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Commercial Property

commercial property taxes

Houston business owners look for ways to reduce overhead, they should look to the ever increasing cost of commercial property taxes.

Determining accurate market values is the very heart of an equitable system of property taxation. A successful appeal to a commercial property tax assessment can result in thousands of dollars in savings. Appraisal Districts, as a matter of necessity, use the mass appraisal technique. This means the details of your specific commercial properties are not given any weight when they assess your value.

We assess each individual property it protests in order to maximize commercial property tax value reductions. In doing so, we use the most appropriate methodology that the law provides.

MARKET VALUE

Sales Comparables

This is the accepted method for valuing residential real estate. Typically this method involves selecting properties with similar characteristics in the the same market area that have recently sold. Once those properties are found they are compared to the property in question and adjustments are made from the subject property for comparative deficiencies and advantages.

Income Method:

This method determines the value of a property based on its income in comparison to similar properties, using prevailing capitalization rates in a given market for that type of property. Dividing the net operating income generated by the property by the capitalization rate generates a sales value as a result.

Replacement Cost Method:

The replacement cost method is based on the assumption that the value is the same as the cost to construct the property or replacement cost. We use this method to determine the value of income producing properties that have yet to be fully completed as of January 1 of the given tax year.  This method requires an in-depth knowledge of construction and material costs.

UNIFORM AND EQUAL APPRAISAL APPEAL

Section 42.26 of the Texas Property Tax Code provides the basis for analyzing a uniform and equal appraisal. A property owner is entitled to relief on the ground that a property is appraised unequally if:

  1. The appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a  reasonable  and  representative  sample  of  other  properties  in  the appraisal district;
  2. The appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a sample of properties in the appraisal district consisting of a reasonable number of other properties similarly situated to, or of the same general kind or character as the property subject to the appeal; or,
  3.  The appraised  value of  the  property exceeds  the  median  appraised  value of a reasonable number of comparable properties appropriately adjusted.

The taxpayer has the burden to prove that the properties in its analysis are comparable, that there are a reasonable number used, and that the adjustments are appropriately made under generally accepted appraisal techniques.

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