I don’t know why Ronald Unkefer is selling his house. But I do know that he retired last year from the company he founded, First Broadcasting, to focus on his private equity firm. I imagine Unkefer—who should have a daughter named Aida, if he doesn’t—sitting in his study, thinking, “What do I need with 9,000 square feet? I can’t even remember the last time we used that fourth fireplace.” Or maybe he’s upgrading. Only Ellen Terry knows for certain what motive for selling lurks in the heart of Unkefer.
I bring this up because Unkefer’s listing was the most expensive I could find on the market. He’s asking $14,995,000 for his Highland Park home. (Potential buyer to Ellen Terry: “We’re looking for something under $15 million.” Ellen Terry to buyer: “I’ve got the perfect property!”) The asking price is interesting because the place is valued on the tax roll at only $8,366,190. If the house sells for the asking price (let’s be honest; Unkefer would take $14,500,000), and ignoring homestead exemptions, that means the Dallas Central Appraisal District has failed to capture about $121,141 annually in taxes on that single residential property.
On the commercial side, the discrepancies between true market value and the tax roll are often far larger, as we all learned with the recent flap over the convention center hotel. Chavez Properties owned a plot of land that was assessed at $7.5 million but offered it to the city for $41 million, which prompted the appraisal district to spit lemonade everywhere, soil its britches, and then reappraise the land at $36.5 million. Lost annual taxes: $730,800. The appraisal district went on to have a hard look at most every property downtown.
Some have called for mandatory disclosure of all real estate sales prices, which Texas does not now require. But I’ve got a better idea for reforming the appraisal process. Like most of my good ideas, I stole it. This one came from our back-page columnist, Marty Cortland, a scholar if not always a gentleman.
Why not let everyone self-assess his property’s value? Unkefer, for example, could declare that his house is worth only $8 million and save himself that hundred thou or so a year in taxes. But under my plan—let’s call it the Caveat Mendax Plan (let the liar beware)—the catch is, if someone offered him $8 million, Unkefer would be forced to sell. The CMP would therefore create a huge increase in the overall value of the tax roll, as folks like Unkefer and Chavez Properties assessed their properties more in line with their true market values. And the increase would come not just from the high-end properties.
My own humble abode, for example, is valued at $231,260—unlike Unkefer’s, an assessment pretty close to its market value. I like my house and don’t care to move anytime soon, so I’d probably assess it at, say, $400,000. If someone really wants my house, or if Unkefer, out of spite, wants to force me out of it, I’m happy to take $400,000.
The real genius of the CMP is that by raising the overall value of the tax roll, the tax rate could be lowered. I could wind up paying about the same amount I am now, but Unkefer—taxed at a lower rate but on, say, a $16 million valuation—would pay something much closer to what he should have been paying all along. The state could get out of the appraisal business, and the system would be far more equitable.
No doubt a refinement or two would improve the Caveat Mendax Plan. Perhaps everyone should get one mulligan on a forced sale, a chance to raise his valuation (with a penalty). Seniors might deserve some special protection. I leave those details to the very capable Marty Cortland. Me, I’m just an idea man.
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