Questions? (713) HOMETAX info@hometax.com

Binding Arbitration, Explained

What it is, when it makes sense, what it costs, and what to expect.

THE SHORT VERSION

A State-Run Second Look at Your Value

When a property tax protest ends at the Appraisal Review Board (ARB) and the resulting value is still higher than the evidence supports, Texas law provides one more step: binding arbitration.

Binding arbitration is a formal appeal decided by an independent, state-appointed arbitrator rather than the appraisal district. It was created by the Texas Legislature and is administered by the Texas Comptroller of Public Accounts, the state agency that oversees the property tax system. The arbitrator is a licensed professional, typically an appraiser, real estate broker, attorney, or CPA, drawn from the Comptroller's registry. They do not work for the appraisal district, and they do not work for us.

In other words: this is not a loophole, a gimmick, or an upsell. It is the state's own process for giving property owners a practical way to appeal an ARB decision without going to district court. You can read the State's overview on the Texas Comptroller's website.

WHEN IT MAKES SENSE

Why We'd Suggest Going Further

We don't suggest arbitration on every case. We suggest it when the hearing outcome landed above what our evidence supports, and a fresh, independent set of eyes has a real chance of getting the value lower.

Sometimes we'll recommend it strongly. Other times we'll offer it as an option: a case where we see a decent shot at a more favorable outcome, but not a sure thing. Either way, we are candid about the odds in your results email, and an additional reduction is possible but never guaranteed.

When it's offered as an option, the decision is entirely yours, and your results email will include a respond-by date. If we don't hear from you by that date, we simply don't file, and your protest result stands as final. Nothing about your existing result is at risk either way: the reduction already secured in your protest is locked in, and the realistic worst case of an appeal is that the value stays where the ARB set it.

HOW IT WORKS

Five Steps, All Handled for You

Once you give us the go-ahead, there is nothing you need to attend, file, or manage.

1

The ARB Issues Its Written Order

A few weeks after the hearing, the Appraisal Review Board issues its formal Order of Determination. That order is what we appeal, and it starts the State's filing window.

2

We File With the State

We prepare and file the arbitration request through the Texas Comptroller, along with the required filing deposit. The filing window is limited, which is why your results email includes a respond-by date when the decision is yours.

3

The Settlement Window

After we file, the appraisal district gets a window to settle before the case reaches an arbitrator. Most cases resolve right here, and the incentives explain why: if the case goes to a decision that lands closer to our value than the district's, the district pays the arbitrator's fee. A district reviewer looking at strong evidence will usually agree to a fair number rather than defend a weak one at the district's expense.

4

The Arbitrator Reviews and Decides

If the case doesn't settle, an independent arbitrator reviews both sides' evidence and determines the value. We present your case with the same market-supported evidence we build for every protest. You never need to appear.

5

The Decision Is Binding

The outcome is final and binding on the appraisal district. If the value comes down, the district's records are corrected and your tax bill reflects the lower value. The State refunds the filing deposit (less its $50 administrative fee) when the case settles or the arbitrator's decision lands closer to our opinion of value than to the value the ARB set. If the decision lands closer to the ARB's value, the deposit pays the arbitrator instead.

WHAT IT COSTS

Simple, and Aligned With Your Outcome

The State's deposit. Texas requires a filing deposit with every arbitration case, generally between $450 and $1,550 for residential properties depending on value and homestead status. In some cases, we front this deposit for you; your results email spells out the deposit terms for your case. The State refunds the deposit when the case settles or the arbitrator's decision comes in closer to our opinion of value than to the value the ARB set, less a $50 administrative fee it keeps on every case. If the decision lands closer to the ARB's value, the deposit is used to pay the arbitrator instead. That $50 is the one part of the filing costs that never comes back, which is why you may see it noted in your results email.

Our fee. Same structure you already know: a percentage of the tax savings we secure, applied only to the additional savings the appeal produces beyond the result already achieved in your protest. If the appeal doesn't lower your value further, there is no percentage fee.

The exact terms for your case, including who fronts the deposit and whether the $50 fee applies, are spelled out in your results email. If anything there is unclear, reply to it and we'll walk you through the numbers.

See the State's full deposit schedule

These amounts are set by the Texas Comptroller (Exhibit 7, Regular Binding Arbitration). Each deposit is simply the arbitrator's fee plus the State's $50 administrative fee.

Property type Appraised or market value Deposit Arbitrator fee
Residence homestead $500,000 or less $450 $400
More than $500,000 $500 $450
Not a residence homestead $1 million or less $500 $450
More than $1 million, up to $2 million $800 $750
More than $2 million, up to $3 million $1,050 $1,000
More than $3 million, up to $5 million $1,550 $1,500

Binding arbitration is available for residence homesteads of any value, and for other property with an appraised or market value of $5 million or less. Source: Texas Comptroller.

TIMING

What to Expect While It's In Progress

Most arbitration cases are resolved before tax bills go out in November, and often much sooner. Many settle within weeks of filing. From filing, the full process can take a few months, and some stretches of that are simply waiting on the State's queue and the district's response windows.

During those stretches, no news is normal, and it doesn't mean your case has stalled. You can check the status of your case anytime in your client portal at hometax.com/portal, and we reach out the moment there is a result to report.

Arbitration Questions, Answered

Yes. It was created by the Texas Legislature and is administered by the Texas Comptroller of Public Accounts, a state agency. The decision is made by an independent arbitrator from the Comptroller's registry, not by the appraisal district and not by HomeTax.

It exists specifically to give property owners a practical way to appeal an ARB decision without hiring a litigator and going to district court.

Arbitration challenges the value the ARB set. The realistic worst case is that the value stays where the ARB left it and the filing deposit is not recovered.

The reduction already secured in your protest is not undone by filing the appeal.

Appraisal districts often set a recent purchase aside when their models flag the price as "atypically low" for the neighborhood, and review board panels tend to defer to the district's own comparables instead of the actual transaction. It is one of the most common reasons a protest ends above a documented purchase price, and it is not a reflection of your case.

Arbitration is the remedy: an independent arbitrator weighs the sale itself, with the closing documents, rather than the district's screening of it. In practice, these cases often settle in the district's own review window once the documents are in front of someone with settlement authority, because the district bears the arbitration costs if it defends a number that does not hold up.

No. Once you authorize the appeal, we prepare the filing, build the evidence, and handle the settlement discussions and the arbitration itself. The deposit is handled per the terms in your results email.

You never need to appear at a hearing or speak with the appraisal district or the arbitrator.

No. When we offer arbitration as an option, the decision is entirely yours, and your results email includes a respond-by date.

If we don't hear from you by that date, we don't file, and your protest result stands as final. No reply is needed if you'd rather leave it there.

The State keeps a $50 administrative fee out of the filing deposit on every arbitration case, win or lose. It is the Comptroller's processing charge, not a HomeTax fee.

When we front the deposit for you and your terms call for it, that $50 is passed through at cost. Your results email states whether it applies to your case.

Your protest result stands, and there is no percentage fee, because our fee applies only to additional savings the appeal produces.

Deposit terms vary by case; your results email spells out who fronts the deposit and what is at stake for yours.

Most cases are resolved before tax bills are issued in November. If a case concludes after bills go out, the tax office corrects the bill or refunds the difference once the lower value is final.

Sign in to your client portal at hometax.com/portal. Your property's page shows where the appeal stands, and we reach out as soon as there is a result to report.

Questions About Your Specific Case?

The fastest path is to reply to your results email, since it has your case details attached.

You can also email info@hometax.com or call 713-466-3829.

Follow Your Case
in the Client Portal

Status, documents, and results for every property, all in one place.

Client Login