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How To Buy Property in Koh Samui, Thailand?Thailand is becoming one of the top travel destinations in the world…With an eclectic mix of remote tropical islands, vibrant bustling cities, tantalising food & exotic fruits, entertainment options and wonderful welcoming people.Koh Samui Fun Facts!
Koh Samui is otherwise known as ‘Coconut island’ – with its coconut infringed coastline.This emerald gem in the South Gulf of Thailand is the second biggest island in the country and rapidly becoming one of the most sought after destinations with holiday makers and investors alike.Koh Samui is surrounded by abundant lush greenery and stunning natural beauty, with a relatively short stormy season compared to other islands, leaving about 10 months of ideal climate for sightseeing, sun-bathing, adventure-seeking or whatever your heart desires!The island also has one of the most charming International Airport in Thailand; providing an array of direct flights to Bangkok, Hong Kong, China, Singapore and others, making it highly convenient to travel to this peaceful heavenly paradise.If you’ve never visited the island before, beware… you may fall under the hypnotic spell of Samui’s Secrets.The increasing popularity of the island as a top tourist destination has given rise to a great number of foreigners looking to buy property in Koh Samui.In order to protect the island’s natural beauty and beaches, much of the land on Koh Samui is protected by the government, thus meaning that construction is often prohibited.The demand and desire for property ownership on this idyllic island is rapidly rising, whether it be for a lifestyle investment, a holiday retreat or for a permanent residence. New luxury villas are now a hot property!Thailand property ownership laws are naturally designed to curb potential over-development, as such one must be flexible, patient and prudent in buying a property.So before you part with your hard-earned cash and collect the keys for your new Koh Samui property, you will want to research & plan in order to make the most informed and secure property purchase.Thailand Property Ownership Explained
In Thailand, to own land directly in a foreigner’s name, is prohibited. But wait – your dream of owning a property on Koh Samui is still possible!Buying a property in Koh Samui, involves a careful understanding and choice of property ownership options, whether it be leasehold or freehold. This is the first ‘T-junction’ decision you will have to make early on in the buying process.Leasehold Ownership is the most common, cheapest & convenient option for foreigners to own property in Thailand.A foreigner can legally lease land for a maximum tenure of 30 years. This 30 year lease can further be renewed or extended depending upon the contract between the buyer and seller.Another option is foreign freehold ownership. As a foreigner you can legally purchase the freehold of a condominium unit, providing it falls within the 49% quota of the total units in a condominium project.Foreign condominium ownership maybe one of the safest and easiest ways to directly own a freehold title deed (known in Thai as ‘Chanote’).But what if you need a larger detached property with multiple bedrooms and a garden?Freehold Ownership of land or houses can also be owned directly in a Thai person or partner’s name, or via a Thai limited company.Foreigners can set-up Limited Thai companies, partnering with local Thai citizens, and with the right company structure they can be the owner of the company, and in turn have control over the land and property itself.Further security provisions can be put in place to protect the foreign company owner, for example; placing the building in the foreigner’s personal name and also forming a ‘lease-back’ on the land from the company to the foreign owner.This prevents the sale of the land whilst a loan/lease is still valid.Working with Koh Samui Real Estate Agents
As with many things in Thailand, there is a multitude Real Estate Agents in Koh Samui, but finding a reliable one is not always easy.Many real estate agencies operate purely online, with no office and sometimes with no registration. This can be risky, incase problems do arise within a purchase and it becomes hard to track down the firm or the individuals.Hence, it is recommended to choose an established property agency, preferably with a local office and team of experienced professionals, to maximize your chances of finding the perfect property and minimize any problems arising in the future.Generally properties in Koh Samui are often negotiable in price, with larger discounts more common on older ‘resale’ properties, whereas smaller discounts of around 1-5% are common on new projects.However a skilled agent should know how to negotiate smoothly on your behalf to get you the best price possible on the market.They should also provide preliminary property checks, such as checking access roads, title of ownership and what is included or excluded in the offer.However fundamentally the details of these legal checks should be performed by an independent lawyer, prior to signing final contracts.So choose your agent as carefully as you would choose your property or lawyer! An experienced and Koh Samui Real Estate Agency should help you navigate your property purchase, as smoothly as possible.How to choose the right Koh Samui Property?
With such a wide selection of properties available in the Koh Samui Property market, it might seem confusing when making a decision on which property to select.Before you engage with services of a local Real Estate Agency or legal firm, make sure you do your own research. Drive around and get to know the lay of the land.- Which areas seem the safest for families?- Which areas are most popular for rentals or private living?Remember, these are personal preferences, so travel around the island and do your own research.After choosing a Real Estate agent, it is recommended to visit the properties if possible and at different times of day or night.Ask as many questions to yourself and to your agent as possible:- What are the cost of maintenance fees? Are there any ‘caps’ on its increasing cost?- What are the sinking fund costs? Are there rules on ‘top-up’ of sinking fund costs in future?- Are there local amenities, such as schools, shops, hospitals & banks close by?- Is the property quiet at night-time? Is there a noisy restaurant or cockerel next-door?Try not to feel pressured by any agent, developer or owner, even if it is the last property left in the project – take your time, ask questions, conduct revisits, talk to other owners, until you feel completely satisfied to make a deposit on the property.A correctly drafted reservation agreement should cover you against a refund of a deposit paid, if legal due diligence checks do not pass.Be sure your deposit is ideally held by the lawyer or agency – preferably not directly to an owner or to a developer, until your lawyer has completed the checks.After legal checks are complete and you are ready to move forward with the purchase of your dream Koh Samui Property, a carefully worded Sales & Purchase Agreement should be drafted by your lawyer.This contract should cover everything including: the names of both the parties, property address, price and Chanote number of the land, associated costs, payment structure etc.When dealing with local Thai owners it is advised to leave this to a professional, as they can easily misunderstand or become offended due to different cultural idiosyncrasies.After all contracts have been signed and payments have been made you are finally ready for the transfer of ownership and to collect the keys to your new dream home!Final ThoughtsWhilst it is not always as easy to purchase property in Thailand as it may be in your own country, with the right strategy, support and informed choices it can be both emotionally and financially rewarding.After all your hard-work, it’s time sit back and savour the moment with a cocktail by the pool, in your own piece of paradise.

The media in both Bulgaria and the UK is still raving about the phenomenal investment potential of the Bulgarian property market. This hype has lead many people to invest in the market in the hope of making a fast return. Mass publicity about rising property prices lures many people to Bulgaria, but what is the reality of the situation?Quest Bulgaria takes a look at the reality of re-sales of property in Bulgaria and how much your property might be worth.Knight Frank, one of the UK’s most respected residential and commercial property consultancies, recently published a report stating that high increases in residential property prices placed Bulgaria in second place in a world table highlighting property price increases during the second quarter of 2007. The report stated prices increased by 27.1%, so does this mean my house is now worth around £44,000 more than it was when I put it on the market at the start of the year? Should I be increasing the price in line with market trends?A report by another reputable company, real estate consultants, Colliers, reported similar trends in Bulgarian property but focussed more on the fact that it was the number of buildings constructed. The mountain resorts showed 50% increases and the Black Sea coast 39%. How easy it is to read this statement in relation to prices increasing rather than that of the rate of build and to neglect the part of Colliers report, which states that overall sales prices have “remained unchanged for the past half year as supply continues to outpace demand.”The reality of the situation is that most reports measure Bulgaria’s property market success in terms of price increases or build rates and neglect the fact that in Bulgaria, the real estate market is unregulated and the seller puts the price tag on their property. The valuation process goes something like this, “Ivan across the road has advertised his house for sale at 20,000 euro, so my house must be worth 30,000 euro because it is bigger.”Another form of valuation has resulted from towns and in particular villages adopting unofficial rates. All it takes is a professional developer to move into the area and the price they charge for their properties, usually a cost per square metre, becomes the official standard.The village of Rogachevo on the Northern Black Sea coast is a prime example. Bulgarian Land Development Plc, a newly incorporated company now listed on the AIM stock market, has started the construction of a six million euro apartment and villa complex just outside of the village. The price of the property in the development ranges from between 750 to 1,200 euro per sq.m. The conclusion amongst people wishing to resell properties in the village is, “my property is now worth at least 750 euros a square metre.” The fact that property up for resale may not have the same scenic outlook, modern facilities or luxurious design is irrelevant to the sellers. Bulgarian sellers have little experience of the property market because until a few years ago there was little demand. Consequently, they are unused to working to the laws of supply and demand. Many British sellers, who hail from a mature property market are lost without the skills of a valuer and stamp a price on their resale based on the following equation:original cost + renovation costs + local market rates +desired profit =resale priceYet, as everyone who emigrated here on the lure of cheap property and a fast buck now knows, the resale market is slow and underdeveloped. Apartment blocks are shooting up at a rapid pace giving new buyers lots of choice in both price and design. Renovated houses are two a penny and who wants to buy a renovated traditional build in the middle of nowhere, when they have so many well-designed new builds to choose? At the moment, it is safe to say, that in Bulgaria, supply far exceeds demand in terms of land and property.The picture is not one of doom and gloom, but of caution rather than crash. The market is far from a crash, if it was, you would not see UK currency speculator Joe Lewis, investing 70 million pounds in the Bulgarian property market. And he is not alone, Israeli construction and investment company BSR Europe recently bought around 80,000 sq.m of land in Bulgaria for 37 million euro. Gardens Group is investing 400 million euro in a 600,000 sq.m development Lozen, a village close to Sofia.A source from Raiffeisen real estates said that most sales over the last 2 years are from re-sale clients. Most of theses people bought land or property, sat on it for at least three years and are now re-selling for profits between 20 and 50%. This is easy to achieve when looking at properties at the low end of the market; recently Raiffeisen sold a property, which the client bought for 10,000 euro and sold for 15,000, but the demand for rural renovation projects has declined. Land re-sales are lucrative if the location is good. Apparently, there is good demand for regulated land, close to the coast. Again, patience is the key. Raiffeisen have dealt with re-sellers who bought land in 2004 at 10 euro per sq.m and sold it in October 2007 for 25 euro per sq.m.British buyers have a “rising property” mentality. They expect property to increase dramatically in value as it has done over the last seven years in the UK. In this sense, they are not in tune with the rest of Europe; most of mainland Europe look at their property as their home, whereas the British view their property as a way to make money. Their foray into the Bulgarian property market has left many disappointed, because lead on by media hype, they expected the market to earn them vast profits in a short space of time as had happened in the UK. The lack of regulation in the Bulgarian real estate market has meant that the seller is in charge of valuing their own property and often they choose an inflated sales figure rather than checking actual market rates for re-sales.Property prices have increased in the last two years. Belinda Knowles (42), a trainee solicitor from Dulwich, bought her one-bedroom apartment in Golden Sands resort off-plan for 40,000 euro. It took two years to complete the project and she has just spent her first summer enjoying the fruits of her investment. A one bed roomed apartment in her block now costs 60,000 euro – a staggering growth of 50% – if she could sell her own. “I think the market is inflated by unscrupulous real estate agents. I’m certain that if I put my apartment up for sale at this price I would be left disappointed for two reasons. Why would someone buy my apartment when they can by a brand new one for the same price and if the demand is so great, why haven’t all of the apartments been sold?” Fortunately, Belinda bought her apartment as a long-term investment. “I have two teenage children and package holidays abroad were becoming ridiculously expensive. The children are also getting to the age where they would prefer to come on holiday with their friends rather than with me. I wanted to save money in the long-term by having a place abroad that the whole family could use via the low cost airline network and I wanted to be sure that it would be a safe place for my children to stay alone with their friends. Golden Sands is ideal. We get cheap flights with Wizz and British Airways from Gatwick which means we can come over more regularly and the nightclubs here are not filled with drug-taking louts, so I have no qualms about letting my kids go out.” She also knows that by the time they have out-grown Bulgaria, the apartment will yield a good return on her investment. “In ten years time, when my children have their own lives and means of support, they may not want to spend their leisure time here. I’m sure that with the rate of investment going into the country at the moment, my apartment will sell at a higher rate than I paid for it and I will have saved money in the long run by not having to fork out for package holiday fees.”Jayne from Sofia purchased a run down country house this year for 20,000 euro. “I have been quoted a further 20,000 euro to do it up and have set aside a contingency budget of 20,000 euro. I expect to be able to sell the property within two years for 70,000 euro netting me a modest 10,000 euro profit. I think this is a reasonable gain.”Assetz International Ltd, a reputable British investment company has warned its clients that growth rates of 20 -30 % in countries like Bulgaria would not continue and a cutback to a more steady and sustainable growth rate was necessary. They still labelled Bulgaria as the best place to invest in foreign property, but as early as 2005, Assetz advised caution, when investing in emerging markets like Bulgaria, “Low prices attract purchasers who are keen for a ‘quick fix’ solution to pension shortfalls, but as many agents will admit there is no guaranteed resale market in Bulgaria and little existing benchmark for measuring price increases.” Even as far back as 2005, they recommended that their clients view Bulgaria as a long-term investment rather than hoping for instant returns, sighting the fact that for a time supply would outstrip demand.Economic indicators, as we pointed out in last months copy of Quest Bulgaria, look healthy for Bulgaria and will go a long way to increasing house prices in the market, but in the long-term. What we need right now is a realistic adjustment in market prices.The key to investing in Bulgaria is; location, location, location – be reasonable, expect good returns in the medium and long term. Choose Bulgaria because it is a great place to be and you can have a home for less than the price of a dog kennel in Britain. Bulgaria still offers incredible prices compared to the rest of Europe, which will provide you with inexpensive holidays, a low cost of living, easy access, summer beaches and skiing in the winter.TIPS AND HINTS FOR BULGARIAN PROPERTY RE-SALESSupply currently outstrips demand in many areas giving buyers a great deal of choice and the potential for good prices.Don’t over-estimate the return. Expect to make good gains in the medium to long termInvest your money wisely – don’t take risks with a property portfolio if you need to make fast profits or need the moneyLocation and the type of property you buy will determine the size of your profits. So will future developments such as infrastructure, airports, cheap flights…. Research, research, research.Set reasonable prices on your resale, don’t pick numbers out of thin air or copy what others are doing. Market the best features of your property, what makes it special.Ask people you know how much they would expect to pay for your propertySit back and enjoy your property for yourself or consider turning it into a business to take the pressure off the need to re-sell.

Property taxes are one of the largest line item costs incurred by apartment owners. However, many owners do not appeal effectively. Even though owners realize that property taxes can be managed and reduced through an appeal, some view taxes as an arbitrary estimate provided by the government which can’t effectively be appealed. It tends to boil down to the old adage, “You can’t fight city hall”.Fortunately, the property tax appeal process in Texas provides owners multiple opportunities to appeal. Handled either directly by the owner or by a property tax consultant, this process should involve an intense effort to annually appeal and minimize property taxes. Reducing the largest line item expense has a significant effect in reducing the owner’s overall operating expenses. While it is not possible to entirely escape the burden of paying property taxes, it is possible to reduce taxes sharply, often by 25% to 50%.Why some owners don’t appealSome property owners don’t appeal because they either don’t understand the process, or don’t understand that there is a good probability of achieving meaningful reductions in property taxes. Some owners believe that since the market value of their property exceeds the assessed value, then it is not possible to appeal and reduce the property taxes. Although appeals on unequal appraisal are relatively new, there is a clear-cut way to appeal property taxes at the administrative hearing level based on unequal appraisal. Unequal appraisal occurs when property is assessed inconsistently with neighboring properties or comparable properties. Also, some owners are reluctant to hire a property tax consultant, even though many consultants will work on a contingent fee basis, in which there is no cost to the owner unless property taxes for the current year are reduced.Overview of appeal processThe following are the primary steps in the annual process for appealing property taxes:· Request notice of accessed value· File an appeal· Prepare for hearing. Review records. Review market value appeal. Review unequal appraisal appeal· Set negotiating perimeters· Administrative hearings· Decide whether binding arbitration or judicial appeals are warranted· Pay taxes timelyRequesting a notice of assessed valueProperty owners have the option of requesting a notice of assessed value for their property annually. Section 25.19g of the Texas Property Tax Code provides the owner the option to request a written notice of the assessed value from the chief appraiser. Owners benefit from requesting and receiving a written notice of assessed value for each property because it ensures they have an opportunity to review the assessed value. This notice should be sent on an annual basis. The appraisal district does not have to send a notice of assessed value if the value increases by less than $1,000. However, if an owner was not satisfied with a prior year’s value and the value remained the same, the appraisal district probably will not send a notice of the assessed value for the current year. In this situation, the owner might forget to protest since a notice of assessed value for the property was not received.How to file and appealOn or before May 31st of each year, the property owner should file an appeal for each property. However, while many owners are comfortable with an assessed value, in many cases there is a basis for appealing. Two options for appealing include:1. unequal appraisal, and2. market value based on data the appraisal district provides to the owner before the hearing.You can appeal by completing the protest form provided by the appraisal district and indicating both excessive value (market value) and unequal appraisal as the basis for appeal. In addition, the property owner can simply send a notice that identifies the property, and indicates dissatisfaction with some determination of the appraisal office. The notice does not need to be on an official form, although the comptroller does provide a form for the convenience of property owners. (You can access the protest form at http://www.cutmytaxes.com .)House Bill 201 – helpful informationHouse Bill 201 is the industry jargon for a property owner’s option to request information the appraisal district will use at the hearing, and to receive a copy 14 days before the hearing. The name House Bill 201 is derived from the bill used to enact the law. The details for House Bill 201 are located in sections 41.461 and 41.67d of the Texas Property Tax Code. When filing a protest, the property owner should additionally request in writing that the appraisal district provide a copy of any information the appraisal district plans to introduce at the hearing. The appraisal district will typically require the property owner to come to the appraisal district office to pick up the information and charge a nominal fee, typically $0.10 per page. While the cost for House Bill 201 requests are quite low (typically $0.50 to $2.00 per property for residential and commercial) the information is invaluable in preparing for the hearing. In addition, filing a House Bill 201 request is important because it limits the information the appraisal district can present at the hearing to what was provided to the property owner two weeks before the hearing.Preparing for the HearingStart by reviewing the appraisal district’s information for your property for accuracy. If the appraisal district overstates either the quality or quantity of improvements, this will justify a deduction. The next step is to review the information on market value and unequal appraisal provided by the appraisal district in the House Bill 201 package. If the subject property is an income property, review the appraisal district’s income analysis versus your actual income and expense statements. Consider the following areas as opportunities to rebut the appraisal district’s analysis:· Gross potential income· Vacancy rate· Total effective gross income, including other income· Operating expenses· Amount of replacement reserves· Net operating income· Capitalization rate· Final market valueMany property owners and consultants start with the actual income and expense data, and use one or two of the assumptions provided by the appraisal district. However, they primarily utilize information from the actual income and expenses in preparing their own income analysis and estimate of market value for the subject property.When comparable sales are the primary issue in determining market value, start by reviewing the comparable sales data provided by the appraisal district versus the assessed value for your property. Convert the sales prices from the appraisal district to either a per square foot or per unit basis. Then compare the sales to the per square foot or per unit assessment for your property. Sales can be helpful during the hearing.The cost approach is not typically used in the property tax hearings except for brand new or relatively new properties. If your property is new, the appraisal district will probably want to review the cost information and you probably won’t want to show it to them. In many cases, the actual cost of a property is higher than the estimate provided by the appraisal district. If this is the case, you will likely want to appeal on unequal appraisal instead of on market value. No matter how good your argument or how passionately it is expressed, the appraisal district staff and Appraisal Review Board (ARB) members tend to believe that cost equals value for new properties.Deferred Maintenance and Functional ObsolescenceAnother issue that is important for the market value appeal, and to some extent for a unequal appraisal appeal, is information on deferred maintenance and functional obsolescence. Deferred maintenance could include items such as:· rotten wood· peeling paint· roof replacement· substantial repair· landscaping updating and other similar itemsMost appraisal districts give minimal consideration to requests for adjustments based on deferred maintenance, unless the property owner provides repair costs from independent contractors. There are some exceptions where a cooperative informal appraiser or sympathetic ARB will take an owner’s estimate of deferred maintenance and make adjustments based on those costs. Most appraisers and ARB members are much more inclined to make adjustments if third-party cost estimates are provided. In addition, the appraisers and many ARB members are inclined to only deduct a portion of the total cost using the argument, “we’ve been giving a replacement reserve allowance for this item for the past years and it’d be double-dipping to deduct the whole value off it in the current year.” While this is an incorrect appraisal argument, it does tend to be the practice at many appraisal districts. The reality is, the cost of curing deferred maintenance is deducted from the offer by a prospective buyer.Examples of functional obsolescence would be a three-bedroom apartment unit that only has one bathroom, or a two-bedroom apartment that does not have washer/dryer connections in an area where those connections are common. Another example would be an apartment that has a window air conditioner in an area where central HVAC is typical and expected.Unequal appraisal analysisThe Texas Property Tax Code, section 41.43(b)(3), provides for appraising or appealing on unequal appraisal including ratio studies and “a reasonable number of comparable properties appropriately adjusted.” Virtually all unequal appraisal appeals involve a reasonable number of comparables that are appropriately adjusted. Comparables are similar properties.This is primarily because of the difficulty and cost of performing a ratio study. Historically, the position of many appraisal districts was that the property owner needed to get a fee appraisal for each comparable property and compare the market value estimated by the appraiser to the assessed value. The cost of getting multiple appraisals made this process financially impractical. Compiling a reasonable number of comparables appropriately adjusted is simple and straightforward. The first step is to choose a reasonable number of comparables. Usually four to five comparables is the typical number used at a property tax hearing, but in some cases, property owners choose ten to thirty. In some cases, there may only be one to four comparable properties that merit consideration. Most unequal appraisal presentations include three to ten comparables. The number of reasonable comparables depends on the location, type, size and age of the property. For example, there would be fewer five-year-old bowling alleys in the northern part of Harris County compared to recently built apartment complexes.After choosing a reasonable number of comparables, array them in a table format, including fields of data such as account number, net rentable area, year built, street address, assessed value and assessed value per square foot.The next step is to determine whether or not to make appropriate adjustments. For the administrative hearing, if you have truly comparable properties, most boards (appraisal review board or ARB) won’t be concerned with you not making adjustments. If you make adjustments, those would typically be based on factors such as differences in size and age compared to the subject property.You should also review the information in the appraisal district’s House Bill 201 packet on an unequal appraisal. In many cases, the appraisal districts unequal appraisal analysis will document a reduction in your assessed value! If the appraisal districts unequal appraisal analysis documents a reduction, either the informal appraiser or the ARB should make the adjustment in assessed value for you. Having the opportunity to get an assessed value reduced automatically based on the appraisal districts unequal appraisal analysis is one of the reasons to appeal every property every year.Completing Hearing PreparationAfter reviewing the appraisal district’s information on your property, the House Bill 201 package, and your market value and unequal appraisal analyses, determine the strengths and weaknesses of each approach and decide which basis of appeal provides the best opportunity for a meaningful reduction. Although appeals on unequal appraisal have clearly been the law of the land since 2003, some appraisal districts and review boards have chosen to disregard the option for unequal appraisal put forth by the Texas Legislature. Although there is litigation underway which should resolve this issue within the next year, it would be prudent to visit someone who is knowledgeable in local property tax appeals to determine whether the county appraisal district and ARB in your area are considering appeals on unequal appraisal.Set Negotiating PerimetersAfter reviewing the information, it is important to set the highest level of assessed value you will accept at the informal hearing because after you accept an assessed value, the appeal process will be complete for the year and you will not be able to appeal further.Administrative Hearing ProcessThe two steps to the administrative hearing process are the informal hearing and the appraisal review board hearing.The Informal HearingThe following procedure and rules are typical at the informal hearing:· Meet with an appraiser representing the appraisal district. You should be polite and prepared at this meeting. While many property owners are frustrated and angry at the high level of real estate taxes, the appraisal district appraiser does not control the tax rate set by various entities nor the policy regarding property taxes in the area or the state. The appraisal district appraiser is trying to execute his job in a professional manner and appreciates it when property owners work with him on that basis.· Provide the appraiser information on your property and he will review that information and information he has available.· The appraiser will likely make an offer to settle the assessed value of your property fairly quickly. You can either accept the value or negotiate further. Either way, you should know within ten to twenty minutes whether the appraiser will offer an acceptable value. If the value is acceptable, conclude the negotiation by agreeing to the value for the current year. If the value offered is not acceptable, ask to go forward with an ARB hearing.Appraisal Review Board Hearing (ARB)The ARB hearing panel consists of three impartial citizens selected and paid by the appraisal district. The age of most ARB members ranges from fifty to eighty. There is an unfortunate bias in the system since the ARB members are selected and paid by the appraisal district, but most ARB members are reasonable people who want to make appropriate decisions.Like the appraisal district appraiser, the ARB does not set tax rates or tax policy. The members are also not responsible for the effectiveness of local government. It is unlikely to help your case if you complain to the ARB members about either the high level of property taxes or the poor quality of some aspect of local government.The ARB will expect you to make your presentation in about three to ten minutes. They will typically wait patiently while you make your presentation and may have questions after you conclude. An appraiser from the appraisal district, who may or may not be the same person who attended the informal hearing, will represent the appraisal district at the ARB hearing. The appraiser will comment on the evidence you presented and will often present other information the appraisal district has available. If you requested a House Bill 201 package for your property, it substantially limits the evidence the appraisal district appraiser can offer at the hearing. The ARB members may have questions after the appraisers presentation. Then the property owner will be given a final opportunity to rebut evidence presented by the appraisal district appraiser and quickly summarize the evidence. The ARB members strongly prefer you not repeat your entire presentation at this point.After hearing the evidence, the ARB members will confer and make a decision. This decision is not subject to negotiation and they will not revise the decision if further evidence is presented. When this decision is announced, the hearing is effectively over. The ARB will send a letter two to four weeks later summarizing their decision and notifying the owner of a 45 day limitation from the date receipt of the ARB decision to either request binding arbitration or file a judicial appeal.Binding Arbitration or Judicial AppealBeginning September 2005, owners of properties with an assessed value of $1 million or less may file a request for binding arbitration. The owner must file with the appraisal district no more than 45 days after receipt of the notice of the ARB’s decision. The binding arbitration option is interesting because it includes a loser pays provision. The appraisal district pays for the arbitrator’s fee if the final value is closer to the owner’s opinion of value, and the owner pays for the binding arbitration if the final decision is closer to the appraisal district’s opinion of value. Binding arbitration was passed to provide an alternative to judicial appeals, which can be expensive to prosecute.Many owners pursue judicial appeals to further reduce property taxes. In 2005, O’Connor & Associates filed over 1,200 judicial appeals on behalf of property owners in the state of Texas. The judicial appeals can be expensive if the property owner and attorney don’t understand the process and have a plan in place to minimize the cost of legal and expert witness fees. Judicial appeals are typically successful. However, success requires cooperation from the property owner, such as providing responses to questions, documents and a deposition if requested. The judicial appeal is meaningful as an option to minimize property taxes since it reduces the base value. This is important because the appraisal district and ARB consider the base value in the subsequent year when setting the administrative hearing value.ConclusionProperty owners can generate substantial reductions in property taxes by appealing annually. Consider appeals on both market value and unequal appraisal and obtain the House Bill 201 information when preparing for the appeal hearing. Property owners should consider all three levels of appeal: informal hearing, ARB hearing and judicial appeal/binding arbitration. While the ARB hearing and judicial appeal/binding arbitration can be an intimidating process, each is straightforward once you understand the mechanics.