4 Reasons To Outsource Your Property Tax Management To The Pros

Posted by Anne Sheehan on Jan 12, 2016

Is outsourced property tax management the right choice for your commercial real estate portfolio?Looking back to last year, you may recall JLL’s report on commercial real estate trends in 2015 highlighting some interesting data on outsourcing in the real estate world.

Outsourcing facility and property management, as well as managed lease administration, is becoming commonplace. But, one still-underutilized outsourcing opportunity in commercial real estate is property tax management.

Benefits Of Outsourced Property Tax Management

Too often, corporate real estate taxes are treated as just another line-item expense, when in fact, there are many opportunities to significantly reduce that which amounts to both your largest cost of occupancy and largest state and local corporate tax obligation. However, it takes highly specific tax code knowledge and lots of time to research, assess and unlock the most advantageous tax-savings opportunities.

Property owners across the U.S. are rapidly coming to understand the array of reasons why a managed commercial property tax service makes good sense for business.

Consider the following benefits that an outsourced tax management service could provide your commercial property portfolio.

1) Stop Getting Blindsided By Large, Unexpected Tax Increases: Commercial property assessments – and the resulting tax bill – are known to increase dramatically and without warning.

Unmonitored commercial property tax assessments present a noteworthy business risk. Unless you’re closely monitoring your tax assessments every year, you might get hit with an unbudgeted and unexpected expense. If you’ve budgeted to pay one amount and your assessment comes back saying you owe double or triple what you’ve planned for, it’s going to be a hard pill to swallow.

Getting blindsided like this could lead you to unknowingly (and unnecessarily) overpay because you’re not in a position to effectively fight the increase. There’s an appeals process that you can use to your advantage, but deadlines are tight and it’s easy to fail to realize your problem until it’s too late.

When you outsource your property tax management to experts, you stay ahead (and come out on top) of these risks.

2) Reduce The Resource Burden Property Tax Management Can Become: The administrative burden of managing corporate property taxes is intense. To do it properly, you must have a staff of full-time property tax specialists on your payroll. In reality, you’re probably going to place that burden on the team you already have, but they’re going to be much less efficient at managing this cost than a team of experts dedicated to the trade.

When you outsource property tax management, you shed the burden of ensuring that you pay nothing more than your fair share of tax, which gives you more time to focus on what you do best.

3) Become Proactive, Not Reactive: When it comes to property taxes, it’s always in your best interest to be proactive rather than reactive. Would you rather receive your tax assessment in the mail, have a heart attack because the county is saying you owe three times what you’ve planned for and then panic about how you're going to afford it; or would you prefer to have foresight into assessment increases and access to market data to prove what your property is truly worth and what taxes you actually owe? When you’re proactively managing your commercial property taxes, you’re much less likely to leave money on the table or overpay.

Most businesses simply don’t have the time to be proactive about property taxes, which is why many decide to outsource this laborious task.

4) Save Money By Reducing Your Cost Of Occupancy: Are you taking full advantage of the benefits built into your local tax code? If you’re not, don’t think your local assessor is going to call you up to tell you about all the money you could be saving. According to RPTA’s own research, 9 in 10 companies currently overpay property tax.

It’s no wonder why. To really save money by reducing your corporate tax burden, you have to be intimately familiar with local taxing jurisdictions and market rates, be aware of multiple deadlines and regulations and have the time to take necessary action.

Unless you have someone on your staff who knows your commercial property taxes inside and out, you’re likely missing out on huge tax-savings opportunities – sometimes upwards of 30 percent.

Learn More About Effective Commercial Property Tax Management

Stop treating your property taxes like a fixed cost you dutifully pay year after year. With the right insight and some well-timed action, you can significantly reduce your overall cost of corporate occupancy through substantial tax savings.

Learn how to identify if you're overpaying taxes and how to take action in our free e-book on effective commercial property tax management.

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