If you’re wondering how you can still lower your commercial property taxes after failing to settle on a lower property value in the formal Appraisal Review Board (ARB) hearing, the answer lies in property tax litigation or arbitration. These two options are the final steps in working with your county appraisal district to correct your excessive tax bill. Keep reading to learn about the benefits of these additional options rather than giving up until next year.
Property Tax Litigation
When considering arbitration and litigation, litigation may be the more difficult option to pursue. Typically, this process is reserved for properties that are being assessed at more than $5 million, and the value discrepancy is more than $200,000. However, litigation is still a viable option for properties that have experienced a dramatic increase from the previous year. Overall, litigation tends to be a more time consuming and expensive alternative to binding arbitration. The process typically takes anywhere from a year to more than two years, at a minimum. Litigation is also more formal, requiring multiple in-person meetings to work towards settling the case.
The Litigation Process
In Texas, you must file a litigation lawsuit within 60 days of receiving your ARB final order from the county appraisal district, and you must pay any outstanding taxes. Litigation suits are usually settled through court-ordered mediations, settlement conferences and/or negotiated agreements. Rarely do these cases go to trial, but this is dependent on the specifics of each case and the judge overseeing them. While litigation is the more time-consuming option, the outcome is usually more suitable if it is pursued.
Binding arbitration involves an impartial third party (an arbitrator) examining facts presented by the property owner and/or their tax advocate team. Arbitration involves properties valued at under $5 million and can be more informal with the option for a teleconference or in-person meeting with the arbitrator.
The Arbitration Process
To qualify for binding arbitration, you must have no overdue taxes, file a request with the Texas Comptroller and pay the arbitration fee within 60 days of receiving the ARB’s final value decision. These fees range from $450 - $1,550 depending on your property type and value. Once your request has been approved by the Comptroller’s office, an arbitrator is selected, and a meeting is set up between your team, the arbitrator and the county appraisal district. Much like an ARB hearing, both parties will have a chance to present their evidence to the arbitrator, who will then determine the final value after reviewing all the information provided to them.
Within 20 days of hearing the case, it’s up to the arbitrator to make a final, binding ruling on whether or not to lower your property value. Winning an arbitration case means that the final determined value is closer to your opinion of value than the county appraisal district’s. If an arbitration case is “won,” all fees are refunded except for a $50 administration fee. You or your property tax protest team are responsible for paying the arbitration fee.
It’s a good idea to have professional property tax consultants like Lane Property Tax Advocates on your side for litigation and arbitration. Our team works hard to represent your interests in both the litigation and arbitration process, and we fight to get you the best property value without burdening you with the task of muddling through it yourself. Our team takes care of gathering the evidence, often paying the arbitration and litigation fees, preparing for the arbitration case and arguing on your behalf. With Lane by your side, you’re never alone – contact us today to start working towards the property value you deserve.