Houston Property Tax Appraisal Reform Looming

Based on the number of lawsuits against Texas appraisal districts, it is clear there’s tension between those that set property tax rates and those that must pay them. Houston is not immune to the debate. According to the chief appraiser for Harris County, Sands Stiefer, Houston currently has 190 office building appraisal appeals on the docket, including all of the downtown high-rise buildings.


“Equal and Uniform” Statute Disputed

Under current law, taxpayers can pull “comparable” property values to determine a median of the values even if the rates vary considerably or, as is the reality for several commercial properties, there are not enough “comparables” to create a median value without pulling from neighboring districts. Under this current formula, there are some who feel this statute lacks standardization.


Appraisal Appeals

Generally, property taxes are one of the biggest items on a company’s balance sheet. As a result, business leaders go to great lengths to ensure that they are getting fair treatment when it comes to property tax assessments. When the appraisal district and property owner can’t agree on a fair value, lawsuits are opened. These appeals are abundant in Harris County Civil Court; Steifer estimates that all of this litigation, 5,200 total appeals including 190 office buildings, will cost taxpayers more than $16 million in 2015.

Seeking New Houston Property Tax Laws

Legislation Introduced

State legislators have introduced bills to address the current property tax laws. The bills introduced by Rep. Drew Darby and Sen. Kelly Hancock, House Bill 2083 and Senate Bill 773, state a property tax appeal be “based upon the application of generally accepted appraisal methods and techniques.” Sen. Kirk Watson introduced Senate Bill 280, and requests that comparables be pulled from the same appraisal district of the building under appeal.


How to Use this Information

At Capital Realty Group, we are monitoring the changes to Texas’ property tax appraisal system closely. We diligently follow the issues that impact Houston commercial real estate, so that we can bring your office space vision to life with our REALI-IzedTM Visions approach. Please let us know what you seek and give us a call at 713-452-9000 or contact us online today.

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This post was written by Cece Garrett