REAL ESTATE
Property Tax Lawsuits
As discussed in Chapter 7 of our publication When to Buy and When to Sell: Combining Easy Indicators, Charts, and Financial Astrology (available on Amazon), and several previous blogs, the purchase of a home may be one of the biggest decisions, and investments, to make in one’s lifetime. Over the last few years, it has never been more difficult for young buyers, with rising inflation, property prices, and property taxes/insurance, and the situation appears to be only getting worse, with an increasing number of defaults and foreclosures.
We have consistently mentioned the issue with property taxes, including the unfair increase based on perceived value, which is our specific focus of today’s discussion.
Property taxes have been a “point of contention” for decades. Originating back in the Colonial Era, property taxes were established as a basic funding for basic public services and military purposes. Real Estate was chosen as the primary target, as it was considered fixed, visible, and easy to value, and was the subject of revolt. In the early 1800’s. states began requiring property to be taxed equally, according to its value, a concept known as “ad valorem.”
Currently, though the concept is reportedly the same, they are now tied to district school bonds, used to pay for large building projects. Unfortunately, the interest to pay the bond investors is derived from the periodic hike in property taxes, which also increase with the rising “market value” of a property, ignited by buyer over-bidding and “unrealized” gains for properties that have not been sold. In many instances, the formula for valuation is not always transparent, and there have been fraudulent practices including over-valuations.
Over the past couple of years homeowners have started to protest these taxes, and a county in Texas has become the epicenter of the complaints, including an increasingly publicized lawsuit, directed by Real Estate expert Mitch Vexler. Following is an overview of this issue…
The property tax lawsuit involving Mitch Vexler centers on a sweeping challenge to how the Denton Central Appraisal District (DCAD) in Texas administers and enforces the state’s property tax system. Vexler, along with several other Denton County property owners, argued that DCAD and its chief appraiser violated constitutional and statutory requirements in the way their properties were assessed and how tax remedies were structured under Texas law. It also asserts that Texas’s exclusive-remedies provision (Texas Tax Code § 42.09) effectively blocks property owners from obtaining meaningful judicial relief and/or proper disclosures.
Vexler and the other plaintiffs also contend that the administrative appeal process was inadequate because the designated tribunal lacked authority to grant the prospective relief they sought, particularly their challenge to the constitutionality of Section 23.01(b), which governs appraisal standards. They also pursued declaratory and injunctive relief, alleged ultra vires actions by DCAD officials (when a government body oversteps the legal scope of their authority), and sought damages and attorney’s fees.
The trial court dismissed the case after DCAD and Spencer filed pleas to the jurisdiction, arguing that the plaintiffs failed to use the exclusive statutory remedy and lacked standing to challenge the constitutionality of the appraisal statute. The Second Court of Appeals of Texas affirmed the dismissal on May 1, 2025, holding that the property owners had not followed the legislatively mandated process and that the courts lacked jurisdiction to hear their broader constitutional claims.
Stay tuned as Vexler and the other petitioners escalated the matter to the U.S. Supreme Court, filing a petition for certiorari in August 2026, and await a conference scheduled for September 28. Their petition raised two significant due‑process questions:
· Whether a state may require an administrative remedy as the exclusive path even when that tribunal cannot grant the relief sought.
· Whether a federal due‑process objection becomes timely only after the state’s highest court denies rehearing, thereby completing foreclosure of all state remedies.
Recently, the Governor of Texas appears to have stepped in to possibly remediate the situation, though that process is also in question. This case is a notable example of property owners challenging the structural limits of state tax‑appeal systems. It highlights a broader tension between administrative exclusivity and constitutional access to court, an issue with implications far beyond Denton County.
Rhode Island has also introduced an additional tax, referred to as the Taylor Swift Tax, based on additional charges for non-occupied properties valued over $1 million. The constitutionality of this law is also being challenged by over 40 home owners in the state.
Go to mockingbirdproperties.com and the Real Estate Mindset U-tube channel for further information.
Though there are always the possibility of unforeseen circumstances, when considering the purchase of a home, it may be very wise to extend the normally excepted amount of savings (6 months) with the ever-rising costs related to home ownership, to prevent (as much as possible) the situation of being unable to afford the property taxes/insurance, once the property is purchased. As always, we recommend consulting with a financial advisor, and possibly a real estate professional, when making such an important decision.
Please visit the website www.augustassociatesllc.com for home values, listings, and professional assistance.
***As always, this information is not intended to be financial advice, or any specific buy or sell recommendation, but rather a guide to assist the reader in some further understanding of current economic conditions.
