How Property Value Is Determined in Texas

The January 1 snapshot

With few exceptions, Texas appraisal districts must appraise taxable property at its market value as of January 1 of each tax year. Who owns the property on that date, and market conditions on that date, drive whether the property is taxable and at what value. Market conditions later in the year do not re-open the January 1 value.

Mass appraisal, not a house-by-house inspection

Appraisal districts value every parcel in the county — over a million properties in large counties — so they use mass appraisal: valuing groups of properties as of a common date using standard methodology, shared data, and statistical testing. Properties are classified by factors such as size, use, construction type, age, and location. Recent sales data is used to value typical properties in each class, and the district's model is then applied to individual properties. State law requires districts using mass appraisal to follow Uniform Standards of Professional Appraisal Practice (USPAP) and to use the same methods for similar properties.

The practical consequence: your value is produced by a model that treats similar properties similarly. That is efficient, but it also means the model can miss things that make your property different from its class — which is exactly the kind of issue a review can surface.

The three appraisal approaches

Districts commonly use one or more of three approaches, depending on the property type:

• Sales comparison (market) approach. Compares the property to similar properties that recently sold, adjusting for differences. Typically preferred for single-family homes and vacant land when sales data is adequate.
• Income approach. Values a property based on its expected income stream. Suited to apartments, retail, and office properties.
• Cost approach. Estimates what it would cost to replace the improvements, applies depreciation, and adds land value. Used where sales and income data are scarce, for unique properties, and for new construction.

Reappraisal

State law requires appraisal districts to reappraise all property in their jurisdiction at least once every three years, though many review values more often.

What this means for you

Because your value comes from a mass-appraisal model, two checks matter: whether the model's characteristics for your property are right (square footage, condition, features), and whether the resulting value is consistent with genuinely comparable properties. The assessment checker is built around exactly those two checks.

Worked example (illustrative)

Illustrative example with made-up numbers — not a valuation and not a real property.

1. Inputs: the model values homes in your class at about $185/sq ft of living area (illustrative class average). Your record shows 2,000 sq ft. Model-indicated value: 2,000 × 185 ≈ $370,000 — which is what appears on your notice.
2. Step — check the characteristics: your actual living area is 1,750 sq ft; the record overstates it by 250. At the same class rate: 1,750 × 185 ≈ $324,000. A $46,000 discrepancy from one wrong fact.
3. Step — check the rate: even with correct square footage, $185/sq ft might be high for your specific condition or location within the class — that is where comparable-property evidence comes in.

What this tells you: in mass appraisal, a factual error in characteristics flows straight into value, and the class rate itself can be argued with comparables.

What it does not tell you: the actual class rate your district uses, whether your record is wrong, or what value an ARB would accept — those require your notice, your district's records, and evidence.