Unequal Appraisal vs. Market Value: Two Ways to Protest Your Property Taxes

Two Legal Grounds for Protest

When you file a property tax protest in Texas, you select the reason(s) on Form 50-132. The two most common grounds for residential protests are:

1. Unequal appraisal (also called the "equity" approach): Your property is appraised higher than comparable properties on the district's rolls.
2. Market value (also called the "sales" approach): Your property is appraised above its market value based on recent comparable sales.

You can (and often should) check both boxes on the protest form. Each uses different evidence and is evaluated differently by the ARB.

The Unequal Appraisal (Equity) Approach

This approach asks a simple question: Is my home appraised fairly compared to similar homes?

You are not arguing about what your home would sell for. You are arguing that the district's own records show comparable homes are appraised at a lower rate (typically measured in dollars per square foot) than yours.

How it works:

• Identify comparable properties in your area (similar sqft, year built, features) from the appraisal district's records.
• Calculate the median appraised value per square foot for those comps.
• Compare that median to your property's appraised value per square foot.
• If your value per square foot is significantly higher than the median of comparable properties, the data supports an unequal appraisal argument.

Why it is often effective: You are using the district's own data against itself. The appraiser cannot easily dismiss comparable values that their own district assigned. If the district says your neighbor's similar home is worth $150/sqft and yours is $180/sqft, the numbers speak for themselves.

The Market Value (Sales) Approach

This approach asks: Is my home appraised above what it would actually sell for?

You use recent closed sales of comparable properties to establish a market value reference point, then argue that your appraised value exceeds that amount.

How it works:

• Gather recent sales (typically within the last 6-12 months) of comparable homes near your property.
• Adjust for differences (size, age, condition, features) if necessary.
• Calculate a median or adjusted sale price per square foot.
• Compare that to your appraised value.

When it is strongest: The sales approach works well when recent sales clearly show prices below the district's appraised values. This is common in declining markets or neighborhoods where sales have slowed.

How ARB Panels Evaluate Each Approach

At a formal ARB hearing, the panel considers the evidence for each ground you have selected:

For unequal appraisal: The panel looks at the appraised values of your comparable properties (from the current tax roll) and determines whether your property is appraised equitably. If the median of your comps is lower per square foot, the panel may reduce your value to bring it in line.

For market value: The panel looks at comparable sales and determines whether the district's appraised value exceeds market value. The quality and recency of the sales matter — a sale from 2 months ago carries more weight than one from 14 months ago.

In practice, many successful protests rely on the equity approach because:

• The data comes directly from the district's own records.
• You do not need to find and verify arms-length sales.
• Even in a rising market where sales prices are high, equity disparities between similar homes still exist.

Using Both Approaches Together

There is no reason to choose only one. Filing under both grounds gives you two separate lines of evidence. If one is weaker for your specific situation (for example, recent sales are higher than your appraisal, but comparable appraisals are lower), you can lean on the stronger approach at the hearing while still preserving the other option.

When gathering your evidence, compile both sets of data:

• Equity evidence: A list of comparable properties from the appraisal district's records with their appraised values and per-sqft rates.
• Sales evidence: Recent closed sales of comparable homes with sale prices, sale dates, and per-sqft prices.

Present both at your hearing and let the data make the case.