Dallas-area luxury home listings often don’t line up with tax values
May 26, 2011
by Steve Brown/The Dallas Morning News

When Troy Aikman put his house up for sale, what drew the greatest interest wasn’t its classic architecture, the sparkling swimming pool or the tennis courts out back.

No, what got my readers yapping was the difference between the asking price for the house and its tax appraisal.

The Highland Drive manse is priced to sell at more than three times what the taxman says it’s worth.

That’s not the only glaring instance of property tax appraisals not lining up with list prices for Dallas-area luxury homes.

On Hunters Glen Road in University Park, for instance, there’s a spread on the market for $16 million. The tax appraisal on this 10,000-square-foot property is $8.99 million.

And on Windsor Lane, another grand estate up for sale is listed at almost $12 million. It’s valued for taxes at less than half that.

A similarly priced Lakeside Drive mansion is listed at almost two times the tax appraisal.

I’m sure you’re wondering what box to check on your tax statement to get this kind of deal.

I certainly don’t begrudge these owners paying less property tax than their real estate listing might suggest they owe.

Over the years — in good markets and bad — this kind of disparity in the tax value of high-end homes has been pretty common in the Dallas area.

The folks at the tax office say their valuations are based on what they think the property is worth — not what the owner is trying to get for the place.

But somebody must be smoking something for there to be such big spreads.

In fairness, both Aikman’s house and the Hunters Glen estate, on a square-foot basis, are appraised significantly higher than the average per-square-foot home sales price in the Park Cities.

And the real value of these properties can’t be determined until someone steps up to write a check for them.

When that finally happens, the sales prices will probably be confidential. Thanks to Texas’ law stating that real estate sales data don’t have to be publicly disclosed, it’s more difficult to figure out how much properties are really worth.

At the super-high end of the home market, so few of these properties trade during a year that coming up with comparable values is even tougher.

Veteran Dallas appraiser Chuck Dannis says tax appraisers must come up with a “reasonable and representative sample of properties in the appraisal district” on which to base their values.

“With such a limited sample of houses that sell for, say, even $10 million-plus, it is hard to support individual assessed values that are so far out of the statistical norm,” Dannis said. “The bad news for all of Troy’s neighbors is if he does strike gold, sells for $24 million, that becomes the ‘market.’”

If your house is worth close to the local sales price average of just over $200,000, there are a lot more examples for the taxman to work with. Your tax value should be closer to what properties in the area are actually selling for.

But I think there’s another factor.

Affluent owners of high-end real estate have resources that the average Dallas homeowner usually can’t muster to fight tax appraisals. Wealthy residents can hire private appraisers, tax consultants and — if it comes to that — attorneys to fight for what they think is a “fair” valuation of their property.

But I’d be willing to bet that few of them would agree to sell for that price.

Courtesy The Dallas Morning News
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