On February 2015, the Texas Building Owners and Managers Association (BOMA) will hold an event designed to protest against the way appraisals are conducted in the state. The goal of this initiative is to reduce the commercial property tax burden on Houston owners who have seen the valuation of their properties skyrocket over the past few years. This article discusses how the Houston economy will be negatively impacted if nothing is done to alleviate the tax burden on property owners.
Why are property values increasing?
Oil resurgence has been identified as the most influential factor in these increases. This has given local states the opportunity to replenish their coffers by applying high tax rates on property owners. According to its appraisal district, Harris County is one of the local counties that witnessed a significant increase in its commercial property valuations, which jumped by $35 billion since 2007.
How will this affect the Houston economy?
As taxes keep on increasing, it’s very likely that they be passed on to corporate tenants. This will ultimately lead to two economic issues:
- Slower levels of development
- Fewer employment opportunities
Businesses that won’t be able to afford commercial space in Houston because of the rent hikes will be forced to relocate in remote areas. Those that won’t see relocation as an option will see their profits shrink, and try to do whatever they can to lower overall costs. Such businesses will be unwilling to create new jobs for recent graduates in the near future.
Appraisal methods are at the heart of the current problems that most Houston property owners are facing. The best way to protest increasing taxes is by getting together, such as at the BOMA event, and pushing for some legislative changes on how property valuation is calculated in the state of Texas.
Please contact us for more information on commercial property tax.