3 Reasons Your Commercial Property Tax Value Might Not Be Accurate

March 9, 2022 |

Anyone who owns a commercial building has experienced it: a property tax assessment arriving in the mail that simply can’t be right. You know what you paid for your property — and the amount of work you’ve put into it — but the numbers don’t add up. Inflated rates aren’t an indicator that the appraisal district has it out for you. Instead, they’re most often the result of an imperfect appraisal system. Read on to understand a few likely reasons your property tax bill is higher than it should be.

All Properties Are Created Equal with Mass Appraisal Systems
County appraisal districts (CADs) assess values for all commercial properties annually. That can be a monumental task, especially for communities as large as Texas’ Harris County. To streamline the process, appraisal districts use a system that evaluates a large number of similar properties at once. In other words, your property is likely being lumped in with new structures in pristine condition, as well as older buildings that require some TLC, and that can result in an assessed value that doesn’t make sense.

Your Property Has Suffered Damages that Haven’t Been Reported
Whether a natural disaster such as flooding has wrought havoc on your building, your structure was the victim of vandalism or simple wear and tear means your property needs work, there’s a high probability those flaws weren’t factored into your assessment. Any of the aforementioned issues is likely to impact your assessed value. But, as was mentioned above, your property is being considered among others in near perfect shape.

System Flaws Fail to Recognize Information Shared in Previous Years
A frustrating — yet common — occurrence for any commercial property owner who’s successfully protested their value is the likelihood of that assessed value creeping up the following year. This is despite the meticulously gathered documentation and carefully presented case laying out why the property was previously overvalued. And it all goes back to that mass system. Until a metaphorical switch is flipped on the CAD’s end that tells the system your commercial property should be valued at less, you’ll continue to see inflated values. Flipping that switch can take years, if it happens at all.

The best way for a commercial property owner like you to sidestep unfair values is to protest your property tax value annually. Protests are successful in reducing a commercial tax bill more than 50% of the time, and success rates are better when you have a professional team on your side. If you have questions on any of the above, or if you’re interested in learning how Lane can help lower your commercial property tax bill, please reach out. We’re here, and we’re glad to help.

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