Kathlyn Hufstetler providing valuable property tax information to clients. Credit: Courtesy of Patel Gaines, PLLC

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The financial impact of the COVID-19 pandemic has property owners and business owners looking for creative ways to tighten the belt. One of the most important line items on the balance sheet each year is property taxes, and it’s also one that businesses can actually manage. With property tax protest deadlines approaching, what better way to utilize this time working remotely, than to become more knowledgeable on the subject?

While protesting may seem complicated, it is important to be well-versed in the process. Paying property taxes on over appraised property values is where many owners leave large sums of money on the table each tax year, especially on multi-family, retail, office and hospitality properties. And with the consistent increase in property values across Texas, those large sums will likely continue to increase, becoming a more significant burden for property owners, landlords and tenants, particularly during this time of economic uncertainty.

These six secrets to a great appeal might be your key to weathering COVID-19 and preparing your business for a brighter, more cost-efficient future. 

1. Look for inconsistencies in your assessed value.

Appraisal districts are required to value hundreds of thousands of properties each year, and there may be some disparities in their assessment. They may not have considered the “softness” of your market, or perhaps the square footage is incorrect. Review your reappraisal notice closely and verify the details listed for your property are correct. In many instances, they are not, and that can be a point to argue during your appeal. 

2. Documentation is priceless.

A picture, an estimate, a quote – they are all extremely valuable as you are preparing to appeal commercial property values. Take photos of deferred maintenance and obtain quotes for any issues in your building that may impact your value. Document all of these items that will require attention.

You should also gather any financial documents that may bolster your case and share them with your property tax consultant. For example, with multifamily housing, office and retail properties, be prepared to share financials including rental income and whether you are operating at an occupancy below projections. This information can be utilized in assessing your property taxes. The more you can document and illustrate your points for the Appraisal Review Board (ARB), the more likely the ARB will deem those items valid in lowering your property taxes.

3. Research competitive and comparable properties.

Compile a list of competitive and comparable properties to share with your property tax consultant. How do their assessed values compare with your property? Gather these competitive reports and be prepared to submit the data as supporting documentation for your appeal.

4. Identify a property tax consultant.

If you’ve never been through the property tax protest process (or maybe you have and would prefer to leave the heavy lifting to someone else), find a property tax consultant to guide you. While some property owners may choose to navigate the process alone, commercial real estate owners will find that having a knowledgeable consultant will be helpful. A property tax consultant is experienced at appeals, applying best practices and guiding you as you move through the appeal process. It is important to have a good property tax consultant – not just the cheapest one.

5. Litigate – the one time it will be your friend!

A hearing with the ARB may be just the first step in your property tax appeal process. You may leave your hearing with the property value you’d hoped for, but if not, this is where a law firm focused in property tax litigation such as Patel Gaines can really help. They will appeal your property taxes further and work to secure a reduction in the county where the property is located.

6. Put a long-term strategy for managing your property taxes in place.

This is probably the most important tip. As commercial real estate property owners and investors, protesting your taxes should be an annual process. In fact, most real estate investors are already protesting yearly, as we have seen double digit increases in commercial property assessed values and taxes. The appeal process is key in securing the success of your business investments. Increases in property taxes are expected to continue growing. Every year that you don’t protest could mean adding that value to the following year’s value. Prepare your strategy to mitigate the effects of these increases now, because next year will be here before you know it.

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The typical deadline for property tax protests remains May 15, but amid the COVID-19 outbreak, Texas counties are adapting to the current situation in different ways. Some are proceeding as usual but asking that all documentation be submitted online. Others may announce later deadlines to accommodate property owners. Be sure to visit your county’s website for specific deadline and process procedures or reach out to your tax consultant.

For those with additional questions about appealing your commercial property taxes, visit PatelGaines.com or give us a call at 210-460-7787. With offices throughout the state of Texas, including Dallas-Fort Worth, Houston, and San Antonio, let us know how we can assist as you maneuver through the property tax process.

This content is provided for informational purposes only and is in no way intended to constitute legal advice or create an attorney-client relationship. The attorney responsible for this advertisement is Rahul B. Patel of Patel Gaines, PLLC.

Kathlyn Hufstetler

Kathlyn Hufstetler

Kathlyn Hufstetler is a Senior Associate Attorney at Patel Gaines, PLLC, one of the fastest growing law firms in the country. A fierce advocate for property owners and real estate investors, Hufstetler...