That is an excellent question and Texas, unlike many states, tends to revalue property annually to maximize property taxes. In many states, appraisal districts only revalue every three, five or ten years.
The only purpose of the annual valuation is to keep property tax values at the highest possible level by revaluing as often as possible. However, this means property owners need to appeal annually unless that want to access the guesstimate generated by the appraisal district. We know the appraisal district probably is not accurate. The issue is how much of an issue is there with market value and unequal appraisal? Further, will there be an unequal appraisal issue after the informal and ARB decisions.
Most long term commercial property owners typically appeal on an annual basis to reduce property taxes. Property tax appeals need to be considered a long-term project to obtain the best results. There is a cumulative impact; while we are still researching the results, we believe property owners who appeal annually pay property taxes that are 15 to 40% lower than those who do not appeal annually.
We believe the data will support the position that: 1) appealing annually and 2) appealing as far as needed, including a lawsuit in district courts, will generate a substantially level of taxes due to the cumulative process.
There are thousands of these suits annually. Anyone who owns a property valued at $1 million or more will pay more taxes unless they appeal at all appropriate levels, including judicial appeals.
Consider a $3,000,000 property. If the reductions from judicial appeals average 10%, does it make sense to appeal annually? The assessment reduction would be $300,000 ($3 MM x 10%) and the annual tax savings would be $8,100. Yes, the answer is any property valued at more than $1 MM after the appraisal review board hearing, should be appealed annually to get the best result.
There is no reason Texas could not follow the good example of other states in only revaluing periodically. Nevertheless, Texas revalues every year and therefore property owners must appeal every year. With property taxes making up such a large percentage of operating expense, a commercial property owner I know was recently please when his consultant informed him that the company had saved him over $123,000 in property taxes. Some owners will realize less savings than those, but every little bit helps your bottom line.
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