Property Taxes

Property taxes are generally the largest single line item expense for commercial properties.  In Texas, appraisal districts are required to assess properties at 100% of their market value.  It is important to review the annual proposed values that are generally mailed out in April of each year by the appraisal districts in Texas.  The protest filing deadline is usually May 31st of each year.

Not only should the market value be reviewed but one should also make sure the property is being appraised equally and uniformly with other similar properties.  This process has become increasingly more complicated in the past several years causing more and more property owners to turn to professional tax consultants.  A tax consultant can assist owners with this annual review, can appeal appraisals and can negotiate a fair value for their properties.

2009 appraisals proved to be a challenge.  The turmoil in the financial markets beginning in the fourth quarter of 2008 caused fewer properties to be sold.  This lack of sales made it difficult to prove what the properties were actually worth on January 1, 2009, which is the appraisal date by law.  The appraisal districts typically were still using 2007 and early 2008 sales to value property.

Since the appraisal districts base their values off of these older sales, they typically lag the actual market by one year or more.  With expectations continuing to decline for the remainder of this year and into 2010, serious analysis of the property tax burden will be necessary.

Written By:
Jeff Nanney
Texas ProTax Austin