By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
One of the land-sellers was Perot, whose sale of a parcel to Troutt helped the district peg the price of Preston Hollow dirt at about $800,000 an acre, Gossom says. Prime hilltops are valued at about 20 percent more.
Mitchell says he needs this kind of data, not asking prices or rumored sales prices tossed around in the media, because these matters often end up in court. "These guys with this kind of property, they don't have a problem suing," he says. "Lawyers are not that big a deal to them. They sue and we go to the courthouse. The burden of proof is on us to support our figures. If we have no facts on which to base our values, we lose. We get stuck with attorneys' fees. There's no use tilting at windmills."
The need for solid information means the district will always lag behind current market prices, and even more so in the brisk big-estate market that appraisers and agents say peaked last year and is now leveling off.
The district's own price and tax value data show that the top 10 known sales in Dallas and the Park Cities averaged $5.1 million in 2000 and early 2001. Average tax valuation at the time of sale for the 10 estates was $2.74 million--just over half.
Dallas County Commissioner Ken Mayfield, who represents southwest Dallas County, says a fundamental matter of fairness is at stake, and he'd like to see the district do a better job of keeping up. "I want to be sure we're being equitable across the board," he says.
When former Texas Governor Bill Clements sold his Highland Park estate to John Muse, a Hicks partner, in early 2000, it had been on the rolls for $9 million and had not been adjusted higher for at least four years. This year, the tax district hiked the new value to $16 million, and Muse didn't object. Unlike Perot, new purchasers such as Muse get no immediate benefit from the 10 percent cap. In fact, the district's methods tend to hit the new homeowner with full values and lag in varying degrees on the rest.
Early last year, real estate entrepreneur John Amend bought "Mount Vernon," the often-mocked copy of the original that oilman H.L. Hunt built at the edge of White Rock Lake in 1929. It was valued for taxes at $3 million, a number that hadn't risen in years. The district prodded sale documents out of Amend that showed he had paid $10 million, more than three times the taxable value at the time of the February 2000 sale. The seller, and beneficiary of the low appraisal, was Ray Hunt, CEO of Hunt Oil Co., deed records show.
Mitchell and chief appraisers elsewhere in Texas say the state's nondisclosure of sales prices puts them further behind in appraisals of expensive estates than other residential property. "The Legislature says I am supposed to value the property at market value, but they conveniently forgot to put in the statutes that you must share the sales price," Mitchell says. "For the home you or I would live in, there are ample sales data. Most list through [real estate industry] multiple listings. If it's a tract neighborhood, you get the numbers for the four or five models, and they are very, very easy to appraise. None of these estates list through multiple listings and the sales prices are closely guarded. It puts us further behind the curve."
Although it tends to help only the wealthiest homeowners, disclosure of sales prices ranks somewhere along with a state income tax as an idea whose time has not, and may never, come, tax appraisers say.
The Texas Association of Appraisal Districts has introduced or tried to introduce disclosure legislation in 15 of the past 20 legislative sessions, and a bill never has been voted out of the tax-writing House Ways and Means Committee.
"At least part of the opposition has come from folks in real estate who want this information to be private. They guard comparable sales with a lot of care," says association executive director Doris Koch.
That doesn't seem to be a problem for real estate agents in the 43 states that disclose sales prices. Of the seven that don't, Texas is the only one without a state income tax and hence relies so heavily on property-tax revenue.
Robby Briggs, a Park Cities agent whose firm specializes in high-dollar property, says real estate agents have no special interest in keeping prices private. If sales prices were known, the market would be more efficient, especially in the "thin" segment of expensive homes, where prices move up and down quickly, he says. "It would educate sellers. A lot of times, I'm the one paying for the advertising and carrying the property until the seller gets realistic."
Briggs, who has been in the business for 21 years, says tax appraisals are only one of several reasons property owners don't want public disclosure of sales prices. The other is they don't want a public record of what they paid because they believe it could put them at a bargaining disadvantage when it's time to sell.
In Austin, chief tax appraiser Art Cory says that there is a lot of opposition to sales-price disclosure, "but I don't know why. It seems to me everyone would be better off if we had the tools to do the job. But I had one guy in the Legislature tell me, 'If it's good for the tax district, it's gotta be bad.'"