You MAY Reduce Real Estate Taxes
if Your Commercial Property is Overvalued
to appeal your property taxes
Don’t be surprised if your real estate taxes went up this year. Cities and counties face historic budget problems and, as your property tax statement may show in the next several weeks, they are making up much of the shortfall on the property tax rolls. Real estate taxes are based on the assessor’s estimate of the market value of your property. If your real property is properly valued, there may be nothing to be done about the tax itself. However, if the tax value of your property exceeds what you could have received for it a year ago on the open market you may be able to get some tax relief. That’s where we can help.
The county bases your real estate taxes payable in 2010 on the assessor’s estimated fair market value of your property as of January 2, 2009. The higher the value was then, the higher the tax is now. State law specifies that, for property tax purposes, property is to be valued at its fair market value every five years. Yet an assessor cannot thoroughly appraise every parcel. To satisfy this requirement, assessors may rely in part on periodic mass appraisals. While most assessors have admirably tried to keep up with the falling market, a surprising number of properties remain overvalued. Furthermore, bulk appraisals do not take into account the peculiar negative characteristics of a given parcel, which may differentiate it from the market.
A recent appraisal or an arm’s length sale of the property at a price below the assessed market value may provide good reason to appeal. Sometimes the stream of income generated by the property may not justify the assessed value. Sales data from comparable properties may suggest a lower value for your property. Development costs may also play a role in determining the value of newer buildings.
If you have reason to believe your commercial property is overvalued—based on its rental income, recent appraisal, recent sale or comparable sales—but have not yet acted on the problem, the time to act is now. Owners, tenants, even mortgage lenders may still file a real estate tax protest to appeal the assessor’s estimate of market value.
Petitions must be filed on or before April 30, 2010. To meet the filing deadline,
contact your Winthrop & Weinstine, P.A., attorney or
Joanne Matzen at (612) 604-6641 as soon as possible if you would like to protest the value of your multifamily, office, warehouse, retail or industrial property and it is currently assessed at $1 million or more.
About Winthrop & Weinstine, P.A.
Winthrop & Weinstine is a dynamic and growing law firm that passionately champions client issues. With 89 attorneys in a broad range of practice areas, the firm offers the experience and expertise to serve the diverse needs of clients ranging from individuals to Fortune 500 corporations. For more information, visit our Web site.
NOTICE: This newsletter is a periodic publication of Winthrop & Weinstine, P.A., and should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult your legal counsel concerning your situation and any specific legal questions you may have.