(FORTUNE Magazine) – Michael Dell--the 32-year-old founder of Dell Computer and, with an estimated net worth of $5.5 billion, the richest man in Texas--is probably unhappy with his local paper. The big Dell story in Austin is the feud between Dell and a county property-appraisal office over the value of the house he and his wife are building--and what their 1997 property tax should be. County appraisers say the new Dell home was worth $22.5 million as of Jan. 1, 1997, the date the taxes are based on. At that price, the Dells' 1997 property tax would be around $600,000. Appraisers hired by Dell say it should be valued between $5 million and $6 million, meaning a tax bill of $160,000 or so.

Why the discrepancy? Simply put, neither side can agree on how to measure the house's value. In most cases, figuring out a house's market price is easy--appraisers look at similar houses and subtract and add according to the differences. The problem with Dell's house is, there's nothing to compare it to. The next most expensive house in Austin is worth less than $4 million; casa de Dell may be the priciest house in all of Texas.

Without a comparable property, appraisers must create a market price. And so they did: $22.5 million. The Dells, however, argue the most anyone would have paid for the unfinished house would have been about $6 million. After the Dells' appeal of the valuation was rejected, they filed a lawsuit against the Travis Central Appraisal District on Sept. 3. According to court documents, the Dells charge that the district "arbitrarily placed a fundamentally wrong value on the property far in excess of its fair cash market value."

No one pretends valuing the house is easy. Set on 60 acres, the 22,000-square-foot structure is best described as Bauhaus-meets-spaceship-meets-community-college. It has eight bedrooms, 21 bathrooms, a conference room, and the requisite home gym. Austin eyebrows have been raised. "This is something you'd expect to see in Hollywood--or maybe old Dallas," says Austin American-Statesman columnist Don McLeese. Or Seattle suburbs like Medina, where Bill Gates recently built his fantasy compound, estimated at $53 million. Gates recently announced he would pay his taxes "like everybody else."

--Erin Davies