Commercial Property Tax Appeals

Property Consulting Group is a commercial property tax consulting company located in Houston, Texas. PCG’s property tax consultants are experienced professionals whose mission is to ensure that our clients are assessed at no more than a fair and equitable valuation. We have successfully performed real estate and business personal property protests through all administrative levels and achieved further reductions through ad valorem litigation support services and binding arbitration appeals.

Do you have questions about your commercial property tax assessment or the property tax appeal process? Please contact us with your name, phone number, and property address. Our commercial property tax consultants will be happy to answer your questions and address your concerns at anytime.

As a reminder, the deadline to file a commercial property tax appeal in Texas is generally May 15th.

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How Do You Estimate Property Taxes for Your Commercial Property?

For business owners, budgeting and financial strategy are a top activity at the beginning of the year, and often every quarter. As part of this process, it is important to include the cost of taxes in your budget planning. When it comes to commercial property, many are looking for a good way to project what their property tax liability will be for the next year. It is tricky to estimate property taxes without knowing what might impact your property in the upcoming year, and while there is no silver bullet or crystal ball, we have a few tips for you to keep in mind as you escrow internally for your future tax payments.

Track Impacts on Your Property as They Happen

A lot of planning for the year means tracking things as they are happening that might impact your tax bill. Be aware it might impact you, and budget for the possibility. These items may include:

Income Increase: Income-producing properties such as shopping centers/hotels/apartment complexes are subject to increasing revenues. When NOI (Net Operating Income) is increasing, it is great for business, but save for a potential tax increase. An increasing income, means an increased property value, making it important to be aware so that IF it does it doesn’t shock you.

Additions: If you’ve added square footage, you’ve likely increased revenue and property value. And taxes. Make sure you plan for it. This can be especially tricky when investing in an addition as you do need to allocate a budget for the increase in taxes.

Recently Purchased Property: If you’ve just purchased the property the year before and what you paid for the property is more than what the property was previously assessed at, you could be looking at a large increase in property taxes. Your purchase price could impact the newly assessed value.

Change in Vacancies: The quickest way to add value is to buy a high-vacancy building and do things to get tenants. A new management company, more marketing, or TLC on deferred maintenance can help you fill empty spaces, increasing the income produced by the property and potentially increasing the value and taxes. 

Increased Rental Rates: If you increase rental rates where tenants have been there a long time, you may drive up the value of your commercial property.  It is not a guarantee to happen right away, in fact, it might take a few years, but eventually, your value and taxes will increase. 

Be Aware of Temporary Spikes

It is important to plan for the cost of temporary spikes in revenue at your property. An example of this is when hotel owners at the end of 2017 saw a huge spike in revenue due to displaced families after Hurricane Harvey. The increase in 2017 meant they had to pay more in 2018 even though revenues dropped back down in 2018.

We urge you to stay cognizant of changes to your property every year, so you can plan for your property taxes. If you do get a valuation that is not accurate, we would be pleased to help you protest your property taxes. Just make sure you reach out to us before the May 15th deadline. 281-880-6500

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