Property tax is an essential part of our lives, but sometimes, it can be a considerable burden. It is a tax imposed on real estate property by the government, which can be a significant financial burden on property owners. It is even more for commercial property owners because CRE taxes are complex and manyfold.
Property taxes are one of the biggest money generators for most governments across the world. During the pandemic, many states and countries stopped their tax assessments and offered many tax rebates. But after the pandemic got over, all the government offices were loaded with tax assessment work. Many experts believe that this can easily lead to wrongful assessments.
If you are a commercial property owner, then you surely have more than one property under your portfolio. If they are wrongly assessed, it can become a huge blow to your profits at the end of the year. According to National Taxpayers Union findings, more than 60% of properties are over-assessed for tax purposes. But shocking reports also claim that only around 5% of property owners contest these assessments. The complicated logistics of the matter make most people shy away from the process.
However, there are ways to reduce property tax assessments, which can be very beneficial for real estate business owners and landlords. In this article, we will discuss some of the most effective ways to reduce property tax assessment.
Top 8 tips to systematically lower property tax assessments
Here are the top 8 tips that we have highlighted to help you lower your property tax assessments and get the best tax benefits. Make the taxes softer on your pocket and improve your business ROI.
Understand the tax bill inside out
Before taking any action to reduce your property tax assessment, you need to understand how the assessment works. Property taxes are calculated based on the value of your property, which the local government or property tax assessor determines. If you file an appeal without understanding the bill properly you will not be able to make a solid argument in court.
Figure out which factors are the most important in property taxes. The value of your property is determined by factors such as location, size, condition, and age. Once you understand your assessment, you can start taking steps to reduce it.
Get your property tax card from the local office
You can get a copy of your property tax assessment from your local tax assessor's office. But most property owners do not realise this fact and pay more in taxes. If you think you were wrongly charged, you can head to the assessor’s office and ask for a property tax card. The office is legally bound to provide you with a report.
For instance, the property tax assessor might overvalue your property or include structures that do not exist. If you notice any errors in your property tax assessment, you should contact the local tax assessor's office and request a correction.
This card or report will give you a detailed picture of how your property was assessed. The size of the property, the size of each individual unit, the type of assets, recent developments on the property, and more. If any of these things are missing from the assessor’s report, you can immediately gather evidence to file an appeal.
Do not make structural changes
Reports say that structural changes to your property are one of the biggest reasons behind increased property taxes. If your property has gone through any major structural change, like adding units, floors, or a new roof, and such developments impact the tax bills.
Also, always try to keep the curb appeal in mind and keep it limited. When assessors visit your property, always try to have a normal curb appeal. There is a high chance that the more expensive the property looks from the outside, the more tax bills you will get.
It is standard practice to always have similar property tax bills for similar properties in the same area. So, in case you were wrongly charged for your taxes, talk to your neighbours. Talk to anyone who has similar commercial properties in the area. See the tax bills they have received. You will get a complete picture of how unfair your taxes are.
Look for tax exemptions you qualify for
Another way to reduce your property tax assessment is by claiming all available exemptions. Property tax exemptions are deductions that reduce your property tax bill. There are several exemptions that you may be eligible for, such as a change of ownership, major damages, natural disaster effects, pandemic effects, and more. To claim these exemptions, you will need to file an application with your local tax assessor's office.
Hire a property tax appeal service provider
Appealing your property taxes can be a very taxing job due to the complicated paperwork, hearings, appeal, document collection, evidence gathering, and more. It is always best to hire professional property tax appeal experts who specialise in these tasks. They can do all the steps on your behalf and reduce your taxes much more efficiently.
Get a third-party property assessment
Government property tax assessors have to assess millions of homes and commercial properties every year to get their reports ready on time. This is an overbearing task in itself. This can many times lead to chaotic and faulty processes. That is why it is always best to opt for a third-party property assessment service provider. They will give a neutral assessment of the property from the inside out and help you pay the taxes that are fair.
Appeal your tax bills and ask for a reassessment
If you believe your property tax assessment is incorrect, you have the right to file an appeal. You can file an appeal with your local tax assessor's office. You must provide evidence to support your claim that your property has been overvalued. You may need to hire a professional appraiser to determine the actual value of your property.
Handling property tax appeals with Assetsoft
In conclusion, reducing commercial property tax assessment can be a complex process, but it is worth the effort. Remember that property taxes are an essential part of your community, but you don't have to pay more than what is fair.
To get the best expert commercial property tax assessment and appeal services, call us. And the best part? You will only pay us if we successfully reduce your assessments. Talk soon!