduction is worth approximately $250 in property tax savings; however, that pales in comparison to the savings you will get by ensuring you have the homestead exemption which could be in the thousands of dollars. Verify your homestead exemption status by completing the form below.