What is binding arbitration for a Texas property tax appeal?
What is binding arbitration for a Texas property tax appeal?
If you lose at the ARB, Texas lets you appeal through binding arbitration for a residence homestead or any property valued at $5 million or less by filing a request with a refundable deposit within 60 days of the ARB order — usually cheaper and faster than going to court.
Binding arbitration is a low-cost alternative to a lawsuit when the Appraisal Review Board's order leaves you unsatisfied.
Who qualifies. Under Tex. Tax Code Chapter 41A, you may appeal an ARB order through binding arbitration if the property is your residence homestead (under Tex. Tax Code §11.13), or the ARB-determined appraised or market value is $5 million or less. Most homeowners qualify on both counts. Arbitration covers determinations of value and unequal appraisal — not exemption or other non-value issues.
The deadline. You must file your Request for Binding Arbitration with the appraisal district within 60 days after the ARB order is delivered to you. Miss it and arbitration is no longer available.
The deposit. You file a deposit (by check or money order payable to the Texas Comptroller) that is refundable if you win. As confirmed by the Texas Comptroller's arbitration program, the residence-homestead deposit is $450 if the value is $500,000 or less and $500 if it is more than $500,000; non-homestead deposits scale up with value (from $500 to $1,550). The Comptroller retains a small administrative fee; the rest funds the arbitrator and is returned to you if the arbitrator's value is closer to your number.
How it works. An independent arbitrator from the Comptroller's registry hears both sides and issues a binding award. There is no jury, the process is informal, and you can usually appear without an attorney. The arbitrator's decision is final and not appealable on the merits.
Arbitration vs. district court. Both are post-ARB options:
- Binding arbitration — lower cost, faster, no lawyer needed, but capped at $5M/homestead and the award is final.
- District court appeal under Tex. Tax Code §42.01 — available for any property, filed within 60 days of the ARB order, but slower and typically requires counsel.
Bottom line: for a residence or sub-$5M property, binding arbitration is usually the better escalation path. Calendar the 60-day deadline the moment your ARB order arrives, and confirm the current deposit tier with the Comptroller before filing.
Also asked: Texas property tax arbitration after ARB · binding arbitration property tax Texas homestead · how to appeal Texas property tax decision after ARB loss