Press "Enter" to skip to content

Commercial Properties Can Get Below Market Valuations thru Inequality of Appraisal

 

Large commercial property owners use Inequality of Appraisal to get taxable values below market — even below recent cost.  We can help.

For example, after the former Astroworld site in Houston sold for $77 million the Appraisal District valued it at $74 million. When the buyer argued Inequality; its taxable value was reduced to $31 million.  If other commercial property owners can use Inequality, why can’t you?

The Inequality argument says in effect that if a reasonable sample of similar properties to yours sold were under assessed — for  example, they sold for more than their district defined market values – then you are entitled to their median ratio of under assessment applied to your Market Value.  Inequality applies after Market Value is determined.

In a rising market many properties are appraised by the district well below their recent sale prices which, by definition, is market.  Thus, chances are the median appraisal ratio of similar properties to yours will be lower than 100%.  If, for example, it is 90% then you are entitled to a 10% reduction in market value — even after it has been reduced by agreement with the appraisal district or by action of the ARB.  This is especially valuable in the higher value ranges because the reduction is calculated as a percentage.

Inequality applies even if your appraised market value is already below what comparable sales will support.  Using the Astroworld case as an example, you may have purchased your commercial property for $10,000,000 on December 31.  The appraisal district may have valued it as of January 1 at $9,500,000.  But if a reasonable sample of properties “similarly situated or of the same general kind or character” is appraised at a median 90% of market, then your property is entitled to a 10% — or $950,000 — reduction to $8,550,000 which is a 15% discount from recent cost.

Since the burden to contradict our evidence lies with the District, we always include Inequality of Appraisal in your protest.  Many protesters fail to do so.

Inequality of Appraisal requires a sophisticated analysis and argument.  Property Tax Protest has years of experience with Inequality; it’s yours free when you hire us.

 

To sign up, simply return these two Documents. Send no money.

Return To Blog