How Often Are Commercial Properties Over-Assessed?

Posted by Anne Sheehan on Aug 29, 2018

During our recent webinar on CFO.com, Paying More than You Should in Commercial Property Taxes? A Guide to Better Risk Management, this question was asked: “How prevalent are overassessments of commercial property? What factors typically contribute to overassessments? 

Here are the key takeaways:

  • Including both commercial real estate and business personal property, we estimate that about 90% of commercial property is over-assessed. 
  • Contributing factors include:
    • Lack of awareness about property taxes and the risk of not managing them.
    • A perception that property taxes are a fixed cost, as opposed to a variable cost due to fair market value provisions in state and local laws.
    • A lack of property tax due diligence prior to acquisitions (of companies or properties), build-to-suit projects, and expansions of existing buildings, production lines, and significant machinery installations.
    • A lack of awareness about the fair values in the local market.

 For more detailed insights read the complete transcript below or watch the video.

How prevalent are overassessments of commercial property? What factors typically contribute to overassessments? 

Edited transcript: Webinar presentation and discussion with Anne Sheehan, CEO of Real Property Tax Advisors, Stu Hueber, VP of Tax for Dean Foods, and moderator Joe Fleisher, Editorial Director of CFO.com.

 Joe Fleisher, Editorial Director of CFO.com

We have a question from an attendee. Anne, in your opinion, what percentage of properties are typically over-assessed? What have you observed?

 Anne Sheehan, CEO, Real Property Tax Advisors:

Great question, I appreciate someone putting it forth. We’ve actually tracked this internally for years. If you consider both real estate and business personal property assets, you can find as much as 80-90 percent of assets are overvalued. It can be for any number of the reasons that we’ve talked about today, but it’s a number that commands attention. And, it really reiterates the need to get hold of this process and put some focus on to it.

 Joe Fleisher, Editorial Director of CFO.com

Thanks very much, Anne and Stu. We have received great questions from attendees, and we will follow up on remaining questions after this webcast. I’m Joe Fleischer, moderator of the webcast. On behalf of our distinguished guests [panelists] Anne Sheehan, CEO of Real Property Tax Advisors, as well as Stu Hueber, vice president of tax with Dean Foods Company, we very much appreciate you joining us for this webcast.

 

Watch the Webinar: Pay More than You Should in Commercial Property Taxes? A Guide to Better Risk Management 

Tags: Personal property, business personal property taxes, commercial property tax management

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