For Texas business owners, real and personal property taxes can be a financial burden. Texas has no income tax, so over 50 percent of all state and local tax revenue comes from property taxes. Local governments set tax rates, and business owners may find themselves taxed by several different agencies - the school district, city, county, hospital district, junior college district, and water district, among others. This implies large tax bills for businesses that own substantial real or personal property. However, with intervention, this can be reduced.
Reasons You Should Protest Your High Property Taxes
The 2020 property tax season is quickly approaching. The following are reasons why an annual property tax appeal is necessary and tips on how to get the best reduction
Steps to Protest and Reduce Your Property Value Annually
Step 1. File a Protest
Texas property tax appeals can be filed using the form provided by the appraisal district. You should indicate the basis is both assessed value over market value and equal appraisal. The deadline to file a protest is May 15, or 30 days after notice of your assessed value is mailed to you, whichever is later. Protest annually to minimize your property taxes.
Step 2. Research the Central Appraisal District’s Record Card
The appraisal district in your county has a record card for each property. This card contains many information such as lot size, building size, amenities, and much more. You will need to go to the district office to get the complete record card and there may be a nominal charge. However, you can probably review much of the basic information on the appraisal district’s website.
Step 3. Establish Property Value
There are three different approaches in Texas appraisal districts that typically determine the market value when granting reductions in property tax assessments. Those three approaches are Sales Comparison Approach, Income Approach, and Cost Approach. In addition, recent court rulings have paved the way to encourage more districts to recognize the Uniform and Equal Approach (unequal appraisal) to value the property as provided in the Texas Property Tax Code.
Step 4. Journey through the Legal Avenues
After filing a protest you will be notified of a date and time to attend a hearing. This meeting is conducted with an appraiser at the appraisal district office. At its conclusion, the appraiser will either indicate whether he can or cannot make an adjustment, or he will offer to settle by establishing lower assessment. Thus, these are some of the steps to protest and reduce your property value annually.
Appraisal software offers many opportunities to grow your efficiency and increase your productivity. Real estate appraisers know all too well that time is money. So how can you streamline your appraisal process to complete more appraisals? There are several companies out there offering innovative solutions of appraisal software. Here are several appraisal software tools worth checking out.
Redstone analytics software
This software package provides advanced analytics for appraisers. With this appraisal software, you can include analytical credibility to your report and complete your appraisal quickly and efficiently. Redstone helps you to quickly determine and identify the best comps, and document the selection process for comparables. And it automatically generates a 1004MC.
HomePuter forms processing software
HomePuter’s Forms Processing Software package brings all the latest Fannie Mae, Freddie Mac, FHA, and VA forms, as well as Lender/Client-specific forms and AMC-specific forms. It also comes with USPAP addenda, auto-mapping, FEMA flood maps, census data, photo imaging, free signature scan, and other features. And it brings a compliance checker that provides warnings and errors, which is very much useful for us to identify the corrections easily..
TOTAL sketching software
This software is easy-to-use floor-plan sketching software for desktop andneven for mobile. This software is free, or you can buy the Pro version to get more advanced time-saving features and more. TOTAL Sketch Pro includes Trace mode, photometrics, and free integration with other sketching programs like RapidSketch and Apex.
ACI analytics software
The ACI Analytics desktop collection performs analytics and contains a listing database to facilitate property cost analyses. The desktop suite includes sketching software, location maps, UAD compliance features, market conditions analysis, appraisal delivery, and additional plug-ins for flood maps, data storage, and more.
Appraise-It software suite
SFREP’s Appraise-It software gives you the advantage of including photos, sketches, maps, signatures, and more—all in one report. Plus, it automatically applies adjustments. This appraisal software suite offers a wide array of time-saving features from form-filling and sketching to managing comps and photos
Anow appraisal management software
With Anow’s Appraisal Tracking software, you can manage and control all your orders, clients, fees, and more. Additionally, It offers many easy-to-use features—such as calendar, map, email, invoicing, and financial analytics features—to help further improve your workflow and business organization.
CARS (Commercial Assessment Reporting System) is the most advanced commercial real estate assessment report writing software on the market that allows you to fully streamline the appraisal process. ARS is connected to National data, which can automatically pre fill your appraisal forms with the property data, advanced AI algorithms which recommend comps.
If you are new to the world of online appraisal software, I hope this gives you an idea of what’s available out there and where to start.
The situation of COVID-19 is on-going, and this in turn has affected commercial real estate. All geographic areas are affected by this pandemic and every country has come up with its new strategy to overcome the crisis. For the past two quarters, the economy slumped especially as the US GDP felt a major slump than other geographic markets. But slowly after the second quarter, contraction began on the commercial real estate market.
Effects of pandemic
Before the pandemic began, the whole CRE market was healthy, and many surveys expected a steady increment in CRE markets. But the pandemic affected real estate, multi-family and CRE started to dip low in the economic curve. It affected many people from property owners, rentals, brokers, developers, and real estate agents.
The rates were badly affected in many CRE as many of the stores closed due to this COVID-19. The rise in delinquency boosted the CMBS at a triple rate than the 2012 recession period. Many hotels also faced low occupancy rates which resulted in loan spiking up to $21 billion during June 2020. Even the developing constructions of many CRE resulted in a downfall because of a shortage of materials. This graph will give you a better understanding of the dip that happened in CRE.
Contracting back to normal
Recovering after this pandemic is quite a hustle for many CRE owners. Health concerns will stay on top and most of the owners are pushed to spend the amount on creating an environment with social distancing and other precautionary steps to ensure safety within their commercial properties. Rent should be negotiated, and minor adjustments should be taken to keep the cash flow. Commercial property owners can follow the liquidity management which can be one better way to streamline cash flow and funding activities.
Deloitte has given some strategies for backing up the financial sector. They suggest adopting the business towards the customer comfort zone. Rethinking some of the values for tenants. To perform virtual closures. The virtual closure on properties can be done with the help of computer vision and virtual tours. Short term leases can be extended.
Can we invest?
This is one question which most of the commercial property investors or owners would have given a thought. Since the pandemic, the ratio of investors and buyers is decreasing rapidly due to many reasons like panic buying, saving money for a backup. Lending markets of real estate are still unstable. Investors who are willing to invest at these times can effectively invest but also should consider facts like building up space with social distancing and other precautionary commercial spaces.
If you are a prudent investor then you must check for so many aspects where to invest either with multi-family, retails, hotels, or office spaces. If you are planning to invest in office spaces, here is a piece of information to help you out. Any investor who is about to invest during this time of global pandemic must do a complete study on the type of investment property and cost spent on investment. It is better to invest little and save more because of the changing financial scenarios of COVID-19.
Today, Cost segregation is a strategy that more developers are utilizing into their construction plans. This strategy is a great way to increase cash flow.
When cost segregation is applied during the design phase of a building, many components that would normally be considered real property “become” tangible personal property.
As you begin designing and developing a new commercial real estate construction project, it is vital you work with the General Contractor. This will guarantee that everything goes the way you had planned for it to and that everything is set within the cost segregation study.
One of the primary reasons it is beneficial to start the cost segregation process prior to the construction phase is so that subcontractors can be used. By applying these techniques during construction, the use of subcontractors will ultimately help distribute the costs properly.
The whole reason you want to include cost segregation into the plans is to take advantage of the numerous tax benefits that are available
Here are few things to know about them:
Primary benefits of a Cost Segregation study:
O’Connor Cost Segregation team members will interact with you to answer all of your questions about cost segregation depreciation approach, and will assist you in determining if a cost segregation study will be of benefit to you.
O’Connor team will provide a preliminary analysis that will estimate approximate savings for your asset based on studies previously completed on similar assets.
You will know everything about cost segregation by visiting our website, where you can also sign up for your property tax analysis for free.
EXPERIENCE YOUR BUSINESS GROWTH TODAY!!!
Here is the big question all Texans have in mind; will I get a tax break in the midst of COVID-19? With COVID 19 affecting the real estate market will there be a break in property taxes in Texas? The sad truth is a BIG NO. Yes, you heard it right, it might sound bitter, but Texas property owners are likely not to see any tax break this year.
Here are two main reasons, the first reason being, your property values were set by the appraisal districts on January 1st before the deadly virus reached the pandemic stage. The second reason is the written opinion issued by the Texas Attorney General - Ken Paxton, where he stated any economic damage caused by COVID 19 does not qualify for a tax exemption.
Texans, it’s time to plan!
If you are a property owner who is expecting to see a hike in the appraised value of your property, then it's high time you plan. Here is a simple plan for you.
First, start off with the documentation. Collect information about comparable property sales, building expenses or modification, and pictures of deferred maintenance. It would be better to produce documents that show anything that negatively affects the value of your property. Without proper documents, it would be really difficult to protest the assessed value of your property.
COVID’s impact on the protest process
Property owners who had opted to protest their property taxes this year are stuck in the middle of the process. Here is an overview of how the protest process usually works:
CAD holds an informal hearing with the property owner. If the owner of the property agrees, the protest is resolved. Otherwise he or she moves on to the formal hearing where a panel of three people appointed by a local judge try to resolve the protest. If the property owner is still unhappy, he can file a case against the CAD.
But, COVID 19 has affected the entire process, informal hearings are now being done via phone or e-mail and most of them are delayed and postponed to the end of August or early September.
Texans keep an eye on the legislative sessions
The next legislative session is likely to begin on the 21st of January 2021. State lawmakers are likely to discuss the economic recovery and property tax is likely to be a part of the discussion. In 2021, Texans can expect to see the new tax cap which is 3.5% which will be replacing the old 8% tax cap. However, the new tax cap on an individual tax-on-a-property basis could be of no relief at all. Yes, you heard it right, though the new rule caps the total receipts the taxing entity brings in, it will not reduce the tax burden of an individual taxpayer.
To know more on property taxes and to get regular insights and updates visit my blog Protest For Your Taxes