Commercial property taxes in Texas and how it works

The commercial property tax system in Texas can be complicated, and Texas is known for having some of the highest property tax rates in the country. But why are property tax rates in Texas so high, and how are they determined?

One reason property taxes in Texas are so high is that every year, the state requires more tax revenue to support economic and population growth. A bigger economy and a rapidly growing population mean that the state of Texas consistently experiences an increased demand for things like schools, building new roads, healthcare, and other public services and infrastructure. Because of this demand, commercial property owner’s taxes often get more expensive every year, even if the rate doesn’t change, as the generally robust Texas economy increases property market value on which property taxes are based.

In Texas, commercial property and real estate market valuations, contributing to the calculation of annual property taxes, are conducted by state tax assessors once a year. Because property values tend to increase year on year, commercial property owners can anticipate a steady annual increase in their commercial tax rates, affecting the overall average property tax rate. However, these valuation increases, which impact the property tax percentage, are not always accurate yet still result in a higher tax bill. Consequently, some commercial property owners end up paying more annual property taxes than they should. If you’re a property owner who believes your commercial real estate space has been inaccurately valued, you can request a review or arbitration by your local appraisal review board (ARB) or file a protest with the county appraisal district.

Understanding How Commercial Property Taxes Work in Texas

A factor used in property valuation is called the income approach. This means that the amount of income a commercial property generates is a factor in the valuation, so two identical commercial spaces – one a high-end dental clinic and one a thrift store – may have very different valuations each year.

In addition to all of this, commercial property owners in Texas are often faced with exorbitant collection fees, interest, and penalties. Falling behind on property tax obligations can also risk foreclosure on your property.

How to Navigate Commercial Property Tax Increase and Annual Property Taxes in Texas

At American Finance and Investment Co., Inc. (AFIC), we partner with commercial property owners across the state who need help paying their taxes. Struggling to keep up with taxes is something that nearly all business owners face at some point in time. Taking out a loan to pay property taxes can provide you with the much-needed financial flexibility to keep your business running and protect your livelihood.

We can assist with different aspects of property tax, such as tax exemptions, rendition forms, and delinquency taxes. We factor in various components such as local taxing units, school districts, production of income, personal property renditions, and business personal property taxes to ensure we provide our clients with tailored strategies ideal for their specific needs.

Get more information about property tax loans

If you need a commercial property tax loan in Texas or want to know what options are available to you, please give us a call today. Our team will be happy to discuss a range of potential solutions that fit your circumstances and your budget. Discover why so many people partner with us for assistance paying property tax in Texas. We look forward to hearing from you.