Every state and local taxing jurisdiction has different rules and regulations. When you’re dealing with a portfolio that has dozens (if not hundreds) of properties, it’s tough for busy executives to manage every aspect, especially commercial property tax payments.
There’s a large administrative and expertise burden on anyone charged with managing a commercial property portfolio. That’s particularly true if you’re trying to achieve commercial property tax savings, rather than just paying what you’re told and moving along with business.
For executives and decision-makers trying to lower their company’s operating costs, managing and minimizing commercial property tax payments is critical.
Here are four tips to get your real property tax savings started:
- Establish an accurate calendar and detailed property list: Many corporate executives and CFOs may not actually know how many properties their company owns, let alone the states and counties where their assets exist.
Getting an accurate list of what’s in your commercial property portfolio is a rudimentary but essential step toward managing and minimizing commercial property tax payments. The list also needs to include detailed property characteristics.
Next, create a calendar of important due dates and events, like assessment return and appeal due dates plus tax bill payment dates. Some jurisdictions have commercial property tax dates that remain consistent each year, while others vary year over year. An accurate calendar helps you manage these details.
- Research resources for statutes and local regulations: General state-issued guidance on the definitions of value and what’s taxable property only takes you so far. Since so much of commercial property tax valuation is done on a jurisdictional level, you need a strong understanding of local statutes and taxing regulations.
If your property is scattered across multiple states, you need to know what’s taxable, what’s considered real estate versus personal property, what’s exempt, and how property is valued, etc.
- Establish relationships with your assessors: If you’re a corporate property manager with properties around the country, you should get to know the tax assessors in the counties where you have property. Just because you work in Chicago doesn’t mean you can’t establish a relationship with an assessor in Atlanta if your business owns property there.
Then, go a step further and build on that relationship by learning how they apply the fundamentals of valuation theory. Doing so helps you to communicate better with tax assessors and speak their language.
- Be flexible. One size doesn’t fit all: If you understand the property tax value of your 500,000-square-foot office at headquarters and have worked hard to successfully keep your tax payments low, you probably know all you need to about managing commercial property taxes, right? Not necessarily. Remember that what works in one location won’t necessarily work everywhere else.
You must know, by jurisdiction, what defines commercial and personal property, especially if you want a property tax valuation to work in your favor. In the world of commercial tax assessment, one size does not fit all. For instance, the electrical connections for the computers in your data center might be considered personal property in one jurisdiction but real estate in an another.
If you’re interested in lowering your commercial property taxes but daunted by the complexities and challenges of doing so, remember there are opportunities to partner with commercial property tax experts that can help you do this work on your behalf.
Download RPTA’s free whitepaper, “7 Signs You Might Be Overpaying Your Commercial Property Taxes" for more insights into the commercial property market and to learn how to uncover hidden property tax savings.