Every business has a need to spend less money and earn more. While some expenses fall in the category of “you have to spend money to make money,” others just feel like a waste. When it comes to property taxes, spending more certainly doesn’t earn you more, so it is essential to be sure you only pay a fair share of taxes based on fair property valuation. We advise most commercial property owners to protest their property valuation on an annual basis to avoid paying more than necessary. The efforts can save a business big, especially in a year where valuations increase substantially year-over-year.
In the Houston market, the thriving economy has property values on the rise. The continued rise in property values has some property owners facing larger tax bills every year. At the end of 2018, we heard from such a property owner who had just received a very large tax bill. A mix up with a different tax consultant meant a tax appeal had not been filed when it should have been.
120% Increase in Taxes in One Year!
The HCAD valued the property in question at a 120% increase over 2017. This meant the business owner was facing a tax bill that was 120% higher in just one year. The surprise hit them hard as they were unaware of the proposed increase to their assessment.
In addition to coming up with a large amount of capital to pay the bill, the business owners would have had to raise costs for tenants to cover it. The increase would have been problematic for many of the tenants and could have potentially caused lost revenue.
After our initial meeting, we were able to file a correction appeal on behalf of the property owners.
What is a Correction Appeal?
A correction appeal is a process by which a property valuation can be appealed after the May protest deadline. A correction appeal is more complex because the rules and criteria are more rigid than a normal property tax appeal making it difficult to navigate. The deadline for a correction appeal is the tax delinquency date which falls around February 1 of the following year.
Our staff of property tax experts were able to attend the hearing on behalf of the client. We were able to get their tax bill lowered by $185,000.
Every property is different, and every case is different. This property is quite large and faced a huge increase in valuation, making the numbers quite dramatic. But any savings in your commercial property tax bill provides more capital that can be used to invest in your business. As the Houston real estate market continues to thrive, more commercial properties will be facing large valuation increases. Make sure your property value increase is fair by engaging with a property tax consultant before the May 15th property tax protest deadline.
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