Background
A small office property in South Austin experienced a substantial increase in assessed value, rising from $778,859 in 2022 to $1,030,200 in 2023, marking a 32% increase.
Equity Argument
According to the Texas Constitution, property taxation must adhere to principles of equality and uniformity, ensuring comparable properties within the same market area are valued equally. Leveraging proprietary artificial intelligence and machine learning, Ownwell agents conducted a comprehensive equity analysis, identifying eight comparable properties assessed below the subject's valuation. During the hearing, Ownwell agents presented a comparative grid, adjusting for property characteristics, and arrived at a median indicated value of $749,000.
Deferred Maintenance
The subject property exhibited several condition issues adversely affecting its market value:
- Termite Damage: The property owner provided photographic evidence of significant wood rot and termite damage.
- Foundation Issues: Photographic evidence showcased substantial cracking in the ceiling and foundation, indicative of foundation damage.
- Roof Leak/Water Intrusion: Staining on the ceiling, attributed to roof leaks, was documented by the property owner.
Ownwell agents utilized the provided photographic evidence to advocate for greater depreciation to be applied to the property's improvement value, consequently reducing the total assessed value. Additionally, Ownwell argued against the logical inconsistency of an increase in improvement value despite the property's deteriorating condition over the same period.
Income Argument
Ownwell agents also estimated the property's value using the income method, a methodology based on income potential and cash flow. Utilizing income data provided by the property owner, Ownwell applied a market-derived capitalization rate from the Central Appraisal District (CAD) evidence packet, resulting in an opinion of value approximately at $400,000.
Results
Following Ownwell's presentation of evidence, the County Appraiser representing the CAD agreed to lower the property value to $749,000, aligning with Ownwell's indicated value on the equity grid. While Ownwell was unable to achieve the income opinion of value, the presentation of multiple methods to arrive at a value contributed to the overall argument that the property was over-assessed. The 27% reduction from $1,030,200 to $749,000 yielded a tax savings of $5,553.
