Texas Property Tax Laws: What Commercial Property Owners Should Know

Texas has long been recognized as a business-friendly state, but commercial property owners continue to face rising valuations and increased tax burdens in many markets. While recent legislative changes have provided some relief, they also introduce uncertainties for property owners who find themselves unsure of how — or if — shifting laws impact them specifically.

Whether you own office buildings, retail centers, multifamily properties or other commercial real estate, staying informed about Texas property tax laws can help you make smarter decisions for your business while also providing peace of mind. Here, Lane’s commercial real estate experts cover legal changes that impact what Texas commercial property owners pay, and steps you can take to protect your bottom line moving forward. Let’s get started.

Recent Changes Affecting Commercial Property Taxes

Legislative action taken over the past couple of years has introduced changes that impact commercial property taxes across Texas. Let’s take a closer look at some of the most important and impactful updates that have come into play for commercial property owners in recent years.

• Lower School Property Tax Rates: Texas voters approved a property tax relief package in 2023 that reduced the portion of property taxes used to fund public schools. The goal was to lower overall property tax bills for both homeowners and commercial property owners. While the reduction provided some relief, property values still play a major role in determining how much property tax a business ultimately pays. 
• 20% Circuit Breaker Program: Texas also created a temporary program that limits how much the taxable value of some qualifying commercial and other non-homestead properties can increase from one year to the next. For eligible properties, annual appraised value increases may be capped at 20%. However, not all commercial properties qualify, and a cap on annual increases does not guarantee a fair valuation. Properties can still be overvalued. 
• Higher Franchise Tax Exemption Threshold: The state increased the amount of revenue a business can earn before it may owe Texas franchise tax. Beginning with reports due on or after Jan. 1, 2024, businesses with annual revenue below $2.47 million generally do not owe franchise tax. This change reduced tax obligations for many Texas businesses. 
• Fewer Reporting Requirements for Some Businesses: Businesses that fall below the franchise tax exemption threshold are no longer required to file certain no-tax-due reports that were previously required. While some businesses may still need to submit other information to the state, the change simplified compliance requirements for many small and midsize companies.

Together, these changes provided relief for many property owners and businesses, but they did not eliminate the need for careful annual review. Commercial property taxes are still heavily influenced by appraised values, property performance, local market conditions and appraisal district methodology. As a result, assessed values do not always reflect a property’s true market position. At Lane, we encourage commercial property owners to appeal their overinflated valuations on an annual basis.

Are More Changes to Texas Property Tax Laws on the Horizon?

Texas property tax laws continue to evolve as lawmakers evaluate new proposals designed to balance taxpayer relief with funding needs for local governments and school districts. Future legislative sessions may consider updates involving appraisal procedures, taxpayer rights, valuation limitations, transparency requirements and appeal processes.

While not every proposal becomes law, changes can significantly affect how commercial properties are valued and taxed. For commercial property owners, staying informed about legislative developments can help prevent surprises and provide opportunities to adjust tax strategies as regulations change.

Commercial property owners should monitor developments closely and work with trusted professionals who understand how regulatory changes may affect both their properties and what they pay.

Why the Property Tax Protest Still Matters

Despite recent legislative changes, a property tax protest remains one of the most effective ways to challenge an inaccurate valuation and potentially reduce tax liability. This is largely due to the fact that appraisal districts are responsible for valuing thousands of properties each year.

While mass appraisal systems provide a quick, consistent way to value large numbers of properties at once, they often overlook important property-specific details that impact value. The following factors often contribute to inaccurate valuations.

• High Vacancy Rates: Empty units or unused space can reduce a property’s value
• Deferred Maintenance: Needed repairs and property condition issues can affect what a property is worth
• Lower Rental Income: Declining rents or tenant concessions can impact value
• Market Changes: Local economic shifts may affect demand for commercial space
• Property-Specific Factors: Unique circumstances may not be captured in appraisal district models

A successful property tax protest typically relies on evidence rather than opinion. Documentation such as rent rolls, income and expense statements, repair estimates, occupancy reports and comparable property information can help support a lower valuation. Because every commercial property is different, reviewing appraisal notices annually remains an important part of controlling property tax expenses.

How a Property Tax Firm Helps Commercial Property Owners

Understanding appraisal procedures, protest deadlines and legislative changes can be challenging for even experienced property owners. A professional property tax firm can provide valuable guidance, putting firsthand knowledge to work through every stage of an appeal. Firms such as Lane often aid with the following.

• Reviewing Appraisal Notices for Accuracy
• Identifying Potential Valuation Issues
• Monitoring Changes to Property Tax Regulations
• Gathering and Organizing Supporting Evidence
• Filing Protests and Preparing Documentation
• Representing Owners During Hearings
• Continuing Appeals Through Arbitration or Litigation Proceedings

Professional representation saves commercial property owners time, money and stress while helping ensure opportunities for tax savings are not overlooked. At Lane, we have more than 100 years of combined experience — and firsthand knowledge fighting unfair valuations for commercial properties of all types and sizes. That experience helps us position your case effectively, pivot where needed and provide you with the strongest opportunity for a successful outcome.

Stay Informed About Texas Property Tax Laws

Texas property tax laws continue to change, making it important for commercial property owners to stay informed and proactive. Understanding how regulations affect commercial property taxes can help you identify opportunities to reduce expenses and protect your investment.

Whether you’re reviewing an appraisal notice, considering a property tax protest or simply looking for ways to better your company’s bottom line in the future, your Lane team is here to help. Contact our team at any time to learn more about the current environment, understand your options and take meaningful steps to help unburden your business.