How to Reduce Your Commercial Property Taxes in Texas
As far back as ancient Roman times, tax has been as much a fact of life as death. Like Caesar, commercial property taxes in Texas can seem intimidating and unavoidable. With so many factors affecting the amount of property taxes owed, it can be a confusing and overwhelming process. But just as Caesar conquered the known world, you too can conquer the world of Texas business property tax.
Instead of dreading the process, take a proactive approach and educate yourself on the ins and outs of the process. With the right knowledge and preparation, you can reduce your commercial property taxes bill.
So, let’s take a deep dive into the world of commercial property taxes in Texas, exploring everything from how properties are assessed to the steps you can take if you’re facing difficulty paying your taxes.
Understanding Market Value vs. Assessed Value of Your Business Property
Being a vibrant and thriving state, Texas boasts a diverse range of businesses and commercial real estate. Therefore, the market value of your business property is the estimated price that it would sell for in a competitive and open market.
Now, put your buyer’s hat on and consider what you want to know when deciding if the market value is reasonable. Factors include location, economic conditions, supply and demand, and property-specific attributes such as size, condition, and amenities. You would also ask questions about the costs of owning the place – maintenance and repairs, management fees, insurance, etc.
The assessed value is generally the market value, in a commercial context, with a handful of exceptions. The most notable of which is an agricultural exemption relating to property utilized for agricultural purposes.
Understanding Equity Appraisal and How it Works
An equity appraisal ensures your property is valued comparably to similar properties. Being overworked and underpaid, assessors often rely on the mass appraisal approach. This method uses statistics and computer systems to estimate the value of properties based on a set of standard characteristics and market conditions.
It is designed to be a more efficient and consistent way of appraising large numbers of properties for property tax purposes. However, inaccuracies occur when the standards used in the model do not accurately reflect the specifics of individual properties.
Not only might you protest because of inaccuracies in the equity method, there is also a concept that your property shouldn’t be taxed more than a competing property, therefore you may be able to lower your property taxes, to below market value, by protesting via the equity method.
Deciding Whether to Appeal Appraisal Values
The average business owner is too busy focusing on their company to bother appealing an appraisal. However, with a flawed system and the exorbitant tax bills you receive each year, 2023 may be the year to change that.
Why Aren’t Properties Assessed Equally?
Your neighbor may be getting a lower tax bill on commercial property they own simply because of the methodology, inaccurate data, or human error.
Investigate comparable properties in your district.
What Could Affect the Market Value of Your Commercial Property
The first step in reducing commercial property taxes is understanding what impacts the value of your business property:
- Location – including proximity to transportation, amenities, and other desirable features.
- Economic conditions, employment rates, and consumer spending impact the demand for commercial properties.
- Supply and demand.
- The physical condition of the property and amenities, such as on-site parking, HVAC systems, and security systems
- Rental income from tenants and the stability of those tenants.
What Happens if You Don’t Pay Your Commercial Property Taxes
However much you may despise them, don’t fail to pay your commercial property taxes in Texas.
- Late fees and interest: You will be charged collection fees, penalties, and interest on the unpaid amount can be around 48% in the first year! - Adding up quickly!
- Collection proceedings: Your local tax assessor may initiate collection proceedings to recover the delinquent taxes.
- Legal action: In extreme cases, legal action such as a lawsuit or foreclosure may be taken.
- Loss of property: If your business property is sold at a tax sale, you will lose ownership of it.
Avoid Delinquency with a Commercial Property Tax Loan from AFIC
American Finance and Investment Co., Inc. (AFIC) is a financial institution based in Texas. We have been serving the financial needs of residents in Texas communities since 1946. With nearly eight decades of complaint-free consumer financing, we stand out as the first choice when it comes to manageable solutions for your tax debts.
We offer our clients an affordable, hassle-free way to ensure that your account with the local government tax office is paid in full and will work out a manageable repayment plan for you. AFIC can provide you with an instant quote by completing the form on our homepage. For qualifying properties, we can help you pay off your delinquent taxes and offer you the following benefits:
- Quick and completely online process
- No money down
- No credit check
- Free 30-day rate match
- Match competitors and beat their rate by 1%
- Avoid high penalties and foreclosure
We pride ourselves on finding solutions to suit the unique needs of our clients. If you would like to discuss our commercial property tax loans, please contact our experienced team at AFIC today.
