Fixing Property Assessments

What If Homeowners Set Their Own Values?

Picture this: You live next to a major highway, but the county assesses your property value using comparables from quiet interior streets. Meanwhile, lakefront mansions worth $10 million are assessed at $2-3 million, paying a fraction of their fair share in taxes. Sound familiar?

As an example of what goes on, let’s look at 2008 Scenic Dr in Austin, Texas. I don’t know and have nothing against the owners. What I do know is they own a lovely lakefront property miles from downtown Austin.

The 2025 market assessment is $3.428 million for this Tarrytown lakehouse, just a few miles from downtown. Here is the lot for sale next door at 2002 Scenic.

And here are 2002 Scenics' last few years of property tax appraisals.

So it’s $11M to buy the lot, but the current owners are only assessed at a value of $3.825M? Give me a break. This broken system got me thinking about a possible solution: What if property owners had to set their tax valuations, but with a market-based catch to keep them honest?

The Core Idea: Self-Assessment with Market Accountability

Here's the proposal: Property owners declare their own property values for tax purposes. But there's a twist—anyone can make a binding offer to purchase the property at 30% above the declared value. If the owner rejects the offer, they face a "make good" penalty that brings their tax assessment closer to true market value. In my example above, somebody would have a $4.5M offer on the undervalued lake house by the end of the day. In fact, I suspect a bidding war would push the value up closer to $8M very quickly. ($3.4M is $92.2k in taxes and $8M is $217.7k in property taxes. Travis County/Austin is losing $125k a year on this single lake house.)

My idea isn't about forcing people from their homes. It's about creating honest valuations through market pressure while preserving ownership rights.

How It Would Work

The Escrow System

To prevent bogus offers designed to harass homeowners:

- Buyers must fully escrow their offers—the money is locked up and committed

- Offers can only be made during Q1 of each year ("valuation season")

- All offers and rejections become public record, creating transparency

The Two-Tier Protection System

Not all properties are equal, so neither should be their protections:

Primary Residences:

- Require 40% premium over declared value (not 30%)

- 60-day response window to consider offers

- "Make good" penalty capped at 1 year of tax differential

- Existing homestead exemptions still apply

Investment Properties:

- 25% premium required

- 30-day response window

- Penalty equals 3 years of tax differential

- Less protection encourages accurate commercial valuations

The "Make Good" Penalty

When an owner rejects a valid offer:

1. Their property is automatically reassessed to the offered amount

2. They owe back taxes on the difference (capped based on property type)

3. Hardship appeals available for primary residences and seniors

Anti-Speculation Measures

To prevent the system from becoming a tool for property flippers or developers:

- Properties purchased through the valuation challenge system face a 3-year resale restriction

- During this period, they can only be sold at or below the purchase price plus inflation

- Preservation requirement: The property must be maintained in substantially the same condition

- No demolition, gutting, or major structural changes allowed

- Only repairs necessary for safety, code compliance, or basic habitability permitted

- Renovations limited to cosmetic updates and system maintenance

- Major modifications trigger automatic forfeiture with property reverting to original owner at original tax value at the original owner’s discretion

- Violations monitored through building permits and neighbor reporting

- Exceptions only for documented safety hazards verified by city inspectors

- This ensures offers are made by those genuinely valuing the existing property, not land speculators or teardown developers

Addressing the Challenges

"What if I don't know how to value my home?"

The same assessors currently setting values could provide free consultations. Private appraisers would flourish. Online tools would improve. December would become "assessment season" as homeowners research comparables before the Q1 offer window.

"Won't wealthy buyers prey on mistakes?"

Several safeguards prevent this:

- The premium requirement (30-40%) provides a substantial buffer

- One-year grace period for new purchases

- 3-year resale restriction prevents quick flips for profit

- Strict preservation requirements prevent teardown speculation

- Public disclosure of all offers deters predatory behavior

- Primary residence protections shield homeowners

- Community right of first refusal could be added

"This sounds like forced sales with extra steps"

Crucially, no one is ever forced to sell. The penalty for undervaluation is increased taxes, not loss of property. You keep your home but pay taxes based on what the market says it's worth—exactly what should happen anyway.

Furthermore, the preservation requirements ensure this can't be exploited by developers looking to assemble lots for mega-projects or gentrify neighborhoods through teardowns.

Why This Could Work in Texas

Texas already has:

- Homestead exemptions

- Over-65 property tax freezes

- Caps on valuation increases

All of these protections could integrate seamlessly with market-based valuations. In fact, they'd work better—protecting long-term residents while ensuring lakefront mansions and commercial properties pay their fair share.

The Benefits

1. Accuracy: Market forces reveal true property values better than any assessment algorithm

2. Efficiency: The government can spend less time arguing with its citizens about the value of their homes

3. Fairness: Undervalued mansions can't hide behind outdated assessments, houses on the interstate can set more accurate values

4. Transparency: Public offers and rejections create an open market for tax valuations

5. Flexibility: Owners control their tax burden but can't game the system

6. Revenue: Cities capture tax revenue from properties currently flying under the radar

7. Stability: Resale restrictions prevent speculative flipping, ensuring the system serves its tax fairness purpose rather than enabling profiteering

8. Preservation: Strict anti-demolition rules prevent the system from accelerating gentrification

The Bottom Line

Our current property tax system is broken. It overtaxes some while letting others coast on antiquated valuations. This market-based approach aligns incentives: set your value honestly and nothing changes; lowball it and face market reality.

By combining self-assessment with market accountability, we can create a fairer system that respects property rights while ensuring everyone pays their share. No forced sales, no assessment surprises—just honest valuations backed by real market data.

The technology exists. The protections can be built in. The question is: Are we ready to trust markets and homeowners more than bureaucratic assessments?

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*What do you think? Could this work in your community? What additional protections or modifications would you suggest?*