In Texas, property taxes are often the single largest operating expense for commercial real estate. There is no state income tax, so local governments rely heavily on property taxes. That makes the annual protest one of the most important tools an owner has.
This is general information; many owners hire property tax consultants or attorneys.
How the system works
Each county has an appraisal district (Harris Central Appraisal District (HCAD), Fort Bend Central Appraisal District (FBCAD), Montgomery Central Appraisal District (MCAD) and others) that appraises property as of January 1 each year. Taxing units then set rates applied to those values.
Key dates
- Spring: appraisal districts mail notices of appraised value.
- Protest deadline: generally May 15 or 30 days after the notice is delivered, whichever is later.
- Business personal property renditions are generally due April 15 (extensions may be available).
Check your notice for the specific dates.
Grounds for protest
Common grounds include:
- Market value: the appraised value exceeds market value.
- Unequal appraisal: your property is appraised higher than comparable properties, appropriately adjusted.
- Errors in property description, exemptions or ownership.
Unequal appraisal can be powerful in Texas, where the appraisal district doesn’t have complete sales data.
Evidence that works for commercial property
- Income and expense statements and rent rolls supporting an income-approach value.
- Comparable sales (limited in Texas because it is a non-disclosure state).
- Equity comparables for unequal appraisal.
- Physical issues: deferred maintenance, functional obsolescence, flood damage.
- Vacancy and lease-up costs.
Informal and formal hearings
Many protests are resolved in an informal meeting with an appraiser. If not, the case goes to the Appraisal Review Board. Further options include binding arbitration (for qualifying properties) and district court.
Buying property? Model the reassessment
When a property sells, the purchase price may influence future appraisals. Underwrite taxes based on your expected purchase price and protest strategy, not the seller’s current bill.
Frequently asked questions
When is the property tax protest deadline in Texas?
Generally May 15 or 30 days after the notice is delivered, whichever is later.
Can I protest every year?
Yes. Owners can protest annually, and many commercial owners do.
What is unequal appraisal?
A protest ground arguing your property is appraised higher than comparable properties, appropriately adjusted.
How we help
We help investors underwrite property taxes when buying and can coordinate with tax consultants. Learn about our investor services.
Have a deal or question in mind?
Talk it through with Apurva. A 20-minute call is usually enough to know your next step.
