Commercial Property Tax

Booming real estate markets have lifted property prices throughout urban Texas. If you’re the owner of commercial real estate, your commercial property tax rate is determined by a welter of different taxation districts, and it can be hard to keep track of which is which. 

How is Commercial Property Tax Assessed in Houston? 

To determine the assessed value of a property, tax assessors look at improvements made to a property, the amount of revenue it’s generating (or should be), and recent similar property sales. Once that value is determined, a percentage of it goes to property taxes, which fund different parts of a state or city—school, electrical and water 

In Houston, Commercial Property Taxes Are Rising
Texas is one of nine states without a state income tax, which means that many cities and municipalities rely more heavily on property taxes to fill their coffers. As property values rise, property taxes increase as well—even if the tax rate itself doesn’t change much. That’s because appraisers get more aggressive about assessing value in hot real estate markets—as cities boom, so do commercial property tax rates. Although Texas law limits how much a residential property can increase in valuation for tax purposes each year, there is no such cap on commercial property.  

2020 tax rates  

In Texas cities—which are going through a rise in property value—commercial real estate tax rates are somewhat higher than the national average, with the average falling at 1.83% rather than 1.08%. However, in Houston (Harris County), the average commercial property tax rate is around 2.09% 

How to Protest Commercial Property Tax Assessments 

Assessor’s values are based on the cost approach, which isn’t alway the most reliable method of appraisal. If you feel that the assessors have over-valued your property—and slapped you with an excessive tax value—you can protest to the county tax office. 

Questions about property taxes in Austin? Texas Protax is a property tax consulting firm serving Austin, Houston, and Central Texas. Despite the Travis County Appraisal District not changing appraisal values in 2020, we were still able to get reductions for over 70 percent of our clients. Contact us today to learn how we can help you appeal your property tax rate in Austin.