Taxman's Tips

Commercial Market Overview

February 2024

2023 ended with a substantial tax rate reduction of Texas school district taxes with the ISD M&O tax rate dropping by an average of 16 pennies due to the record property tax reduction bill known as Senate Bill 2. SB2 also has a first-time yearly 20% appraisal value circuit breaker on all real property under $5,000,000 in value. This will function like the existing residential homestead appraisal cap but is only a 3-year pilot plan which sunsets in 2027. So it’s necessary and important to keep protesting the value of your commercial properties each year and any residential homesteads as well!

Texas is still the job creation engine of the US, and that economic activity keeps pushing commercial property values up. But it’s not the same story across all businesses or industries. While retail properties probably will see the sharpest value increases, areas with rental income increases vs. decreases will determine a lot of the difference in multi-family and office building values in 2024. Any office absorption slowdown generally affects class A rated properties less severely than the B, C, and D rated properties so there will be a tapestry of values both up and down to analyze. Industrial sector property development continues to decline with higher vacancy rates and a lot of focus on the sublease market as a result.

With all of these factors at play, let my BTA Team of Senior Property Tax Consultants, CMIs, and property tax agents comb through the information we need like Income and Expense statements, deferred maintenance items, asset lists, and BPP condition information to help better protest your property. If you would like a site visit to update property condition information for protest hearings, please call Commercial Services today to schedule one. We’re always ready to fight to save you money!

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Residential Market Overview

February 2024

Texas residential homestead owners receieved the benefits of the record 18 Billion Dollar SB2 Property Tax Reduction on your 2023 property tax bill!! A blockbuster $100K ISD Homestead Exemption for school taxes and ISD M&O tax rates 16 cents lower on average drove the tax bills of everyone, especially over 65 & disabled homeowners, way down. Rental properties got substantial tax rate relief.

The residential housing market still had positive momentum at the end of 2023, even with market sales slowing down compared to the previous year's record price levels. This momentum may continue to drive values higher, but those increases won't be the moonshots of the last couple years. The good news is that the programs created by SB2 continue into 2024 so you need a successful property tax protest to really optimize the effect of these positive trends on your next property tax bill.

Give BTA's exceptional team of Senior Property Tax Consultants, Property Tax Consultants, and Property Tax Professionals the information they need on the condition of your property so we can fight to lower your property tax values at your local county appraisal district! We're always ready to fight to save you money!

If Your Property Was Damaged By The Recent Tornado, You Could Qualify For An Exemption

February 2023

In an area declared a disaster by the Governor, Tax Code Section 11.35 allows for a "qualified property" that is at least 15% damaged by a disaster to receive a ONE-YEAR exemption of a portion of the appraised value of the damaged property.

Qualified Property:

1. Tangible Business Personal Property used for income production IF THE OWNER FILED A RENDITION.
2. Residential homes, commercial buildings, industrial buildings, multi-family buildings and other real property buildings.
3. Certain manufactured homes.

The appraisal district determines if the property qualifies for the temporary exemption and assigns a damage assessment rating of Level 1, 2, 3, or 4 (15% - 100%) based upon available information, the application, and additional information provided.

The application must contain attachments that clearly identify the damage is related to the specific disaster, what the damage is, and other information which may include FEMA reports, insurance claims, and adjuster reports, along with estimates. It may not be pre-existing damage or other pending repairs and/or remodeling.

The exemption must meet a minimum of 15% of the building value or the tangible business personal property. IF the damage meets the minimum 15% of value, the exemption is prorated for the remaining days of the year. In this case, there are 341 days left, so there is a proration factor of .93 for the January 24^th Severe Storm.

The deadline to file for this temporary exemption is May 11, 2023.

If you feel your home or your business would qualify for this temporary exemption, please contact our Bettencourt Tax Advisors teams listed below:

Commercial Services: CommercialServices@btanow.com (713) 263-6100 ext. 2

Residential Services: CustomerService@btanow.com (713) 263-6100 ext. 1

Unprecedented Appraisal Value Increases

March 2022

The average residential, apartment, and warehouse property appraisals in Harris have risen over 20%! Unprecedented value increases mean this is a Must Year to protest your property tax bills! While Property Tax rates will also be reduced in the fall during the tax rate setting process, getting your Property Appraisal right is the first step. Let my experienced team at BTA help save you money on your property tax bills!

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Market Cap Reduction Program

February 2022

The esteemed Ben Franklin used to say, "An ounce of prevention is worth a pound of cure." BTA introduced the Market Cap Reduction Program in 2014 to offer our customers the opportunity to lower their market cap. (Market Cap = Preliminary Market Value - Preliminary Appraised Value)

When values go up over 20% (ex: an unprecedented 21% increase in Harris County) on average, any reduction in market cap gives a homeowner the advantage of having a lower final value from which any potential increases may be calculated the following year. A lower final value achieved in the current year ARB hearing process is important because it is often used as the base number when appraisal districts use the mass appraisals approach every year to calculate property valuations in neighborhoods. When using the mass appraisal approach a standardized percentage increase is commonly assigned to last year's property tax valuations of homes in a neighborhood. The more BTA's team can reduce your property valuation this year, the lower your noticed value will likely be next year when any mass appraisal increase or decrease goes into effect and is applied to the previous year's final value.

BTA's team fights to lower property tax bills long term and this is a two year strategy that works! The Market Cap Reduction Program is the ounce of prevention that homeowners need when the property market is hot. This program gives you the opportunity to lower your market cap at a very low cost of $2.50 for every $1000 reduction in market cap. (If the reduction goes below the capped amount the invoice will reflect the higher of the market cap amount or standard contingency fee.) An example of why the market cap program is so important: a large $40,000 reduction in market cap would only cost $100 this year, but without the reduction you may pay as much as $1000 more on your property tax bill every year. The more you reduce your market cap now, the less tax you are likely to pay in the future!

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2022 Market Conditions and Property Taxes

January 2022

If sales tax collections are any indication, economic activity has been on a massive upswing as we’ve seen 20%+ increases in monthly postings of state revenue. Market conditions reflect that and inflation has returned to a 40-year high. The resulting supply chain and worker shortages are real and spread across the country.

That’s all pointing to higher property values, and I think they will be up substantially in several market sectors. The Housing Market is turbocharged and Multifamily activity is literally off the charts at record levels. The Industrial Sector has seen strong expansion as well, fueled by the explosive growth in supply chain warehouses feeding superheated consumer demand. The Hospitality Sector still wishes COVID would be fully in the rearview mirror, but some areas have improved. The CBD stands out as an area that still has very high vacancy rates and overall occupancy issues due to the pandemic response, while commercial retail and restaurants have adapted well to COVID and are showing clear signs of rising appraised values as well. The key indicator I see is the inflow of major commercial monies into Texas from National and International Sources in the form of “deals” being announced to the tune of “Billions” of dollars! This rising tide of capital is “lifting all boats” and will lead to sharply higher appraisal values in 2022.

Give my professional team at BTA the information we need to protest your property values like income and expense statements, property condition, deferred maintenance items, asset lists, etc. so my highly productive Senior Property Tax Consultants, CMIs, and Property Tax Consultants can save you money!

If Your Property Was Damaged During The Winter Storm, You May Qualify For A Tax Exemption

February 2021

In an area declared a disaster by the Governor, Tax Code Section 11.35 allows for a "qualified property" that is at least 15% damaged by a disaster to receive a TEMPORARY exemption of a portion of the appraised value of the damaged property.

Qualified Property: 1. Tangible Business Personal Property used for income production IF THE OWNER FILED A RENDITION. 2. Residential homes, commercial buildings, industrial buildings, multi-family buildings and other real property buildings. 3. Certain manufactured homes.

The appraisal district determines if the property qualifies for the temporary exemption and assigns a damage assessment rating of Level 1, 2, 3, or 4 (15% - 100%) based upon available information, the application, and information provided.

The application must contain attachments that clearly identify the damage is related to the specific disaster, what the damage is and other information which may include FEMA reports, insurance claims and adjuster reports, along with estimates. It may not be pre-existing damage or other pending repairs and/or remodeling.

The exemption must meet a minimum of 15% of the building value or the tangible business personal property. IF the damage meets the minimum 15% of value, the exemption is prorated for the remaining days of the year. In this case, there are 322/365 days left which results in a proration factor of .88 for Winter Storm Uri.

The deadline to file for this temporary exemption is May 28, 2021.

If you feel your home or your business would qualify for this temporary exemption, please contact our Bettencourt Tax Advisors, LLC team members listed below:

Commercial Services: Frank Hernandez - fhernandez@btanow.com (713) 263-6118 

Residential Services: Becky Adams - badams@btanow.com (713) 263-6132

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Market Conditions Matter

January 2021

2020 & 2021 will be a Tale of Two Cities from a property tax appraisal point of view. Our “Virtual City” is humming along with supply chain systems, industrial warehouses, and residential properties experiencing rapid growth as demand outpaces supply.

Our “Traditional City” buildings reliant on in-person interaction like office, retail, and hotel/motel are, of course, the hardest-hit areas with widespread absorption and occupancy issues. Major office buildings in the Greater Houston area showed a negative 2.5 million SF absorption, per Costar, with locations like Downtown, the Galleria, Energy Corridor, etc. being the hardest hit. It’s the Texas economic double whammy of COVID and tumbling oil prices.

Sending Income and Expense information to my BTA team is critical whether your 2021 noticed value is up or down. Every piece of information is important in an inflection year. 

Whether you’re in the “Virtual” or “Traditional” world or both, do not hesitate to reach out to us this year since we’ve all been through 2020 together. 2021 is a must year for a property tax protest!

We are anticipating 2021 property value changes to be mixed in Harris County as market conditions have affected sectors differently. My BTA team is already preparing for the 2021 hearing season by analyzing markets and doing geographic site visits, socially distanced as required. If you would like to visit with a consultant prior to your hearing, give us a call at (713) 263-6100.

Bettencourt Tax Advisors, LLC’s senior state licensed property tax consultants and the rest of my staff will be fighting to lower your property tax values at your local county appraisal district!

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Pay Your Property Taxes By January 31st to Avoid Late Payment Penalties

January 2021

Late payment of your property taxes can result in:

1. Penalties & interest on the amount you owe
2. Forfeture of any unsettled litigation or arbitration cases

2020 Economic Impact of Property Tax Law from the 86th Texas Legislative Session

Property taxes can make up approximately 40% of total business tax expenses and can be reduced. BTA Can Achieve Optimal Results for You. Learn how recent legislation can help control your property taxes.

Senate Bill 2 The Property Tax Reform and Relief Act

• Lowers the Property Tax "Rollback“ rate (now the Voter “Approval" Rate) from 8% to 3.5% for Cities, Counties, and Certified Special Districts above 30,000 in population.
• Requires an automatic November Election for taxing units that exceed the Voter "Approval" rate. For populations under 30,000 a 3% petition of registered voters is required.
• Provides for Appraisal Review Board Reforms a maximum term of service of 3 full or partial terms for ARB members. ARB panels may not raise the value of property in a hearing without the consent of the property owners.
• Establishes a Property Tax Administrative Advisory Board in the Comptroller’s Office to make recommendations on property taxation and state oversight of appraisal districts.

House Bill 3 The Texas Plan for School Finance Reform

• Reduces ISD Property Tax Rates by an estimated 7 or more pennies in 2019 by multiplying tier one tax rates by a factor of 93%.
• Establishes a 2.5% "Hard" Cap on ISD property in revenues by district in 2021, compressing the maintenance and operating property tax rates district by district as needed.
• A combination of SB2 & HB3 means as property values go up, property tax rates will come down in cities and counties above 30,000 in population. This keeps property tax bills from going through the roof!

A Total of 36 Other Property Tax Bills Passed

These bills covered Property Tax Appraisal, Property Tax Deferral, Delinquent Property Taxes, Disaster Reappraisal, Property Tax Exemptions, Appraisal Review Boards, etc.

Sign up with my experienced BTA team today! We can reduce your property tax expenses and improve your bottom line.

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2020 Changes in Property Tax from the 86th Texas Legislative Session

Senate Bill 2, the Property Tax Reform and Relief Act will provide transparency, accountability, and fairness as the law is enacted in 2020. Learn how this bill can help control your property taxes.

Major Changes in Property Tax Law by SB2 Beginning in 2020

• Appraisal Review Board (ARB) Hearing Evidence, when requested, can now be delivered electronically.
• Appraisal Review Board Members are required to take 8 hours of training when newly appointed as well as 4 hours in continuing education. A $50 fee can be charged for training participants who are not ARB members.
• The Comptroller will develop an arbitration manual, curriculum, and training program. Arbitrators are now required to take 4 or more hours of training.
• All Texas Appraisal Districts are now required to appraise properties based on a manual of standardized appraisal methods and techniques that will be developed by the Comptroller’s Office.
• Protesting parties will have a more robust ARB survey to submit their comments and suggestions directly to the Comptroller’s Office via online and offline methods. The Comptroller will issue an annual report on results.
• An appraisal district cannot employ an officer or employee of a taxing unit that participates in the district.
• It only requires a majority of the ARB and panel to concur to make a final determination in a hearing.
• Generally accepted appraisal methods and techniques are now guided by current versions of the Appraisal of Real Estate and the Dictionary of Real Estate Appraisal published by the Appraisal Institute, the Uniform Standards of Professional Appraisal Practice published by the Appraisal Foundation, and a publication that includes information on mass appraisal.
• If the tax rate exceeds the voter approval tax rate, it must be adopted no later than the 71st day before the next uniform election date in November of that year.
• A November election is required to approve tax rates (with certain exceptions for small cities) if adopted rates exceed the voter approval rate for the unit. Elections are not required in the case of a disaster.
• Beginning with the 2020 tax year, counties must maintain an internet website on which the County Tax Assessor-Collector is required to post tax rate information for the last five years, the tax rate calculation forms used by each taxing unit to calculate the no-new-revenue and voter-approval tax rates for each year as certified by a designated officer or employee of the taxing unit, and the name and official contact information of each member of the taxing unit's governing body. By August 7 or as soon thereafter as practicable, the County Assessor-Collector shall post the tax rate calculation forms for the current tax year.

2019 Appraisal Values on the Rise

Property appraisals are way up! 82% of homes are higher in Harris county; up 11% on aerage. Commercial values are up 15% and apartments are not getting a free lunch, they are getting eaten for lunch at a 25% increase. Protest your property taxes! The Taxman says Do it Now! Sign up today or call us at 713.263.6100.

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2018 Texas Property Tax Deadlines Change

Protesting your property taxes every year offers a great opportunity to save money. In Texas, property taxes represent approximately 40% of total business taxes. This is a large component of expenses that can be challenged and changed. It is important to note that key property tax deadlines have moved up two weeks because of tax code changes passed during Texas’ 85th legislative session. Two deadlines critical to keep track of are:

April 1st Rendition Filing Deadline

Renditions must be filed annually on any Business Personal Property (BPP) located in Texas. BPP can include computers, furniture, fixtures, vehicles, vessels, machinery & equipment, and inventory depending on the type of business you are in. 10% penalties on your property taxes will be incurred if Business Personal Property tax renditions, or extension requests, are not filed by April 1st.

May 15th Property Tax Protest Deadline

Protests for Business Personal Property and Property must be filed by May 15th (or, 30 days from the postmarked date on the “Notice of Appraised Value”) to be able to fight your property tax valuations in hearings at your local appraisal district. Real Property for many businesses refers to real estate. But, if you are in the industrial market it can include pipelines, docks, and tank farms, as well. When approaching property tax valuations in any market, it is important to know all the ins and outs of the Texas Property Tax Code. Applying the right exemption or using the right depreciation schedule can make a big difference in the size of your property tax reduction. You must meet these deadlines to be able to fight for lower property tax valuations. Remember, every million dollars in aggregate appraised value reductions generally generates approximately $25,000 in property tax savings.

Paul “The Taxman” Bettencourt, President/CEO of Bettencourt Tax Advisors, LLC (www.btanow.com), has an experienced state licensed senior property tax team with over 250 years in the industry and has invested in state of the art technology to support property tax reductions for our customers.

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IRS Guidelines will not allow future property tax deductions

See In The News

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Hurricane Harvey

Hurricane Harvey caused an estimated $ 200 Billion in devastation throughout much of Southeast Texas. We were all touched by this storm in some way.

If you experienced property damage due to Hurricane Harvey please be aware that regardless of whether a mass reappraisal is triggered for flood damaged properties for the rest of 2017, your property’s 2018 property tax assessment will still be set on January 1st, as it is every year.

UNREPAIRED DAMAGES to your property as of January1, 2018 will be prime evidence for your 2018 property tax hearings. Pictures of flooded property, exterior water lines, etc. in the wake of Harvey is visual evidence that is very useful too! Ongoing discussions in the wake of Harvey about new flood maps for neighborhoods affected by flooding is also an important issue!

This is the type of evidence that can be used in hearings to reduce your 2018 value:

• DATE STAMPED PHOTOGRAPHS – Provide photos of flood damage to your property and structure at the time of the flood and ongoing repair work not completed as of January 1, 2018
• INSURANCE ESTIMATE – If you have insurance and have filed a claim, send us a copy of the adjuster’s estimate
• QUOTES/INVOICES/RECEIPTS – Send us any documentation for planned or completed repairs related to flood damage
• American Institute of Architects (AIA) – Documentation related to flood damage
• ENGINEERING REPORT – related to flood damage

If you are a customer please remember to refer to your BTA-ID and Property Address on any information submitted. We will only use the evidence that will help you in a hearing.

If you have any other property tax questions or concerns, please contact my:

• Residential team at CustomerService@btanow.com
• Commercial team at CommercialServices@btanow.com

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Account sign-up for 2017 hearings

Bettencourt Tax Advisors, LLC on-line account sign-up for 2017 commercial and residential hearings has been extended through midnight Monday, May 30th for Harris, Fort Bend, Galveston, and Montgomery counties. My BTA Team has had great results in the early hearings. Don't miss out, sign up today!

Please go to the sign up page and follow the directions.

Do you think your property tax value should be lower than your Appraisal Review Board (ARB) hearing result?

You can still litigate or arbitrate your property tax value.

To watch a video about BTA's Litigation and Arbitration Services, click on the link below:

"Taxman's" Tip: Litigation and Arbitration Video

To learn more about the Litigation and Arbitration process, read Paul's article from the September 2016 edition of REDNews by clicking on the box below.

"Taxman's" Article on Litigation and Arbitration

REDNews, Your Commercial Real Estate Marketing Source, September 2016, p. 20

Litigation and Arbitration are a Viable 3rd Step in the Property Appeal Process

The clock is ticking... You only have 45 days to file Arbitration, or 60 days to file Litigation, from the date of your ARB Final Order!

 

Did you get a bad result at your county appraisal district ARB hearing?

• Filing a Judicial Appeal or Arbitration can save you nearly 10% more on average!
• BTA has specialized in Litigation and  Arbitration for the past 5 years.
• BTA's Senior Property Tax Consultants and Tax Agents are especially trained in the BTA Way on Judicial Appeal Methods to save you money on your tax bills.

 

Sign up with the best Arbitration and Litigation Teams in the business!

Bettencourt Tax Advisors, LLC (BTA) will be accepting on line sign-ups for residential and commercial properties in Harris County only. Please go to the sign up page and follow the directions.

If you would like to sign-up a commercial property only in Brazoria, Fort Bend, Galveston, and Montgomery counties, contact CommercialServices@btanow.com

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2016 is seeing property tax valuations increase around the state.

Taxpayers have had the opportunity to let their voices be heard at the Texas State Senate Select Committee on Property Tax Reform & Relief. Go to http://www.senate.state.tx.us/75r/Senate/commit/c632/c632.htm to view videos of past meetings around the state including the hearing on May 10th held at the University of Houston with over 600 citizens and government representatives in attendance. It was revealed at the May 10th Senate Select Committee on Property Tax Reduction hearing that 2015 property tax final valuations in Harris County increased an astonishing 28.6% overall from the previous year.

As you may know, property tax valuations increased throughout the Houston metro area in 2016. The residential property value increases in many neighborhoods are in the 3-11% range with over half of Harris County affected. The commercial sector is seeing across the board increases close to 20% on noticed value for the third year in a row. In the surrounding counties, expect to see continued increases in property tax valuations. Galveston County has already shown significant increases in beachside property and condominium noticed values. Property tax valuations are continuing to go up and BTA's experienced team is already at the appraisal districts fighting to reduce these values.

 

Average Percent Change by Market Area 2016: View Map

Heat Map-Concentrations of Recent Residential Sales 2016: View Map

Boom, Recession, Recovery 2007-2016 for Residential Properties: View PDF

Boom, Recession, Recovery 2007-2016 for Commercial Properties: View PDF

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2015 Harris County property tax valuations are increasing for a larger base of property owners than in 2007!

Both residential and commercial property owners will feel the effects throughout Harris County. For graphic representations of these increases go to the HCAD links below.

2015 Harris County Residential properties are up for nearly 90% of the homes in Harris County. Sales have been strongest for homes in the $80,000 - $500,000 range, as well as in neighborhoods with highly ranked schools.

Average Percent Change by Market Area: http://gis.hcad.org/2015/Percent_Change.aspx

Heat Map_Concentrations of Recent Residential Sales_January 1,2014 through January 31,2015: http://gis.hcad.org/2015/Sales.aspx

Boom, Recession, Recovery 2007-2015 for Residential Properties: http://gis.hcad.org/2015/9yrs3sRes4_7_15Sm.pdf

2015 Harris County Commercial Property Reappraisals have continued their climb in property tax valuations: APARTMENTS UP 22% OFFICES UP 12% RETAIL UP 21% WAREHOUSES UP 23% LAND UP 23%

Boom, Recession, Recovery 2007-2015 for Commercial Properties: http://gis.hcad.org/2015/9yrs3sCom4_7_15Sm.pdf