The Role of Property Tax Consultants in Commercial Real Estate Transactions

Property taxes play a crucial role in the profitability of any commercial real estate investment. Unfortunately, misunderstandings on how these taxes are calculated can lead your organization to pay more than it actually owes.

 That’s where property tax consultants provide invaluable support. These professionals specialize in evaluating tax liabilities, identifying risks, and ensuring that investors have a clear picture of what they’re buying or selling. Their insight can mean the difference between a sound investment and a costly oversight.

Uncovering Hidden Liabilities Before Closing

One of the most important services a property tax consultant offers is due diligence. Before a commercial property changes hands, the consultant conducts a detailed review of the current assessed value, recent appraisal history, tax rates, and any pending protests.

Without this step, a buyer might project operating expenses based on outdated tax rates, only to face a significantly higher bill the following year. A tax consultant helps you anticipate these increases and factor them into your investment decision, protecting your cash flow and net operating income (NOI) from surprises.

Supporting Better Underwriting and Pricing

There are a few things more important when it comes to underwriting commercial properties than an accurate tax projection. Lenders want to be confident that the businesses they fund are operating within projected NOI and that their cap rates reflect a realistic operating cost. When you work with a consultant, you can rest easy knowing they can help by modeling how your taxes might change after you make your next acquisition.

Their expertise also helps sellers price properties more effectively. If a tax protest is pending or if there’s potential to reduce the assessment, a consultant can quantify the opportunity, helping the seller present the property in a more favorable light to buyers.

Navigating Tax Implications in Lease Negotiations

For leased commercial properties, property tax obligations are often passed through to tenants. This is especially common under so-called triple net (NNN) lease structures. A consultant ensures these obligations are clearly defined and correctly allocated. They can also help landlords and tenants negotiate terms related to tax increases, caps, or shared appeal rights.

Providing Post-Transaction Appeal Strategy

Once a transaction closes, property tax consultants continue to add value. If the new valuation comes in higher than expected, the consultant can immediately evaluate whether there are grounds for appeal. Acting early is essential, as Texas law provides a limited window to file a protest with the Appraisal Review Board (ARB).

Consultants prepare the necessary documentation, represent the owner in hearings, and work to reduce the assessment, often achieving significant savings within the first year of ownership.

Talk to the Team at Wilson & Franco Today

Commercial real estate is a complex, high-stakes industry where every line item matters. Property taxes are too important to leave to chance, but you have the right to seek the support of experienced professionals.

At Wilson & Franco, we are here to consult with you on your tax needs. We will work tirelessly to help your organization avoid overpaying for what is actually owed. Reach out for a confidential consultation today to learn more.