For many people who receive notices of increased commercial property values, taxes come to mind almost immediately. After all, when the amount you pay is based on what appraisers believe your property is worth, it stands to reason that any increase would be bad for your bottom line. (And for Texas property owners everywhere, those amounts have seen a steep upward tick.) At Lane Property Tax Advocates, part of our promise to unburden your business is helping you understand how various factors come into play — and what the market in general is doing. Here, we’ve pulled together some insight aimed at keeping you fully informed and better prepared for the road ahead.
Understanding the Current Environment as it Relates to Property Values
It’s no secret that home prices have risen by record-breaking margins recently, but they aren’t the only ones. Commercial properties, including apartments, have seen increases, as well. The Texas Tribune notes that property tax collections have seen a more than 20% increase since 2017, with Texans paying about $73.2 billion in property taxes in 2021 alone. Meanwhile, the Houston Chronicle reported in March that Harris County’s average apartment values rose by 24%, while average home values increased by 21%. A squeezed housing market (low inventory driving up prices) has contributed to the issue, as have supply chain disruptions that have led to slowdowns or halts in construction.
Property Values, Taxes and How They Impact on What You Pay
Property taxes go toward funding for public schools and other government services. As such, they can be big business in a state like Texas. In fact, due to a lack of a state income tax, the Texas Tribune notes our property taxes rank among the highest in the U.S. As for how your assessed value works into the equation, that amount is what dictates what you wind up paying in taxes. Tax credits are available for commercial property owners in certain situations, such as those restoring historic structures, while homeowners can benefit from exemptions and caps on increase rates. In general, however, higher assessed values tend to result in higher tax payments. Remember, due to county appraisal districts’ (CAD) tendency to assess and value properties based on what similar properties are going for in the general area, there’s a good chance your assessed value is too high. As a general rule, we recommend protesting your commercial property taxes annually in order to ensure you’re only paying your fair share.
We hope this article helped to shine a bit of light on commercial property values, taxes and steps you can take to keep your bottom line better protected. If you have questions on any of the above, or if you’re interested in learning how Lane can help you down the path of a commercial property tax protest, feel free to contact our team. Our property tax experts are always happy to help.