Let’s face it! Property taxes are getting more expensive by the year. Even if you plan to protest your upcoming assessment, it’s beneficial to have a forecasting and budgeting plan in place for when it’s time to pay your commercial property taxes.
Here’s a look at some of our trusted forecasting tips to help you avoid an expensive surprise on February 1, 2023.
Look to the Past as a Prediction
Unless you’ve made significant property changes at your location or current tax legislation changes in your area, it’s likely that your property taxes 2023 property taxes will look something like the taxes you paid in 2022.
Past years serve as an excellent baseline and can help you start saving now for what you are likely to pay next February. If numbers change, they won’t be too far off from last year’s baseline number.
Know Your Property’s Tax Ratios
A jurisdiction’s tax ratios determine the assessed value of dollar terms that your county assessor places on properties they review. Once you know how your tax assessor approaches properties in your area similar to yours, you can better understand what your property taxes will look like in the coming year.
Remember, tax ratios vary by the type of property involved. So, double-check with your assessor to determine the ratios that apply to your property.
Analyze the Value Trends of Your Past Taxes
Knowing last year’s property taxes may not be enough if you want a detailed estimate of your property taxes. Analyzing the historical trends of the ebb and flow of your property taxes can help you find valuation trends that can make your predictions more accurate.
Property tax software and the help of a tax professional can help you dig into a few years’ worths of property tax assessments and really examine how much your property taxes are increasing every year.
Talk With Your Neighbors
If you have neighboring commercial properties in your area, it couldn’t hurt to form some relationships and find out how their property taxes measure up compared to yours.
These conversations can help you and your neighbors gauge potential property tax costs in the next year.
Take Construction and Additions in Mind
Even when looking at past property tax payments, if you know you have construction or renovation projects in progress or on the horizon, you’ll need to consider how these changes could impact your property taxes.
From something as small as a wood deck addition to your restaurant to a large remodel that includes an expansion, several improvements can increase your property taxes.
If you have questions about the long-term ramifications of your renovation, reach out to your local tax assessor or a qualified tax consultant that knows how your jurisdiction runs.
Keep a Property Tax Consultant on Your Side
Finally, working with a property tax professional is the easiest way to forecast and budget your commercial property taxes. At the Hegwood Group, we are a team of Dallas property tax consultants that specialize in commercial real estate property tax. Not only can we help you forecast next year’s property taxes, but we can also guide you through the assessment protest process when the time comes.
We’re ready to help you make your commercial property taxes stress-free. Contact us today to schedule your free consultation with a member of our team.