How To Appeal Commercial Property Taxes And Save Money

Posted by Anne Sheehan on May 19, 2015

How To Appeal Commercial Property Taxes And Save Money

Did you know that most commercial property portfolios are overtaxed by about 30 percent?

Here’s something else you may not know: It’s high season for commercial property tax appeals. Commercial property taxes are the largest cost of corporate occupancy; a successful commercial property tax appeal could generate significant tax savings and reduce your overall operating expenses.

Unfortunately, businesses often don’t know how to appeal commercial property taxes, or that doing so is even an option.

Many local taxing jurisdictions have spring/early summer deadlines for commercial property tax appeals. If you haven’t already started, now is the time to research, collect data and compile the necessary materials to wage a successful commercial property tax appeal.

How To Appeal Commercial Property Taxes: Where To Start

The first step involves a bit of administrative work; you must make sure you’re aware of all deadlines, forms and evidence required to file a property tax appeal in the jurisdiction where you own assets.

Consider these questions:

1) Do you know the exact due date for the appeal?

  • Find the date and mark it on your calendar. Make sure to note the time of day the appeal must be filed by.

  • Confirm with the county whether the appeal must be received by the appeal date or postmarked by the appeal date.

2) Do you know where and how to mail your appeal?

  • Confirm the mailing address; don’t risk having the appeal ignored because it wasn’t received. This happens more often than you may think!

  • In addition, confirm with the county whether you can appeal online, complete a county appeal form with a SKU for your property, or write an appeal letter on company letterhead.

  • You should also determine the exact documentation required to wage a valid appeal in your jurisdiction; this could be evidence, letters of authorization and any other required paperwork.

Do you have questions about any of this? We can help.

Step Two: Doing The Legwork

Once your fundamentals are in order, you’re ready to start researching and building a case for your commercial property tax appeal with market data and analysis.

Consider these questions:

1) Is your property being taxed at fair market value? If not, you are going to pay more than your fair share of taxes. In this case, you’re almost certainly in a position to appeal, provided that you can make a good argument to the local taxing authority.

2) Do you have enough data to determine you’re being overtaxed? Reducing a commercial property value is founded upon solid research and market analysis. You need to know what other buildings in your area have sold for and then focus on properties similar to yours. Once you’ve collected your data (and verified its accuracy), you can use it to establish fair market value for your building. If your assessment is higher than the sale of similar buildings in the market, your analysis will serve as strong evidence in your favor when filing a commercial property tax appeal.

A comparable sales analysis isn’t the only method for determining if you’re being overtaxed. Other approaches include a comprehensive income capitalization analysis to determine the appropriate capitalization rate, as well as a cost approach that identifies functional and economic obsolescence and the associated impact on tax value. 

Need help or guidance? Set up a free, informative consultation.

Step Three: Finding The Time

If the processes above sound like they take a lot of time and effort, you’re right — they do. Fortunately, you can still reduce your commercial property tax assessments without doing all of the heavy lifting.

Real Property Tax Advisors (RPTA) has achieved a 30 percent average reduction in commercial property tax payments for 90 percent of its clients. RPTA’s low-cost property tax management and consultation services regularly provide a substantial return on investment for our clients.

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