Special Property Tax Projects

Getting the Number Right Before It Exists

Some properties have no track record to value against — either because they are not built yet, or because you do not own them yet. In both cases the tax expense that matters most is the one nobody has issued a notice for. It has to be projected, and the projection has to be defensible enough to underwrite against. Special projects typically encompass new construction, where the appraisal district is valuing a building from permits and cost estimates rather than from anything it can observe, and pre-acquisition projections, where you need to know what the property will actually cost in taxes after you close — not what it costs the seller today.
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What We Model

Both project types turn on facts the district does not have and the pro forma usually gets wrong. We work from the record rather than from assumptions.
  • Purchase price measured against the current assessed value
  • How the district has historically treated comparable accounts after a sale
  • Percent complete as of January 1, with supporting documentation
  • Actual construction costs against the district’s estimate
  • Lease-up pace, concessions, and absorption assumptions
  • Exemptions and abatements, and whether they survive the transaction
On the acquisition side, the most expensive mistake is underwriting off the seller’s current tax bill. A long-held asset can carry an assessed value well below what you are about to pay for it, and that gap does not survive the closing indefinitely. A deal that pencils on the seller’s number can stop penciling on yours. On the construction side, timing is what makes it urgent. Value is measured as of January 1, in whatever condition the property is actually in on that date — a half-finished project should not be valued as though it is open and leased. Lease-up is where owners most often lose: a building at sixty percent occupancy still offering concessions is not producing stabilized income, but the district’s model may already assume it is. Either way, the first value that goes unchallenged becomes the baseline the district builds on in every year after. We would rather look at a project before the first notice arrives than after.

Need Assistance?

Send us the property and we will take a look.
Call Us
214.919.8700
E-mail Us
info@estesbanks.com
Office Address
2323 Bryan Street Ste. 2100
Dallas, Texas 75201
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How We Work a Project

The sequence follows the deal or the build rather than the tax calendar, though the two have to meet at January 1 each year.

Scope the Project

Ground-up construction, an asset under contract, or both — each needs a different model.

Pull the District History

How this appraisal district has actually treated comparable new builds and post-sale accounts.

Model the Expense

A tax number you can underwrite against, with the assumptions behind it written down.

Document the Measuring Date

Percent complete, costs incurred, occupancy, and ownership as of January 1.

Protest the First Notice

We test the district’s value against what the property actually was, and file where it is worth filing.

Set the Baseline

Once the asset stabilizes, we work to establish a value that holds up in the years that follow.