How to Value a Property Tax Consulting Firm in 2026

Property tax consulting is an unusual services business. Unlike most professional services where revenue follows hours worked, property tax appeals firms earn on contingency — typically 25-40% of the first-year tax savings they generate for a client. That creates a business with feast-or-famine cash flow, non-obvious working capital needs, and a valuation framework that confuses most buyers and even some brokers.

I have worked on several property tax firm sales, and the single biggest issue is always the same: the owner values the firm on a headline revenue number that does not reflect the contingent, lumpy, and sometimes retroactive nature of the earnings. Let me walk through how buyers actually underwrite these businesses.

The Multiple Range: 3-5x SDE

Most property tax consulting firms sell in the 3-5x SDErange. The larger firms — those with $2M+ of EBITDA, multi-state coverage, and diversified client rosters — can reach 5-7x EBITDA, but they are the exception. The median firm is an owner-operated practice with 2-6 employees that trades on SDE because the buyer is almost always another practitioner or a small regional firm doing a tuck-in.

Larger strategic acquirers exist — Ryan LLC, Paradigm Tax Group, Altus Group, and Duff & Phelps (now Kroll) have all been active consolidators — but they typically only look at firms with $750K+ of EBITDA, real institutional clients, and clean data rooms. Below that threshold, you are selling to another small firm and negotiating on SDE.

Understanding the Contingency Fee Model

The typical engagement works like this: a commercial property owner signs an agreement letting the firm appeal their assessment. The firm reviews the assessment, prepares comparables, files the protest, and represents the client at the hearing or board. If the assessment is reduced, the firm earns a contingency fee — usually 25-40% of first-year tax savings, sometimes extending to 15-25% of second-year savings.

This creates several oddities in the financial statements that buyers need to understand:

• Revenue recognition lag. Work performed in January may not generate billable revenue until September when the appeal concludes. A growing firm can look like it has flat revenue while actually expanding rapidly.
• Uneven quarters. Most jurisdictions have concentrated appeal deadlines. Texas, Florida, and Georgia drive a big portion of industry revenue, and their deadlines bunch up in Q2 and Q3.
• Success rate drives economics. Two firms with identical revenue can have wildly different profitability based on win rates. A firm winning 70% of appeals is much more valuable than one winning 45%.
• Retroactive revenue. Big commercial wins can generate years of back-savings. A single Class A office building win can throw off a $300K fee in a year that otherwise looks ordinary.

Buyers value normalized, recurring earnings, not lumpy one-time wins. If you had a blockbuster 2024 because you won three big industrial appeals, expect the buyer to normalize your earnings to a 3-year average rather than underwriting TTM. That normalization can haircut the sale price 20-30% if you do not control the narrative.

Jurisdiction Expertise: The Real Asset

Property tax law is staggeringly local. Texas has its own protest process, hearing structure, and appraisal review boards. California has Prop 13 and specific change-of-ownership rules. Illinois has the Cook County Assessor's process and the Board of Review. New York City has the Tax Commission. Every state, and often every county, has its own rules, deadlines, and unwritten norms about what evidence works.

A firm licensed and active in 12 jurisdictions is a fundamentally different asset than a firm active in 2. Multi-state coverage is the single biggest driver of multiple expansion in this sector because it addresses the biggest buyer concern: concentration risk. If your firm does 85% of its revenue in one county, buyers discount aggressively because a single adverse legal or administrative change can crater the business.

The premium jurisdictions — where the work is most lucrative — are Texas (no state income tax shifts more weight onto property tax, and commercial protest volume is enormous), Florida, Georgia, Illinois, and New Jersey. Firms with strong presences in these markets trade at the top of the range.

Commercial vs. Residential: Different Businesses

There are really two sub-industries here, and buyers value them differently.

Commercial property tax consulting is the premium segment. Clients are commercial real estate owners, REITs, industrial operators, and multifamily owners. Appeals can generate $10K-$500K+ in savings per property, and the firm takes 25-40% on contingency. Margins are high (30-45% EBITDA), client relationships are sticky, and the work requires genuine appraisal expertise. These firms trade at 4.5-6x EBITDA when they have scale.

Residential property tax appeals is a different business. Volume-driven, smaller average savings ($300-$2,500 per case), marketing-intensive client acquisition, and thinner margins (18-28% EBITDA). Firms like Ownwell and O'Connor & Associates operate at scale here, but most residential practices are lifestyle businesses. They trade at 2.5-3.5x SDE.

Hybrid firms doing both exist. Buyers typically value them by segmenting the revenue and applying different multiples to each stream. If you run a hybrid, prepare your financials with the segments broken out — you will get a better price than if you force the buyer to do that work in diligence.

Client Retention and Multi-Year Contracts

The gold standard in this sector is a multi-year engagement letter that grants the firm the right to represent the client for all appealable years automatically unless the client opts out. These evergreen relationships are what turn a project-based business into a recurring revenue business, and they command much higher multiples.

Buyers will scrutinize your client list and ask three questions: How long has each client been with you? What percentage are on evergreen agreements? And what is your historical renewal rate? A firm with 85% of revenue from clients in year 3 or later, on evergreen contracts, with a 92% annual retention rate, is a genuinely valuable asset. A firm where every client is a one-time engagement is worth meaningfully less even if the EBITDA looks identical.

Technology and Data: The Emerging Differentiator

The better-run firms in this space have invested in technology that gives them real competitive advantage. What buyers look for:

Proprietary assessment databases. A firm with 10+ years of appeal outcomes, comparable sales data, and hearing results in a given jurisdiction has a moat that new entrants cannot easily replicate.

Case management software. Purpose-built systems like TotalPropertyTax, Rethink Solutions, or custom internal platforms that track every case, every deadline, and every outcome. Firms still managing cases in Excel are priced as lifestyle practices.

Client portals. Sophisticated commercial clients — REITs, private equity real estate funds, institutional owners — expect portals showing real-time status on every property in their portfolio. Firms without portals get squeezed out when these clients consolidate vendors.

What Kills Value in a Property Tax Firm

Jurisdiction concentration. If 70% of your revenue is in one county, one adverse ruling or one new law can gut the firm. Buyers price that risk in aggressively.

Owner-dependent hearings. If you personally argue every big case because your hearing reputation is the firm's competitive advantage, the firm does not transfer cleanly. Build a bench of capable associates who can handle hearings independently.

Lumpy revenue history. A 3-year history of $1.8M, $3.2M, $2.1M is harder to underwrite than $2.3M, $2.4M, $2.5M even if the total is the same. Try to smooth out the bookings and revenue recognition in the years leading up to sale.

No written contingency agreements. Handshake deals with long-time clients do not survive due diligence. Get every client onto a written engagement letter before going to market. Our pre-sale preparation guide has a checklist for exactly this.

The Bottom Line

Property tax consulting is a genuinely good business when it is built correctly — recurring commercial clients, multi-state coverage, strong hearing win rates, evergreen contracts, and a non-owner-dependent professional team. The challenge is that most firms are built the opposite way: single-jurisdiction, owner-dependent, lumpy, and contract-lite. If you are 2-3 years from selling, the preparation work is unusually high-leverage in this sector. I have seen owners double their sale price by spending 24 months systematizing their practice before going to market — and most of that work would have benefited them regardless of whether they sold. See how your firm benchmarks in our industry multiples guide.