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commercial real estate property tax protest

Commercial Real Estate Property Tax Protest Success Stories

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Dealing with commercial real estate property taxes can be complicated, especially when considering a property tax protest. 

A property tax protest is a formal challenge to a property’s assessed value as determined by local authorities. This step aims to reduce property tax liability.

According to commercial real estate news platform CoStar, “Property tax appeals are hitting local assessment officials as the chasm widens between what an office building is now worth based on its potential rental income versus the value determined by an assessor.” 

This disparity often prompts property owners to turn to specialized firms for help. But are property tax protest companies worth it?

Explore the effectiveness of Property Valuation Services (PVS) through five case studies, and learn more about property tax protest appeals and procedures.

Successful Property Tax Protest Examples

Property Tax Protest Case Study 1: Texas Hospital Valuation Appeal

Summary

In 2021, PVS represented a client owning multiple hospitals in a large jurisdiction in Texas.
The hospitals were initially assessed at a collective real property value of $314 million annually.

 
This overvaluation posed a significant financial burden on the healthcare provider, prompting a need for meticulous review and appeal.


PVS prepared an analysis of the taxable value, articulated a well-founded position for property tax reduction and explored all reasonable avenues to ensure a fair protest process.


Our strategic approach involved direct negotiations with local taxing authorities.

 

Result
The appeal efforts for the property tax years 2020 and 2021 were highly successful. PVS reduced the property’s values to $295 million and $285 million, respectively.

 
These adjustments resulted in more than $1.25 million in property tax savings, alleviating the hospital system’s financial strain.

Property Tax Protest Case Study 2: Missouri Big Box Store Valuation Appeal

Summary

We represented a Missouri property owner who faced an unreasonable valuation increase on a closed, vacant big-box store.

The local property tax assessor had significantly increased the assessed value of the dilapidated retail structure and surrounding pavement, basing their decision on the lot’s hypothetical, lucrative potential use.

This revaluation ignored the current state of the property.

PVS crafted a compelling appeal by highlighting the building’s current untenable condition — vacant, vandalized and structurally damaged — with no market demand to support the assessor’s inflated valuation.

Their argument focused on the reality of the property’s condition versus speculative potential.

 

Result

The appeal led to a 50% reduction in the property’s assessed value. This substantial decrease resulted in a property tax savings of $89,665 for the property owner, illustrating the impact of a well-supported argument in property tax appeals.

hospital property tax protest

Property Tax Protest Case Study 3: National Hospital Operator's Facility Revaluation

Summary

A national hospital operator faced significant property tax challenges when it constructed a new building and vacated most of the old hospital, which became functionally obsolete.

Despite the old hospital being largely vacated and no longer operational, local property tax assessors continued to assess the property at its previous value, not considering its diminished functionality and economic obsolescence.

PVS took a strategic approach by quantifying the functional obsolescence of the old facility to challenge the outdated assessment.

Through skilled negotiations and a deep understanding of property tax law, we argued for substantially reducing the property’s assessed value.

 

Results

The appeal resulted in a dramatic $23 million reduction in the assessed value for one property tax year, translating into $690,000 in property tax savings for the hospital operator. 

This significant decrease reflected the property’s actual status and corrected the overvaluation problem.

Property Tax Protest Case Study 4: Corporate Office Campus in Georgia

Summary

A national hospital operator faced significant property tax challenges when it constructed a new building and vacated most of the old hospital, which became functionally obsolete.

Despite the old hospital being largely vacated and no longer operational, local property tax assessors continued to assess the property at its previous value, not considering its diminished functionality and economic obsolescence.

PVS took a strategic approach by quantifying the functional obsolescence of the old facility to challenge the outdated assessment.

Through skilled negotiations and a deep understanding of property tax law, we argued for substantially reducing the property’s assessed value.

 

Results

The appeal resulted in a dramatic $23 million reduction in the assessed value for one property tax year, translating into $690,000 in property tax savings for the hospital operator. 

This significant decrease reflected the property’s actual status and corrected the overvaluation problem.

nursing home property tax protest

Property Tax Protest Case Study 5: Nursing Home in Phoenix, Arizona

Summary

PVS handled an appeal for a nursing home in Phoenix, Arizona, attached to a hospital.

After visiting the property and reviewing the county’s records, PVS realized that the building was classified incorrectly and its assessment was excessively well above market value.

We filed formal appeals to address these issues, corrected this classification error and reduced the fair market value. In addition, we reviewed valuations for the past years to correct these issues.

 

Results

The appeals resulted in a total property tax savings of $445,000, including interest and refund checks for $349,000, resulting from our correction of the prior year’s tax rolls.

Read more of our successful case studies here.

Hear from Our Clients: Property Tax Protest Company Reviews

When choosing the best property tax protest company, nothing speaks louder than the voices of satisfied clients.

Here are testimonials from various property owners who have benefited from our expert commercial property tax appeal services.

“Their [PVS] work on various high-profile cases has shown a high level of integrity while striving to maintain our company’s best interests.” —Senior Vice President, Corporate Taxation, CHSPSC, LLC

“Property Valuation Services has been working for our organization since 2011 performing all property tax compliance, appeal and audit functions. PVS has always performed their work in a trustworthy and professional manner with well-trained staff that communicate effectively, which allows me to focus on other areas of need within the tax department.” —Chief Financial Officer, Vibra Healthcare

“We have been a client with PVS since 2017. Since working with PVS, we have significantly reduced our time spent and the number of errors in collecting, accruing and paying our property tax bills…. In addition, we have had a very significant reduction in late fees assessed against us and saved thousands on property tax appeals that we might otherwise not have known how to navigate.” —Community Healthcare Trust Incorporated

Is it worth it to appeal property taxes?

Yes, appealing property taxes is often worth the effort. If you believe your property is overvalued or property tax rates have increased significantly, filing an appeal is a proactive step to ensure fairness and accuracy. Successful appeals can result in lower property tax bills, saving money in the long run.

As one report from Atlanta Civic Circle concluded, “A research team at Georgia Tech’s School of Public Policy, led by assistant professor Brian An, studied Fulton County tax records from 2011 to 2022 and found that commercial property owners appealed their properties’ assessed fair market value 31,587 times over that period and were successful 62% of the time. Consequently, they were able to lower their tax bill.”

partner with tax professionals

How to win a property tax appeal?

Here’s how our team of property tax experts identifies and challenges over assessments successfully:

Evaluate Property

We begin with an exhaustive evaluation, focusing on the market value of your property and factors that influence it, such as location, condition, size, age and potential income.

This detailed analysis helps us identify discrepancies between your property’s assessed value and prevailing market conditions, ensuring the validity of any unequal appraisal claims.

Collect and Review Evidence

A robust property tax appeal is rooted in the strength of the evidence presented. Our team compiles evidence and additional information, such as recent sales of similar properties, current market studies and other pertinent financial details.

Evidence should show that the current assigned property tax valuations surpass the actual market value of your property.

File an Appeal

Our team files a notice of protest form through the county appraisal district’s online portal or certified mail on your behalf.

We handle all the essential paperwork, submission and protest deadline details.

The deadline for filing a property tax appeal can vary depending on the jurisdiction and the local appraisal district’s regulations.

In Texas, however, the standard deadline is May 15, or 30 days after the property tax bill or assessment notice has been mailed, whichever is later.

Provide Expert Testimony and Valuation Reports

The appeal process may involve informal hearings or local appeal board hearings. PVS provides expert testimony and detailed valuation reports for clear, data-supported reasons for a reduced value of your property during negotiations and hearings.

Negotiate Strategically

With comprehensive knowledge of the property tax code and local appraisal district regulations, our property tax specialists negotiate with assessors and other authorities.

Our informed and professional approach often leads to favorable settlement offers before reaching a formal hearing.

Reduce Commercial Real Property Tax Hassle-free with PVS

Property Valuation Services provides comprehensive appeal and protest services for accuracy and fairness. We thoroughly examine your property valuations to uncover any inconsistencies or excessive assessments.


Our team of nearly 86 dedicated professionals is led by experienced property tax professionals and backed by a Member of the Appraisal Institute (MAI) and the American Society of Appraisers (ASA).


Contact us today to handle your property tax protest with precision and attention to detail. We’ve successfully managed appeals for our past clients and are ready to do the same for you.

Commercial Real Estate Property Tax Protest Success Stories Read More »

Texas property tax appeal

Timing, Taxes and Texas Property Tax Appeal Options

/ Blog, Business Personal Property

Business Personal Property Tax

Timing, Taxes and Texas Property Tax Appeal Options

Mastering property tax management is crucial for Texas business owners, as the process can lead to significant financial benefits. This guide focuses on business personal property (BPP), a key factor that can affect property tax liabilities.

We’ll provide a clear walkthrough of the essential steps for accurately assessing BPP and outline Texas property tax appeal options available if you are being overcharged.

By fully understanding these processes, you can potentially reduce your property tax expenses, freeing up more resources to reinvest in your business.

Understanding Texas Property Taxes

According to the Texas Taxpayers and Research Association, “Texas is a low tax state for individuals and a high tax state for most businesses.” It also noted, “Texas’ effective tax rate on businesses is 5.6% — well above the national average of 4.7%, and ranking us 11th highest among the states.”

These statistics highlight the burden that Texas property taxes can impose on businesses, emphasizing the necessity for diligent tax management.

Understanding the composition of these taxes, including commercial real estate and business personal property (BPP), is the first step toward ensuring you don’t overpay.

This blog focuses on business personal property. Get more information on commercial real estate property tax appeals here.

Knowing how your properties are assessed can help you determine if you face higher tax burdens and subsequently take informed steps to mitigate these costs.

What is business personal property (BPP)?

Business personal property includes assets within a location that are tangible and movable, such as office equipment, manufacturing machinery and software. These assets can depreciate rapidly, and their market value can be challenging to estimate, making accurate tax assessment a primary concern for businesses aiming to minimize their tax liabilities.

For federal purposes, the following items are depreciated as follows:

  • Three-year properties: tractors, tools and some livestock.
  • Five-year properties: computers, office equipment, cars, light trucks and construction assets.
  • Seven-year properties: office furniture, appliances and most other properties, which are not otherwise categorized.

Local assessors will use their own depreciation schedules or schedules mandated by their state property tax department.

Common reasons why your BPP tax could increase:

  1. If a company buys a lot of equipment during the previous year.
  2. If, during an audit, a piece of equipment is discovered or erroneously not reported on your submitted annual business listing.
  3. When an auditor moves assets to a longer-lived, slower-depreciating table.
business personal property

Texas Property Tax Appeal Proceedings and Outcomes

If you believe there is enough reason to dispute the assessed value of your property, consider filing an appeal.

Here’s a detailed breakdown of how to protest property tax in Texas, divided into clear sections to help you manage each phase effectively.

Initial Filing of the Protest

To begin your property tax protest, submit a notice of protest form to your local county appraisal district. 

According to the Texas Comptroller, this document is essential and typically due on May 15, or 30 days after you receive the notice of appraised value, whichever is later.

Ensure you meet the deadline so you have the right to challenge the assessment.

Informal Negotiation

The next step in the appeal process is an informal hearing with a staff appraiser at the appraisal district office. This meeting is a less formal opportunity to argue your case.

You can present documents with additional information like depreciation studies, estimated life guidelines and comparable sales or listings. The goal is to prove that the appraised value of your property has been set too high.

Formal Hearing

If the informal negotiation does not adjust the valuation to your satisfaction, the next step is a formal appraisal review board hearing.

Prepare for the county appraisal review board (ARB) hearing — it’s more structured and formal, where the board members will review your case and decide.

Consider hiring Property Valuation Services to bolster your chances of winning your Texas property tax appeal.

Judicial Appeal

Should the ARB’s decision still not be in your favor, you have 60 days from the decision date to appeal to the state district court.

The Texas property tax code governs this part of the property tax appeal process and typically involves more complex legal procedures. 

Send your appeal documents via certified mail to ensure proof of delivery and compliance with legal standards.

Texas second chance appeal option

The "Second Chance" 25.25 Appeal

If you believe there is enough reason to dispute the assessed value of your property, consider filing an appeal.

Here’s a detailed breakdown of how to protest property tax in Texas, divided into clear sections to help you manage each phase effectively.

Initial Filing of the Protest

To begin your property tax protest, submit a notice of protest form to your local county appraisal district. 

According to the Texas Comptroller, this document is essential and typically due on May 15, or 30 days after you receive the notice of appraised value, whichever is later.

Ensure you meet the deadline so you have the right to challenge the assessment.

Informal Negotiation

The next step in the appeal process is an informal hearing with a staff appraiser at the appraisal district office. This meeting is a less formal opportunity to argue your case.

You can present documents with additional information like depreciation studies, estimated life guidelines and comparable sales or listings. The goal is to prove that the appraised value of your property has been set too high.

Formal Hearing

If the informal negotiation does not adjust the valuation to your satisfaction, the next step is a formal appraisal review board hearing.

Prepare for the county appraisal review board (ARB) hearing — it’s more structured and formal, where the board members will review your case and decide.

Consider hiring Property Valuation Services to bolster your chances of winning your Texas property tax appeal.

Judicial Appeal

Should the ARB’s decision still not be in your favor, you have 60 days from the decision date to appeal to the state district court.

The Texas property tax code governs this part of the property tax appeal process and typically involves more complex legal procedures. 

Send your appeal documents via certified mail to ensure proof of delivery and compliance with legal standards.

Hospital case study

Case Study: Dallas Hospital

In our work with Dallas Hospital, we tackled the challenge of accurately assessing and appealing their business personal property taxes. 

Here’s a detailed look at how we approached this situation and the successful outcomes we achieved for our client:

Summary

The hospital’s asset listings included high-technology medical equipment incorrectly classified, affecting the depreciation schedules and taxable values. 

PVS meticulously reviewed and reclassifed these assets, distinguishing between tangible and intangible components.

By preparing a detailed personal property rendition, PVS identified specific components as intangible or non-taxable, which favorably altered the depreciation schedule and reduced the taxable base.

Results

This strategic reclassification and negotiation with the tax authorities resulted in more than $244,000 in property tax savings for the hospital, underscoring the effectiveness of PVS’s specialized approach to property tax appeals.

If you suspect your business’s BPP might be overvalued or need guidance on any aspect of Texas property tax appeals, don’t hesitate to contact PVS. 

Our team is ready to analyze your situation and potentially save you significant taxes.

Property Valuation Services for Hassle-free Texas Property Tax Appeal

PVS has extensive experience navigating the intricacies of property tax litigation, particularly with BPP in Texas. 

Through strategic assessments and negotiations, PVS has secured significant tax reductions for our clients.

Understanding and actively managing BPP’s appraisal and appeal processes can lead to substantial savings and a more accurate reflection of your property’s value. 

Texas business owners should engage proactively with property tax professionals to ensure unjust tax assessments do not overburden them.

If you’re facing uncertainties about your BPP assessments or wish to discuss potential Texas property tax appeals, we’re happy to help you.

Contact PVS today for a personalized consultation to explore your property tax reduction strategies.

Picture of Chip Saam

Chip Saam

Chip Saam, ASA, CMI, spearheads Property Valuation Services (PVS) as Senior Technical Director. With over 25 years of hands-on expertise, Chip specializes in pioneering valuation approaches aimed at maximizing property tax efficiencies and savings for businesses navigating complex property tax landscapes.
Texas property tax appeal

Texas business owners should engage proactively with property tax professionals to ensure unjust tax assessments do not overburden them.

Recent Posts

Timing, Taxes and Texas Property Tax Appeal Options Read More »

Business Personal property Tax Appeal

Understanding Business Personal Property Tax Protests: When and How to Challenge Your Assessment

/ Blog, Business Personal Property

Business Personal Property Tax Protests

Understanding Business Personal Property Tax Protests: When and How to Challenge Your Assessment

A business personal property tax appeal (BPPTA) is a formal process by which business owners challenge business personal property’s assessed value for tax purposes. Local government entities determine the value of business personal property within their jurisdiction and calculate taxes accordingly. However, there may be instances where business personal property owners believe that the assessed value is inaccurate or unfairly high, leading them to file a formal appeal. If you have questions about what a BPPTA entails, when it is appropriate to file, the steps for filing a protest and how to navigate this process to secure property tax relief, this blog has the answers you need.

What is a business personal property tax appeal?

BPPTA is a formal procedure through which business owners can dispute the assessed value of their tangible assets for taxation purposes. Business personal property refers to the movable assets used in conducting business, such as furniture, equipment, machinery and inventory — distinct from real property or real estate. Challenging the assessed value of these assets is crucial to ensure a fair and accurate tax assessment.

Suppose you own a small manufacturing business, and your county assessor determines that the value of your machinery and equipment for tax purposes equals $1,000,000. However, after researching and consulting with industry experts, you believe your assets’ fair market value is closer to $500,000. This discrepancy could significantly impact your tax bill. By initiating a BPPTA, you can seek a reassessment that more accurately reflects the true value of your assets, potentially lowering your overall property tax payments.

While many states assess business personal property tax, New York and Ohio are some of the exceptions, so a protest would not occur in these states. You can check this list from Legal Zoom for the states that exempt businesses from this property tax.

By presenting evidence such as recent appraisals, sales data for comparable machinery and equipment with any relevant documentation highlighting the condition or depreciation of your assets, you can build a strong case to support your protest. The goal is to demonstrate that the assessed value is inaccurately high and does not align with the fair market value of your business personal property.

For real-life inspiration, watch this video to learn how a hospital in Texas saved $34K in business personal property tax dollars after filing an appeal.

When should you consider a property tax protest?

Timing is crucial. You typically have 10 to 30 days from the date of the valuation notice to challenge the assessment through a personal property petition. This process is not applicable in states like New York and Ohio, where local business taxes on personal property are not assessed. You should check local regulations and possibly consult the county board of equalization for specific guidelines applicable to your locale.

Determining whether a BPPTP is appropriate for your situation requires careful evaluation, and several scenarios indicate when it might be time to consider filing a protest:

Overvaluation

If you believe the assessor has overvalued your business personal property, resulting in an inflated assessment and higher property taxes than warranted, a BPPTP may be necessary. Like the example above, if the assessor values your machinery and equipment at $200,000, but recent sales data or industry standards suggest a value closer to $150,000, you can file a protest to seek a more accurate assessment.

Market Value Changes

Business personal property, such as equipment and machinery, can experience depreciation over time due to technological advancements, wear and tear or changes in market demand. If your assessment does not consider these factors and reflects an outdated or inflated value, a protest can help adjust it accordingly.

Suppose technological advancements have rendered your equipment less valuable compared to newer models. In that case, you can present evidence of market conditions, expert opinions or depreciation schedules to support your protest. Demonstrating the depreciation of your business personal property can be a compelling argument for a reassessment that accurately reflects its current market value.

Read this case study to learn how a leasing company saved $220K in property tax dollars.

Incorrect Property Information

Errors in the assessor’s records, such as inaccurate descriptions or missing assets, can lead to an incorrect assessment of your business’s personal property. A BPPTP can rectify such errors and ensure a fair evaluation. For example, if the assessor mistakenly includes assets you no longer possess, this can lead to an artificially higher value. In that case, you can provide documentation and accurate asset listings to support your protest.

property tax protest - Property Valuation ServicesWhat are the steps in filing a business personal property tax protest?

While some states like Texas publish a business protest guide for small businesses detailing the steps needed to file an appeal, procedures may vary in other states. By following the specific guidelines of your local government, you can ensure that you’re challenging your assessment correctly and effectively.

Filing a protest generally involves several crucial steps to challenge your assessment effectively. By following these steps carefully and correctly, you can increase your chances of success:

1. Review Assessment Notice

Carefully review the assessment notice sent by the county assessor. Note the assessed value, the deadline for filing a petition and any other pertinent details such as the tax rate and any exemption determinations.

2. Gather Supporting Evidence

When preparing for a business personal property tax protest, gathering specific supporting evidence for both intangible and tangible personal property is crucial. Here are examples of the types of evidence you should consider collecting:

Tangible Business Personal Property

Tangible business personal property is the physical property that can be seen and touched. It includes items such as machinery, equipment, furniture and vehicles.

  • Recent Appraisals: Hire a licensed professional to independently appraise your tangible business personal properties. The appraiser will assess factors like their condition, age and market value. Seek the expertise of professionals who have successfully handled cases and can provide their opinions or written statements regarding the accuracy of your property assessment. They can analyze the specifics of your property, review the assessment and provide their expert opinion on whether it is accurate or unjustifiably high. Their opinions can carry weight during the protest process, so choosing those with a proven track record is critical.
  • Comparable Sales Data: Research recent sales of similar tangible assets in your industry or region. For example, if you own a restaurant and are protesting the assessed value of your commercial kitchen equipment, find comparable sales of similar equipment in your area. This evidence will demonstrate if your assets have been assessed higher than comparable assets, strengthening your case during the protest.
  • Photographs: To support your protest, take clear and detailed photographs of your tangible assets. For instance, if you have outdated machinery that needs repairs, capture those aspects in photographs. These visual representations can reinforce your argument and provide tangible evidence during the protest process.

Intangible Assets

Intangible Assets

Intangible assets are non-physical assets that hold value but do not have a physical form. They include intellectual property, software, brand recognition and customer lists.

  • Expert Opinions: Seek the expertise of professionals specializing in evaluating intangible assets. For example, consult an intellectual property attorney or an experienced appraiser if you have intellectual property. Their opinions can carry significant weight during the protest process.
  • Financial Documentation: Gather relevant financial documents that demonstrate the value of your intangible assets. For instance, if you are protesting the assessed value of your brand or customer list, provide financial statements highlighting the income generated by these assets or any licensing or royalty agreements showcasing their value.
  • Market Research: Conduct market research to gather data on similar intangible assets in your industry. For example, if you own a software company and are disputing the assessed value of your software code, collect information on comparable software products, their sales and any relevant market trends. This market research can provide valuable evidence to support your case during the protest.

Consider your local property tax authority’s guidelines, as evidence requirements may vary depending on your jurisdiction. Gathering the appropriate evidence and following the correct procedures will help you build a strong case for your business personal property tax appeal.

3. Complete Protest Forms

Obtain the necessary protest forms from your local property tax assessor’s office or website. Complete the forms accurately, providing all required information and supporting documentation.

4. Submit Protest

Submit your completed protest forms and supporting documentation to the appropriate authority, often the county board of equalization, within the specified deadline. Adhere to the submission guidelines provided by your local property tax assessor’s office to ensure your protest is appropriately filed.

5. Attend a Hearing (if applicable)

A formal hearing may be scheduled to review your business personal property tax appeal. If you receive a hearing notice, prepare your arguments, organize your evidence and articulate why you believe your property tax should be adjusted.

How can Property Valuation Services help with your business personal property tax appeal?

At Property Valuation Services, we understand the complexities involved in the business personal property tax appeal process, and we’re here to assist you every step of the way. Our expertise in property valuation can strengthen your case and increase the likelihood of a successful business personal property tax appeal. Here’s how we can help you:

Independent Property Valuation

Our team of experts will conduct an independent evaluation of your business’s personal property value. Using our in-depth knowledge of local markets and industry-standard valuation techniques, we’ll provide you with an unbiased assessment that serves as evidence to support your claim.

Detailed Property Reports

We will provide comprehensive reports that delve into the factors influencing your property’s value. Our detailed analysis includes information on comparable sales, market trends, property conditions and other relevant factors. These reports will significantly strengthen your case during the property tax protest, providing a clear and thorough understanding of your property’s value.

Expert Testimony

If needed, our team can provide expert testimony during the protest hearings. Drawing on our extensive experience and expertise in property valuation, we will confidently present your arguments, explain complex valuation concepts and highlight discrepancies in the assessment. Our expert testimony will provide an independent and authoritative perspective that supports your claim for a lower assessed value.

Guidance and Representation

We understand the legal complexities and will ensure you are well-informed. Our team at PVS can handle all aspects of the appeal process, from gathering necessary evidence and preparing documentation to navigating any challenges. With our strong representation, you can be confident that we’ll advocate in your best interest.

Market Knowledge and Insights

Our team stays up-to-date with local market trends and changes in regulations. We have a deep understanding of how these factors can impact property values and can provide you with valuable advice and strategies to pursue during the business personal property tax protest process.

Contact Property Valuation Services (PVS) for a fair and accurate assessment of your business’s and personal property’s value. Our expertise will strengthen the case and alleviate the burden of excessive property taxes. With our guidance, we can confidently navigate the tax protest process for a successful outcome.

Picture of Chip Saam

Chip Saam

Chip Saam, ASA, CMI, spearheads Property Valuation Services (PVS) as Senior Technical Director. With over 25 years of hands-on expertise, Chip specializes in pioneering valuation approaches aimed at maximizing property tax efficiencies and savings for businesses navigating complex property tax landscapes.
Business Personal property Tax Appeal

BPPTA is a formal procedure through which business owners can dispute the assessed value of their tangible assets for taxation purposes. Business personal property refers to the movable assets used in conducting business, such as furniture, equipment, machinery and inventory — distinct from real property or real estate. Challenging the assessed value of these assets is crucial to ensure a fair and accurate tax assessment.

Recent Posts

Understanding Business Personal Property Tax Protests: When and How to Challenge Your Assessment Read More »

commercial property tax appeal

Comprehensive Guide To Commercial Real Estate Property Tax Appeal

/ Blog, Commercial Property Tax

Commercial real estate property taxes typically represent a business’ most significant operating expense aside from debt. Proactively managing property taxes through review and appeal is a vital strategy that can dramatically enhance your profitability and reduce operational costs. By partnering with experts in strategic commercial real estate property tax appeals and valuation services, you can safeguard your financial health, free up capital for reinvestment and secure a competitive edge in your market.

 

Discover the transformative impact effective property tax management can have on your business operations and bottom line.

 

What are the current challenges in commercial real estate?

According to reporting by CoStar News, “Office owners across the country, coping with more vacancies and lower demand that reduce building values, now face another issue: higher property tax bills.”

 

Amid fluctuating market conditions, property taxes remain a significant burden. As market demand shifts and vacancies increase, property valuations and property tax liability changes are expected. However, the timing of property reassessments, which often lag behind current market conditions, or the application of fixed property tax rate increases, can result in property owners facing tax bills that don’t accurately reflect their property’s diminished market value. This discrepancy can create a financial strain for property owners, who must manage taxes that are misaligned with the real economic value of their properties.

 

Given these challenges, it’s imperative to understand how properties are assessed. A deep dive into the assessment process not only clarifies why you might be facing high property taxes but also equips you with the crucial knowledge needed to contest them effectively.

 

Understanding the Assessment Process for Commercial Real Estate Property

Assessing commercial real estate property is crucial in determining your property tax liabilities. Here are the factors used by local authorities to establish the taxable value of a property:

 

  1. Location: The geographical area where the property is situated influences its value. Properties in high-demand or economically thriving locations are generally assessed at higher values.
  2. Size: The property’s overall square footage directly affects its valuation. Larger properties typically incur higher property tax assessments due to their potential for generating more revenue.
  3. Age: Age can affect the assessed value of your property, with newer properties often valued higher due to greater demand by tenants fewer anticipated maintenance issues than older properties.
  4. Condition: The current state of the property is crucial; well-maintained or recently renovated properties are likely to be assessed at a higher value.
  5. Income Potential: The property’s ability to generate income through renting or leasing spaces is a critical determinant of its assessed value. Higher income-generating properties are usually subject to higher property taxes.

These factors play a pivotal role in determining a property’s market value. This value is determined based on current market conditions and the prices of similar properties in the area, reflecting what the property would likely sell for under normal circumstances.

 

How does Property Valuation Services (PVS) help in accurate assessment? 

Our team of nearly 100 dedicated professionals, led by an experienced property tax professional holding the esteemed Member of the Appraisal Institute (MAI) designation, assists in:

 

  • Expert Valuation Analysis: PVS experts specialize in commercial real estate valuation services and understand the intricacies of commercial property valuations. We use advanced tools and methodologies to analyze the factors affecting the value of your property.
  • Market Comparisons: To ensure fairness, we conduct thorough market studies comparing properties in the same region. This helps in arguing for a more equitable assessment by showing real-world examples. 

 

  • Appeal Support: This involves preparing detailed reports and presentations highlighting discrepancies in the assessment process. We have a proven track record of successfully producing reductions, serving more than 800  clients annually with nearly 40,000 property tax parcels across all 50 states.

 

  • Continuous Monitoring: PVS monitors market changes and appeals assessments accordingly. This proactive approach ensures that your property’s assessed value remains aligned with its actual market value, preventing over-taxation.

By partnering with PVS, commercial property owners can have confidence that their property taxes are fair and optimized to reflect the actual value of their investment, potentially saving significant property tax dollars annually. 

 

Commercial Real Estate Property Tax Appeal

Successfully challenging an overassessment can dramatically reduce one of your most significant operating expenses. Overassessments occur when an assessor’s appraised value exceeds its actual market value, often leading to unnecessarily high property tax bills. Proactively addressing these discrepancies is where PVS excels.

 

According to Atlanta Civic Circle, “A research team at Georgia Tech’s School of Public Policy, led by assistant professor Brian An, studied Fulton County tax records from 2011 to 2022 and found that commercial property owners appealed their properties’ assessed fair market value 31,587 times over that period and were successful 62% of the time. Consequently, they were able to lower their tax bill.”

 

This significant success rate underscores the effectiveness of well-prepared appeals and highlights the potential for substantial property tax savings.

commercial property tax firm

How does PVS identify and challenge overassessments?

PVS’s role as a commercial property tax specialist involves several key actions that help challenge and correct overassessed property values:

 

Detailed Property Analysis

We begin by conducting a comprehensive analysis of your property, considering all factors that impact its market value, such as location, condition, size, age and income potential. This thorough understanding helps identify discrepancies between the property’s assessed value and the current market conditions.

 

Gathering Robust Evidence

Solid evidence is crucial for a successful commercial real estate property tax appeal. We gather data, including recent sales of comparable properties, current market reports and other relevant financial information, to build a compelling case that the assessed value exceeds the fair market value.

 

Expert Testimony and Reports

PVS provides expert testimonies and detailed valuation reports during the appeal process. These reports are crucial in negotiations and hearings, offering clear, data-backed insights into why the assessment should be reduced.

 

Strategic Negotiations

With a deep understanding of property tax laws and local regulations, our team engages in strategic negotiations with property tax assessors and other relevant authorities. Our expertise and professional approach often facilitate favorable outcomes in reducing assessed values.

commercial real estate property tax

Case Studies of Successful Commercial Real Estate Property Tax Appeal

Partnering with PVS meant significant property tax savings for these clients:

  • Corporate Office Campus in Fulton County, GA: PVS challenged the assessment of an expansive corporate office campus that had been significantly overvalued. By providing a detailed market analysis and comparing it with similar properties, PVS reduced the assessment by $25 million, resulting in property tax savings of approximately $204,918.

 

  • Big Box Store in Missouri: In another instance, PVS represented a property owner who faced an excessive valuation increase on a closed and vacant big box store. PVS’s appeal process resulted in a 50% reduction in the assessed value, saving the property owner $89,665 in property tax dollars.

 

  • National Hospital Operator: PVS successfully secured a $690,000 commercial real estate property tax savings for a national hospital operator by addressing the overvaluation of a vacated, functionally obsolete hospital facility. Despite local assessors initially maintaining the total value of the old facility, even after its cessation as an acute care center, PVS managed to revalue the property by quantifying its functional obsolescence. 

Compliance and Deadlines in Commercial Property Tax Management

Knowing property tax regulations is critical for commercial real estate owners to avoid penalties and potential legal consequences. Understanding and adhering to property tax deadlines is crucial in this process. We ensure our clients comply with all property tax obligations.

 

Importance of Compliance

Failure to comply with property tax deadlines and regulations can lead to severe repercussions for property owners, including hefty penalties, interest on overdue amounts and even legal actions. In some cases, non-compliance can also jeopardize the possibility of successfully appealing unfair property tax assessments. Thus, maintaining compliance is not merely about following rules — it is about protecting your investment and ensuring its profitability.

 

How PVS Provides Hassle-free Compliance

PVS offers several vital services to ensure that clients can meet their property tax obligations effectively and without hassle:

 

 

  1. Deadline Tracking: Our team keeps a detailed calendar of all relevant property tax deadlines across different jurisdictions. This proactive approach ensures that no deadline is missed.
  2. Documentation and Filing Assistance: We assist in preparing and filing all necessary documentation required for property tax payments and appeals. This service is crucial, as proper documentation is often extensive and must be meticulously prepared to ensure compliance.
  3. Property Tax Planning and Forecasting: Beyond mere compliance, PVS helps plan for future property tax liabilities. This includes providing property tax accrual forecasting, which allows you to budget for property tax expenses effectively and avoid financial surprises at the end of the property tax period.
  4. Regular Updates and Consultations: We regularly review and keep up-to-date with legislative changes and are available to discuss the changes, when necessary, with our clients. 
  5. Representation in Disputes: If there are discrepancies or disputes with local property tax authorities, PVS represents and supports our clients throughout the resolution process. This representation can be critical in ensuring that rights are protected and our clients comply with legal requirements.

commercial real estate property tax appeal

Ensuring Long-Term Compliance

PVS’s role extends beyond just meeting immediate deadlines. Our comprehensive approach to commercial property tax management ensures that clients are well-prepared for long-term compliance, safeguarding against risks and optimizing the financial health of their real estate investments.

 

By partnering with us, you can rest assured that your property tax compliance is in capable hands, allowing you to focus more on properties’ strategic management and growth.

Let PVS handle your commercial real estate property tax appeal.

Challenging overassessments is a strategic move that all commercial property owners should consider, especially when discrepancies in valuation are evident. With PVS’s expertise in commercial property tax appeals, property owners can ensure they are not overpaying property taxes and can optimize the financial performance of real estate investments. This proactive approach not only guards against financial inefficiencies but also enhances your property portfolio’s overall value and profitability.

 

Don’t let overvaluations of your commercial properties burden your business with excessive taxes. Contact PVS today to discover how we can help you achieve significant savings and ensure fair assessments. Maximize the potential of your commercial real estate investments with PVS as your trusted property tax specialist.

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