The City of Austin plans to take its challenge of commercial property appraisals directly to district court. The move is unprecedented. Officials say no other city has actually gotten to this point and was willing to proceed.
Why the Challenge?
The Austin City Council initially filed a petition with the Appraisal Review Board to challenge more than $30 billion in commercial appraisals.
The move came following the release of a report showing that between 2012 and 2014, commercial properties included in the C1 vacant land category and the F1 commercial real property category were grossly undervalued. C1 properties were undervalued by 75% and F1 properties by 27%, according to the study. Because of this, council members are concerned that homeowners have been paying more than their fair share of property taxes.
The City Council decided to move the challenge to district court to avoid delaying the certification of the 2015 tax roll, which could have caused major budgetary problems for the various taxing entities in Travis County.
The Travis Central Appraisal District responded to the city commissioned report.
TCAD officials explained that the lack of a sales disclosure law in Texas could account for the alleged undervaluation.
"TCAD uses every available resource, public and private, to have the most current and relevant data. However, Texas does not have mandatory sales disclosure. The lack of sales disclosure prohibits the appraisal district from knowing the actual sales prices of most transactions."
Officials say a ruling in district court in favor of the city could help prod state lawmakers to make changes to the current sales price disclosure laws.