Can you protest commercial property taxes in Texas?

Yes. Every Texas property owner can protest the appraised value of any property they own, including office, retail, industrial, multifamily, hotel and vacant commercial land. File a Notice of Protest with your county appraisal district by May 15 or 30 days after your Notice of Appraised Value was delivered, whichever is later. In 2027, May 15 falls on a Saturday, so the deadline moves to Monday, May 17.

How is commercial property valued for property tax in Texas?

Appraisal districts use three approaches: the income approach (net operating income divided by a capitalization rate), the cost approach (land value plus replacement cost minus depreciation) and the sales comparison approach (recent sales of similar properties). Income-producing property such as offices, retail centers and apartments is usually valued with the income approach.

What is the best evidence for a commercial property tax protest?

It depends on how the appraisal district valued the property. For income-valued property, bring two to three years of income and expense statements, a current rent roll and vacancy history. For any commercial property, an unequal appraisal analysis showing that similar properties of the same use are appraised at a lower value per square foot is often the strongest argument, because it uses the appraisal district's own numbers.

How much is commercial property tax in Texas?

Commercial property tax is calculated by multiplying the appraised value by the combined tax rate of every taxing unit that covers the property (county, city, school district and special districts), with no homestead exemption. At 2026 adopted rates, the combined rate in major Texas cities runs from about 1.6% to 2.4% of appraised value, so a $2 million building typically owes about $32,000 to $48,000 a year.

Is it worth protesting commercial property taxes?

Usually, yes. Filing is free, the appraisal review board cannot raise your value because you protested, and commercial property has no homestead cap, so every dollar of overvaluation is fully taxed. A reduction also lowers the starting point for next year's appraisal.

What is the difference between a commercial property tax protest and an appeal?

In Texas, a protest is the first stage: you challenge the value with the appraisal district and its appraisal review board (ARB). An appeal comes after the ARB rules, through binding arbitration (property valued at $5 million or less), the State Office of Administrative Hearings (property valued over $1 million) or district court. Other states call the whole process an appeal.

How does a property tax reduction affect commercial property value?

Property tax is an operating expense, so a lower tax bill raises net operating income (NOI) dollar for dollar. Because commercial property is valued and financed on NOI, each $1,000 of annual tax savings supports about $13,300 of value at a 7.5% cap rate. It also improves debt service coverage when you refinance.

Can you avoid property tax on commercial property in Texas?

You can't avoid it, but you can lower it. The main sources of commercial property tax relief in Texas are to protest the appraised value every year, claim the $125,000 business personal property exemption, file an accurate rendition by April 15 and check whether your property qualifies for exemptions such as freeport inventory.

Should I hire a consultant or an attorney for a commercial protest?

Most commercial protests are settled at the informal or ARB stage, where a licensed property tax consultant is the usual choice and typically works on contingency. An attorney becomes more important if the case goes to district court.

How much does a commercial property tax protest service cost?

Most Texas protest firms work on contingency, so you pay nothing unless the value comes down. Ballard Property Tax Protest charges 1% of the assessed value reduction we achieve on the protest, with no upfront cost. For example, a $360,000 reduction means a $3,600 fee, while the tax savings at a 2% rate are about $7,200 in the first year alone.

Commercial Property Tax Protest in Texas (2027 Guide)

Commercial Property Tax Protest in Texas

A commercial property tax protest is how a Texas business owner or real estate investor challenges the value the county appraisal district puts on an office building, retail center, warehouse, apartment complex or other commercial property. Whether you own the building your business operates in or property you rent to tenants, property tax is usually one of your largest operating costs, and often the single largest. Commercial property gets no homestead exemption and no 10% appraisal cap, and in most Texas cities a combined tax rate of about 2% applies to every dollar of value. When you pay that bill yourself, every dollar the value comes down goes straight to your bottom line.

This guide is written for commercial property and business owners. It covers what a reduction is worth to your cash flow and property value, how appraisal districts value commercial property, the arguments that win reductions, what to check for each property type (apartments and rental portfolios, retail and investment property, office, industrial, owner-occupied business property, hotels and land) and the 2027 deadlines. If you own a home, see our residential vs. commercial property tax guide instead.

Quick Answers

Who can protest: any owner of commercial real estate or business personal property in Texas, or an agent they authorize
2027 deadline: May 15, or 30 days after your Notice of Appraised Value was delivered, whichever is later. May 15, 2027 is a Saturday, so the deadline moves to Monday, May 17, 2027
Main grounds: market value (the value is higher than the property would sell for) and unequal appraisal (it is valued higher than comparable properties)
Key evidence: income and expense statements, rent roll, vacancy history and same-use comparable properties
Cost to file: free. The ARB cannot raise your value because you protested
What a reduction is worth: the tax savings every year the lower value holds, plus higher net operating income. At a 7.5% cap rate, each $1,000 of annual savings supports about $13,300 of property value
Cost to hire Ballard: 1% of the assessed value reduction we achieve, nothing upfront

Own commercial property? Start your commercial property tax protest. You pay 1% of the reduction we achieve, and nothing if your value doesn't come down.

What Is a Commercial Property Tax Protest?

Every January 1, your county appraisal district (CAD) sets a market value for each property in the county. Local taxing units then apply their tax rates to that value. A protest is a formal challenge to that value (your commercial property tax assessment), filed with the CAD and decided by its appraisal review board (ARB) if it isn't settled first.

The filing steps are the same for every property type (see our Texas property tax protest guide). What sets commercial protests apart is how the value is built, which evidence moves it and how much money is at stake.

Why Commercial Owners Should Protest Every Year

Commercial property pays the full rate on the full value. Commercial property tax is calculated as the appraised value times the combined rate of every taxing unit that covers the property. No homestead exemption or 10% cap applies, so the bill tracks the appraised value directly. At 2026 adopted rates, the Texas commercial property tax rate in major cities ranges from about 1.6% to 2.4%. See the full list in our Texas property tax rates by county guide.

Appraised value	Tax at a 2.0% combined rate	Savings from a 10% reduction
$750,000	$15,000	$1,500 a year
$2,000,000	$40,000	$4,000 a year
$5,000,000	$100,000	$10,000 a year

The 20% cap is scheduled to end. Since 2024, non-homestead real property valued at or below a threshold ($5,320,000 for 2026) has had its appraised value increases capped at 20% a year. The cap is set to expire December 31, 2026 unless the Legislature extends it in the 2027 session. If it lapses, there is no limit on how much a commercial property's value can rise in a single year, and protesting becomes the only check on an increase. Properties above the threshold never had the cap. See our 2026 Texas property tax law changes for details.

Mass appraisal misses details. CADs value thousands of commercial accounts with models built on market-wide rents, vacancy and cap rates. Those models can't see a lease that is below market, a tenant that left in December, a roof that needs replacing or a building that is a different use than its neighbors.

What a Commercial Property Tax Reduction Is Worth to Your Bottom Line

When you pay the property tax yourself, a lower appraised value shows up in four places:

Cash flow. The tax bill, or the monthly tax escrow on your loan, drops by the reduction times your combined rate.
Net operating income. Property tax is an operating expense. For apartments, RealPage estimates taxes run about 30% of total operating expenses, and they are often the largest single line item for offices and retail too. Every dollar of savings raises NOI by a dollar.
Property value and financing. Commercial property is valued and financed on NOI. At a 7.5% cap rate, each $1,000 of annual savings supports about $13,300 of value, and a higher NOI improves your debt service coverage ratio when you refinance. Buyers often underwrite taxes based on the price they pay, so treat this as support for value rather than a guaranteed gain.
Next year. The appraisal district starts next year's value from where this year's settled, so a reduction keeps paying off.

Example: an office building appraised at $4,000,000 is reduced to $3,600,000 at a 2.0% combined rate.

Item	Amount
Value reduction	$400,000
Annual tax savings	$8,000
Ballard fee (1% of the reduction)	$4,000
Net savings in the first year	$4,000
Value supported by the higher NOI at a 7.5% cap rate	About $106,700

How Texas Appraisal Districts Value Commercial Property

Commercial property can be valued three ways, and each can produce a very different number. Knowing which one the CAD used tells you what evidence will move it.

Income Approach

The income approach is the standard method for income-producing property: offices, retail centers, industrial buildings, apartments and hotels. It values the property by the income it can produce.

Property Value = Net Operating Income / Capitalization Rate

Component	Amount
Potential gross income	$300,000
Less vacancy and collection loss (10%)	-$30,000
Effective gross income	$270,000
Less operating expenses	-$70,000
Net operating income (NOI)	$200,000
Capitalization rate	8.0%
Indicated value	$2,500,000

Small changes in the inputs move the value a lot. At a 7% cap rate instead of 8%, the same building is valued at $2,857,000. That $357,000 difference costs about $7,100 a year in taxes at a 2% combined rate.

Where income-approach values go wrong:

Market rent set above what the property actually collects
Vacancy and collection loss set below the property's real vacancy
A cap rate that is too low for the property's age, location or tenant risk
Missing expenses: management, reserves, tenant improvements and leasing commissions

Cost Approach

Property Value = Land Value + (Replacement Cost - Depreciation)

The cost approach is used for newer buildings, special-purpose property (churches, schools, auto dealerships) and property that rarely sells or has no rental history. It is often wrong when it uses current construction costs without enough depreciation, or ignores functional obsolescence (outdated layout, low ceiling heights, too little parking) and economic obsolescence (a declining corridor, a rerouted highway, nearby environmental problems).

Sales Comparison Approach

The sales comparison approach compares your property to recent sales of similar properties, adjusted for size, age, condition and location (see how comparable properties are used). It works best for small commercial buildings and land. It is harder to use for larger commercial property because commercial sales are less frequent, no two properties are alike and Texas is a non-disclosure state, so sale prices are not public record.

The Strongest Grounds for a Commercial Protest

Unequal Appraisal

Under Texas Tax Code Section 41.43(b), a property's appraised value can't be more than the median appraised value of a reasonable number of comparable properties, appropriately adjusted. That is an unequal appraisal (or equity) argument, and it is often the strongest one for commercial property because:

It uses the appraisal district's own values, so the CAD can't dispute the source
It doesn't require proving what the property would sell for, which matters in a non-disclosure state
It works even when the property is valued at or below market value

The key is choosing comparables of the same use, not just the same quality class. A warehouse should be compared to warehouses, not to banks or restaurants in the same quality grade, which carry much higher values per square foot. The usual measure is appraised value per square foot of building area.

Example: a 20,000 sq ft warehouse appraised at $3,200,000 ($160 per sq ft). Six same-use warehouses in the same market area have a median of $142 per sq ft. The equity value is 20,000 x $142 = $2,840,000, a $360,000 reduction worth about $7,200 a year at a 2% rate. At Ballard's 1% fee, that protest would cost $3,600.

If the same-use median is at or above your value, an equity argument won't help, and the case needs to be built on market value instead. Learn more about how unequal appraisal works.

Market Value

The market value argument is that the CAD's value is higher than the property would sell for on January 1. For commercial property, that usually means rebuilding the CAD's income approach with your actual rents, vacancy and expenses and a market-supported cap rate, or showing sales of comparable properties at lower prices.

Errors in the Property Record

Check the CAD's property record before anything else. Common commercial errors:

Wrong building area or net leasable area
Wrong year built or effective age
Wrong property use or quality class (for example, Class A office for a Class B building)
Missing condition adjustments for deferred maintenance
Wrong unit count on multifamily property

A single wrong number can overstate a commercial value by hundreds of thousands of dollars.

Commercial Property Tax Protests by Property Type

Every commercial protest uses the same grounds and the same deadline, but what the appraisal district gets wrong depends on the property. Use this table to find the first thing to check, then see the section for your property type.

Property type	How CADs usually value it	First thing to check
Apartments and rental portfolios	Income approach (5+ units); sales comparison (1 to 4 units)	Market rent and vacancy vs. your rent roll
Retail and investment property	Income approach	Vacancy, rents in place and leasing costs
Office	Income approach	Building class, concessions and vacancy
Industrial, warehouse and flex	Income or cost approach	Same-use comparables and building features
Owner-occupied business property	Cost or sales comparison approach	Depreciation, obsolescence and double counting
Hotels	Income approach	Business value included in the real estate
Vacant and development land	Sales comparison	Floodplain, access and utilities

Your financials stay confidential. Under Texas Tax Code Section 22.27, income and expense information you give the appraisal district is confidential and can't be released to the public.

Tenant-Occupied Residential: Apartments and Rental Portfolios

This covers apartment complexes of five or more units and investors who own portfolios of single-family rentals, duplexes or fourplexes. Property tax is usually the largest expense on an apartment operating statement, and rents can't be raised mid-lease to cover an increase, so a higher appraisal comes straight out of NOI and debt service coverage.

The CAD values apartments of five or more units with the income approach, usually built on market rents per unit or per square foot and a market cap rate. Smaller rentals are valued like homes, with sales comparison, and get no allowance for tenant wear or rental condition.