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Real Estate | 2 min read

Practical Tax Tips for Commercial Real Estate Transactions

When it comes to buying or selling commercial real estate, the process can be complex. However, whether you are buying or selling, considering potential property tax implications early in the process can benefit you long after you’ve closed on the property.

How Could a Transaction Affect the Assessment?

Buyers and sellers should learn the property’s current tax valuations early on, and determine whether the transaction affects the assessment, either favorably or unfavorably. For instance, if you’re a sophisticated buyer, you may consider engaging a property tax consultant while doing your due diligence to determine whether the assessment might increase or decrease, and at what pace.

Buyers and sellers should learn the property’s current tax valuations early on, and determine whether the transaction affects the assessment, either favorably or unfavorably. For instance, if you’re a sophisticated buyer, you may consider engaging a property tax consultant while doing your due diligence to determine whether the assessment might increase or decrease, and at what pace.

5 Questions for You and Your Lawyers to Consider

Here are a few questions for you, your brokers, and your lawyers to consider while purchasing or selling real estate. Although written from the perspective of a typical sale, these questions could be helpful in other situations when real estate changes hands.

  1. Given the expected closing date and applicable deadlines, who will be responsible for filing a protest/lawsuit for the current year?;At what point (if any) will responsibility for handling the protest or lawsuit pass from the seller to the buyer?

  2. Will a new tax consultant/lawyer be engaged, or will the seller’s consultant and lawyer be engaged by the buyer to continue handling any existing protest or suit? Who will ensure compliance with the protest and other deadlines if closing is delayed?

  3. If the sale is for less than the assessed value, who will protest on this basis? Who will receive what share of any resulting tax refunds?

  4. If a property tax valuation suit for prior years is pending on the closing date, will the seller’s lawyer continue the suit? Who will receive any resulting refunds?

  5. When will the appraisal district find out the purchase price? Should the buyer or seller report the purchase price?

Buying or selling commercial real estate can be complicated, stressful, and costly if you aren't prepared to handle all aspects of the transaction. Taking a proactive approach to the property tax implications can ultimately benefit you in the long run.

If you think you may be overpaying on your commercial property taxes, don’t wait until it’s too late to speak to a professional. Click here to request a free property tax consultation.

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Adam Wetherell

Adam Wetherell helps commercial real estate and personal property owners reduce their property taxes. He handles business development for the Ad Valorem Tax Advisors division of SWBC. As a San Antonio native and graduate of the University of Texas at San Antonio, Adam joined SWBC after spending many years in residential and commercial interior finish out as well as technology all throughout Texas.

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