Like death, taxes may be certain, but they certainly don’t need to increase each year. If the recovering economy hasn’t yet benefited your commercial property but the assessor assumes it has, a tax appeal may be appropriate. Since real estate taxes are charged as a percentage of value, an over-valuation of your parcel means you are paying too much in taxes. We may be able to help you reduce your real estate tax liability. You must, however, act quickly. The general deadline for challenging property taxes payable this year is April 30, 2014.
How Assessed Market Values Are Calculated
The county bases your real estate taxes payable in 2014 on the assessor’s estimated fair market value of your property as of January 2, 2013. The higher the value was then, the higher the tax is now. State law specifies that, for real estate tax purposes, assessors must determine the market value of each property at least every five years, yet, as a practical matter, an assessor cannot thoroughly appraise every parcel. The assessor may, therefore, rely in part on periodic mass appraisals of similarly situated properties and sales data from the preceding 15 months. Bulk appraisals do not take into account the peculiar characteristics of your parcel, which may differentiate it from market averages.
Reasons to Appeal
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 of comparable properties may suggest a lower value for your property. Development costs may also play a role in determining the value of newer buildings. A significant change in use may even justify a reclassification of the property to a different class rate.
The Time to Act is Now
If you have reason to believe your commercial (e.g., office, retail, industrial, or multifamily) property is overvalued by more than $500,000, but you have not yet acted on the problem, contact us as soon as possible to discuss filing an appeal by the deadline. Act now to avoid overpaying on your real estate taxes.