By Rodney Hegwood, Founding Partner
A commercial property tax bill is an invoice sent from a local government to the owner of a property detailing the amount of taxes owed. In Dallas County, for example, bills are typically issued once a year, usually in October or November, and due by January 31st of the following year.
The tax bill covers the previous calendar year’s property taxes, which are based on the property’s appraised value as of January 1st of that previous year. Owners can also choose to pay their taxes in installments throughout the year, with the first installment due November 30th and subsequent installments due the last day of each month until that final payment January 31st.
It’s a good idea to confirm your specific due dates and payment options for your commercial property tax bill with the Dallas County Tax Office, but that doesn’t really spell out everything you’re going to need to pay the bill.
You can create an online portfolio with all of your properties at the Tax Office site, which means you won’t have to go through the process of manually searching for each property before you pay the bill. Otherwise, that’s the first step in accessing your bill to review.
Now, let’s break down each part of a typical commercial property tax bill and see what information it can give us. It’s easy to understand if you remember to start with the valuation and move through the various taxes, deductions and exemptions as they appear on the bill until you end up at the final tax.
Property Identification
This section includes basic information about the property: the address, its owner’s name and the parcel or account number.
Taxing Jurisdiction
This section lists the name and contact information for the government entity responsible for assessing and collecting property taxes. This could be the city, the county or the state, depending on the location of the property.
Property Valuation
Here we find an assessment of the value of the property, which is used to determine the taxes owed. The valuation may be based on the property’s market value, income potential or replacement cost.
Taxable Assessment
This next section takes that assessed value and subtracts any exemptions or deductions like the freeport exemption, pollution control exemptions, charitable or nonprofit exemptions and economic development incentives.
Tax Rates
Here you can find the tax rates that apply to your property, which are set by the local government. The tax rate will be expressed as a percentage of the number we just arrived at, the taxable assessment.
Tax Calculation
This section shows how the taxes owed are calculated, based on the taxable assessment and tax rates. The total amount owed may be broken down into different categories of taxes like general property taxes, school taxes or special assessments. All of these have their own rules, about which you can find out more at the Dallas Tax Office’s customer site.
Payment Information
This section provides instructions on how to pay the taxes owed: due date, acceptable payment methods and contact information for the tax collector.
Exemptions and Credits
This section lists any exemptions or credits that apply to the property, which can reduce the amount of taxes you owe. Common exemptions include owner-occupied properties, charitable organizations and agricultural land.
Delinquency Information
This section warns you about the consequences of failing to pay your property taxes on time. Delinquent taxes may accrue interest, result in penalties, or even trigger a tax lien or foreclosure.
Hire Commercial Property Tax Consultant
By understanding the components of a commercial property tax bill is essential for any property owner or investor. By carefully reviewing each section of the bill, property owners can ensure that they are being charged the correct amount of taxes and take advantage of any available exemptions or credits.
If you are a commercial property owner in the Dallas-Fort Worth area, the Hegwood Group can help you navigate the complexities of property taxes and ensure that you are paying only what you owe. Our team of experienced professionals can review your tax bills, file appeals and negotiate with local authorities on your behalf, saving you time, money and stress.
For more about our property tax consulting services or to schedule a consultation, please visit our website or contact us today. Let us help you maximize your property’s value and minimize your tax liability.
About the Author
Rodney Hegwood, Principal and Founding Partner
Rodney Hegwood founded The Hegwood Group in 2003. Since that time, they have significantly reduced commercial property taxes for many businesses throughout DFW through property tax appeals and general consulting.
