Digging Deeper: Future Outlooks and Insights into Commercial Property Tax Trends

November 21, 2022 |

Past performance can be a powerful tool in business, and the world of commercial property ownership is no exception. When you enter into a new tax year armed with info such as ongoing commercial property tax trends, not to mention a general idea of what’s to come, you can move your business ahead in a smarter, more strategic way. (You’re also less likely to suffer sticker shock when that commercial property tax notice arrives in the mail.)

At Lane Property Tax Advocates, we’re dedicated to helping you unburden your business and approach your work better informed. Read on for an overview of commercial property tax trends we’ve seen in recent years and factors that could impact your bottom line.

Digging in on Current Commercial Property Tax Trends
To better gauge what a commercial property owner might be up against in future tax seasons, it helps to understand the goings-on of the past. Here are some trends to keep an eye on.

  • Commercial Property Taxes Are Rising: This particular upward track is likely no surprise to any commercial property owner out there. After all, it’s evident in the increasingly costly notices and bills that grace your mailbox each year. Understanding contributing factors behind such increases, however, can soften the blow.

    The amount you pay in commercial property taxes is directly linked to the property’s value. And in most areas, property values rise year over year. Here in Texas, investment activity and growing populations have increased demand for commercial property on the whole, further driving the rise.

    It should also be noted that the Lone Star State has no state income tax. Thus, it relies on property taxes to fund public schools, road projects, fire departments and the like. While it is true that taxes continue to rise, some of that perceived growth may come from the fact that the state already generates some of the nation’s highest property tax bills.

  •  Property Owners Have Become More Comfortable Opting to Protest: Since our company’s start, the Lane team has gotten word out that the commercial property tax protest is one of the best ways to bring overinflated assessed values in check and lower your bill. In fact, we believe it should be an annual undertaking for any commercial property owner. (And it seems others are beginning to see the true value those efforts have to offer.) Numbers released by the Texas Comptroller’s office indicate that property tax protests are becoming increasingly popular.

    Let’s take a look at Harris County’s data from 2018, compared to 2021. 2018 brought a total of 39,068 protests related to commercial real property, as opposed to 2021’s 43,519. Meanwhile, the number of commercial property owners who chose to continue the fight even after the appraisal review board’s (ARB) determination rose slightly, too. 2018 brought 4,035 lawsuits related to commercial real and personal property in Harris County, while 2021 saw a slightly increased rate of 4,200 suits.

    Curious to delve even deeper into the numbers? The Texas Comptroller’s website offers a number of property tax surveys and reports to get you started.

What Issues Might Impact Commercial Property Taxes in the Coming Year?
Understanding what’s happened in the past is just half the battle, right? It’s also important to know what to expect moving forward. One key issue that could impact commercial property tax trends in the coming years is the Texas gubernatorial election.

At Lane, although we don’t believe it’s our job to offer political commentary, we can provide details surrounding how elections impact business. Any time a key political office changes hands or an incumbent takes on an additional term, you can expect policy evaluations and change to enter the mix.

In the case of Greg Abbott and Beto O’Rourke’s 2022 run for Texas governor, both candidates have discussed the ongoing issue of rising property taxes — and the importance of offering relief. Of course, each has his own potential approach, and any change is bound to take time. This makes it incredibly difficult to know exactly how future tax seasons will be impacted.

And political issues aren’t the only factor to consider.

The same commercial property tax trends we’ve spotted in the past — particularly rising property values as startups and tech companies make their way to Texas — will likely continue to make themselves known in the form of rising assessed values, higher tax bills and the need to continue fighting to only pay what’s fair.

We understand that unfair valuations and other unknowns related to what you pay can be frustrating. But rest assured the world of commercial property taxes is a lot easier when you have an expert team on your side. At Lane, our skilled property tax pros are dedicated to keeping an eye out for emerging trends and changes that could impact your tax bills, communicating any information you should know — and providing the support you need through the protest process and beyond.

If you have questions about any of the above, or if you’re interested in talking with Lane about your commercial properties, feel free to reach out. We’re here, and we’re glad to help.

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Lane Property Tax Advocates has been serving the greater Houston, Austin, San Antonio and Dallas areas and beyond for over 10 years - and we can help you, too.
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