Now Is The Time Savvy Investors Talk To Their Tax Assessor

Invest the Time Now to Reap Dividends in the Future -

Are you overlooking an opportunity?  We all like to make the most of our time and put effort into the things that have a high return on our investment (and time definitely is a scarce resource).

Although it's probably too late to challenge the property tax assessment on your property for this tax year, it may be the perfect time to get things on track for next years assessment.  

Generally real property assessments in the United States have an effective date of December 31 or January first.  After property owners are notified of their assessments for the year, they have a set period of time to ask for a review of the assessment by the assessment office or to file a formal complaint to the appeals board.  

By now, many of the deadlines for these review and appeal opportunities for the current year have passed.  But, here's what I recommend that you concentrate on now:

-- Ask the assessor if any new tax legislation has been enacted for the type of property that you own.  The legislative process provides an opportunity for tax laws to be changed each year.  Many tax law changes have been introduced during the last several years due an increased call for property tax reform.

-- Inform the assessor of any unusual conditions about your property.  Residential properties can suffer from many specific conditions that cause the market value to be less than those of surrounding properties in a neighborhood, but try to have documentation and estimates to cure such conditions.

-- If you recently purchased your property and hope to use the sale price as evidence of market value, make sure of two things.  First, be sure that the sale occurred during the time frame that the assessment office studied for the upcoming assessment.  Secondly, be sure that the sale is considered an arm’s-length transaction.  The assessors’ office can generally provide you with an answer to both of these questions.

-- Talk to the assessor about construction cost estimates for new construction, an addition, remodeling, or the cost to cure specific conditions that the property may suffer from.  Many assessors ask for actual construction costs as long as they are typical.  If you or a relative did some of the work, don't expect the assessor to take that into consideration.  The assessor has to estimate the typical cost of construction.

-- Check the local assessor's website for important dates and deadlines that include: (a) the effective date for the valuation of your property for assessment purposes, and (b) deadlines for filing any required forms related to newly constructed homes, statements of income and expenses for income-producing properties, or the retention of abatements or tax exempt status.

For more useful advice concerning tax assessments sign up for our Commercial Real Estate newsletter that is sent by e-mail once a month.  By signing up you will receive our most recent subscriber-only publication and be able to download many of our previously released publications at no cost.

For a sample of our recent subscriber-only publication click here.  

Or to sign up now and receive our recent publication and be able to download others today click here. You can unsubscribe at any time.