Property Tax Appeal Season in Review: What Trends Did We Observe?

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Each year following the busy real estate tax appeal season, we like to reflect as a Company on the important lessons we learned and trends we observed. Both of these discussions help us look ahead to the next year, challenging us to predict and anticipate what’s to come during the next property tax appeal cycle.

As we’ve discussed before, it’s no secret that commercial real estate property values went up in 2016. While in past years a normal increase resulted in a 5-10 percent spike, many property owners saw increases up to 40 or 50 percent on their proposed value notices this past April and May. Though we all know that these preliminary notices do not dictate final property tax bills since owners have the opportunity to protest their property tax valuations each year, the initial shock was enough to throw many into a panic.

An important observation to note this year is the level of increase by class type over the last few years. Class A properties’ values have been increased steadily since the Great Recession, and Class B properties were beginning to be hit with higher valuations in 2015. However, the appraisal districts struck the Class B and Class C properties harder in 2016 than in previous years. These properties experienced their largest valuation increases in the last 5-10 years, so owners were surely taken by surprise.

Appraisal districts throughout North Texas have begun to release their final 2016 valuation numbers, and we’ve included a snapshot below. We’ll continue to update the list as numbers come in.

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