The Nuts & Bolts Of Commercial Property Tax Appeals

Posted by Anne Sheehan on Apr 28, 2015

The Nuts & Bolts Of Commercial Property Tax Appeals Should you file a commercial property tax appeal?

If you’re paying more than your fair share of property taxes, then answer is undoubtedly yes. But how do you establish whether you’re overpaying your commercial property taxes? 

Start by determining whether your property has been assessed at fair market value of the fee simple interest.

This means establishing whether the local tax assessors have assessed your property as if it were for sale or lease on the lien date (usually January 1).

Fair market value of the fee simple interest is calculated based on the sale/lease of similar buildings in the jurisdiction over the last 12 to 24 months.

The local tax assessor is supposed to determine whether your building is worth the value paid to buy or rent the building on January 1. The assessor should use this figure to establish the fair market value of the price per square foot and rental rate per square foot. 

Calculating fair market value of the fee simple interest takes a lot of legwork and research. The taxing jurisdiction should do this every time your property tax value is assessed, but that doesn’t always happen. 

Unfortunately for property owners, determining whether a property is properly assessed requires more than making a phone call. You’ll need to gather data for many variables and do the math on your own to know whether the current price/rental rate of a building is at fair market value.

If your property is not assessed at fair market value, you’re in a position to file a commercial property tax appeal.

How To File A Commercial Property Tax Appeal

Before you prepare to file an appeal, be sure to understand the weaknesses in the jurisdiction’s assessment and how you’re going to attack it. Don’t file an appeal if you’re not confident that you’ll win.

Filing an appeal requires accuracy and strict adherence to tight deadlines. Begin by getting the critical due dates for each property and jurisdiction onto your calendar. 

Next, you’ll have to collect more information from the jurisdictions where you’re appealing. Start by finding answers to these questions:

  • When are assessment notices available for each property that you own?
  • When is the appeal deadline for each property that you own? 
  • When is the deadline for the appeals?
  • Does an attorney have to file the appeal for you?
  • What is the required format of the appeal?
  • What must be attached to the appeal for the jurisdiction to accept it?

Once you’ve filed an appeal, ensure you have proof of receipt so you know the jurisdiction received your documents on time. This is a critical component in the process because jurisdictions will reject your appeal if it’s even one second late. You must be able to prove your documents were filed on time as there is no forgiveness in property tax appeals.

Also, make sure you know whether the jurisdiction requires an appeal to be postmarked by a certain date, or whether they must receive the appeal by a set date.

Filing your commercial property tax appeal is just the beginning. Stay tuned for our upcoming blog post that highlights the next steps you should take after filing your property tax appeal.

Want to learn more about reducing your commercial property taxes? Download RPTA’s free e-book, The Corporate Taxpayer’s Guide To Reducing Commercial Property Taxes.

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