Ask me anything about Property Taxes

Ask me anything about Property Taxes

Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes

Hey Guys, 

I am new to BP and am looking to get into investing at some point, but today I would like to help answer any questions y'all might have relating to property taxes in Atlanta, but also not limited to GA, FL, NC, SC, TX, VA. Property taxes are typically a property owners biggest expense and can also make or break a deal early on in the bidding process. If you are unsure of what the property taxes will look like post acquisition (year 1) and you are about to put in an LOI, make sure you run it by a property tax expert first, or you can just ask me since that is my area of expertise. GA typically get reassessed the year after sale which will result in the property taxes going up significantly. Of course, there are effective appeal strategies In Georgia that can help with mitigating the tax liability increase due to a sale which would increase cash flow as a result. That being said, if you are looking at a deal in the southeast and are unsure of what the property taxes will look like year 1 and have questions, please feel free to reach out to me and I will do my best to respond and answer your questions in a timely manner. You can also ask me general questions about tax assessment processes in other states and appeal cycles since no state is one in the same. I am here to add value and want to network so fire away.

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Investor · Jacksonville, FL · Member since 2019 · 97 posts · 50 votes
4y

Hey Brad,

Thank you so much for your willingness to help.

Can you shed some light on the tax adjustment process in SC? I'm bidding on an interesting deal in Greenwood county.

Thank you!

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  • Investor · New York & TN · Member since 2019 · 325 posts · 219 votes
    4y

    no TN? I'd really like to know about TN.

    How are taxes calculated/adjusted in FL?

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    Hi Peter, it looks like I left off TN. Sorry about that. Counties in TN reappraise every 4 years for the most part. Acquiring a property in TN wouldn’t trigger a reassessment until the next reappraisal year. Davidson, Hamilton and Shelby County reappraised last year so the next reappraisal will not occur until 2025. Knox County is reappraising this year though. If you were looking at an apartment in Nashville (Davidson County) and let’s use a 2022 closing, the increase due to the sale wouldn’t be realized until 2025. Using this example, the 2025 assessment value would likely be assessed at 100% of the purchase price. The rates in TN typically drop during a reappraisal year though which can offset a significant increase in value (Ex: Davidson Co rate dropped from 42.21 to 32.88 in 2021). Taxes in TN are based on 40% of the Fair Market Value x the rate.

    Most sales in FL are assessed between 80-85% the year after the sale. The assessment ratio in FL is 100% but you also have to factor in the market value, assessed value and school value. There is a 10% cap assessment limitation for non-homestead properties (2nd homes, rentals, vacation homes, vacant land or commercial property). The 10% cap applies to all taxing authority millage rates EXCEPT the School Board Millage. The cap would prevent the assessed value from increasing more than 10% from the previous year’s assessed value and would remain year over year providing no change in ownership, etc. FL reappraises values annually. 

    I hope this answered your question. Let me know if you have any further questions. 


  • Investor · New York & TN · Member since 2019 · 325 posts · 219 votes
    4y

    Thank you very much! Hamilton County? Chattanooga?

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    @Peter Nikic Hamilton County is scheduled for reappraisal in 2025 as well. They are still aggressive but it’s not outside the realm of possibility to see 95% sale/assessment ratios during a reappraisal year. The county mill rate dropped 19% from 2020 to 2021. 

  • Joshua JanusBusiness Member
    Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
    4y

    @Brad S. What are your thoughts on a drop and swap?

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    @Joshua Janus ah, the good old drop and swap. It can work, but I haven’t seen many instances in the southeast where it has worked. Not saying it can’t work, there just isn’t enough data to show that it has in the southeastern states. Assessor’s are becoming more savvy and have access to loan data software, Costar, and they have staff on hand to look for this type of entity transfer. I know of one instance where it actually worked in Jefferson AL but that’s about it. Since you are in Ohio I am sure you are aware that the drop and swap worked for a few years in Counties like Franklin. However, the School Board is highly involved and has 24 months to file on a sale if the County doesn’t pick it up. No stone goes unturned in OH if the School Board is involved and when they do file the value is usually set at the purchase price. Again, not saying it can’t work, it’s just difficult to fly under the radar now since most taxing authorities are aware of it. Hope this helps!

  • Investor · New York & TN · Member since 2019 · 325 posts · 219 votes
    4y

    thanks!

  • Investor · Jacksonville, FL · Member since 2019 · 97 posts · 50 votes
    4y

    Hey Brad,

    Thank you so much for your willingness to help.

    Can you shed some light on the tax adjustment process in SC? I'm bidding on an interesting deal in Greenwood county.

    Thank you!

  • Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    4y

    @Brad Schewe

    Here’s an easy one. Who was the jerk who invented taxes and how do we go back in time to get rid of him?

  • Investor · Orlando, FL · Member since 2016 · 162 posts · 125 votes
    4y

    Does doing a cash out re fi of my own properties in Fl cause the property taxes to be re assessed ?

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    @Gerardo Waisbaum Easy question! Greenwood implemented their county wide reappraisal last year and isn’t scheduled to reappraise again until 2026. ALL SC counties reappraise every 5 years. I am assuming the property in question is multi family so the assessment ratio would be 6%. Assessment ratios vary by property type; 10.5% - manufacturers, real and personal property, 
    6% for real property (retail, apt, office, flex, etc.), 4% - 
    homeowners, primary residences. The great thing about SC is that outside of new construction which can also trigger reassessments during a non-reappriasl year, the assessed value is capped and can only increase 15% every 5 years. For example, you could have a market value of $2MM but the assessed value may only be $1.2MM ($1.2MM x 6% assessment ratio x rate). However, a sale can and will trigger a reappraisal the following year and in most cases we typically see the assessment value go to 100% of purchase (EX: 2022 purchase will be reassessed and increase to 100% of purchase price in 2023). There are effective appeal strategies, abatements, exemptions that an investor/owner can file in SC for properties that would reduce the future tax liability increase. If you want to send me a message we can get more into that if you like.

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    @Nick Rutkowski I hear you Nick!! I have to pay my fair share as well lol, but to answer your question, I believe property taxes amongst other taxes in the US started back in Colonial times (1796).. I am a little rusty on my history so anyone that wants to fact check me can. I think sales tax dates back to the Roman Empire and Julius Cesar who was the first to implement sales tax (fact check). Who loves taxes though.. I can tell you I am not a fan either!!

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    @Scott Esmail Hi Scott, nice to meet you. The property appraiser learns that a property has been transferred when a deed is recorded. A cash out loan on your home shouldn’t impact your value since no deed will be recorded. Most major taxing authorities now have access to loan info through subscriptions, but your cash out loan doesn’t meet the criteria and should have no impact on your assessment value. 

  • Investor · Orlando, FL · Member since 2016 · 162 posts · 125 votes
    4y

    thank you Brad

  • Member since 2022 · 25 posts · 4 votes
    4y

    Say I buy a rental and 27.5 years later there is no more depreciation.  What do the taxes look like at this point? And if I completely tear down and rebuild on year 27.5 does it all start over?  

  • Isoke CraigPro Member
    New to Real Estate · Houston, TX · Member since 2021 · 13 posts · 5 votes
    4y

    @Brad Schewe hey there. Thanks for your willingness to answer some questions when are properties reappraised in Houston, TX and what percentage off of taxes would a homestead exemption grant?

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    @Buck Dabill idk, ask me in 27.5 years

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    @Isoke Craig Nice to meet you. I deal mostly with commercial properties and it also depends on your age, city, and value because Texas municipalities offer caps, optional exemptions, disability, over 65 and veteran.  all home owners $20,000 off the value (EX: $100,000 -$20,000 = $80,000). If qualified, school districts offer at least $25,000. I do know that most TX counties follow a deadline of protest May 15 or 30 days after notice is issued, whichever is later. Sorry if this doesn’t help answer your question. there are a lot of factors that would determine what exemption you qualify for and I wouldn’t know unless I knew your age, city, value, if you have disability or are a veteran. 

  • Isoke CraigPro Member
    New to Real Estate · Houston, TX · Member since 2021 · 13 posts · 5 votes
    4y

    No worries this is a good start and appreciate you taking the time to respond. Best of luck on you investment journey. 

  • Investor · Kennesaw, GA · Member since 2018 · 98 posts · 127 votes
    4y

    Hi Brad 

    I'm surprised no one has asked, but I have several properties in GA. Is there a way to lower my property tax bill? I've looked at surrounding properties to mine, and my taxes are always in the upper 10% of the neighborhood. I've heard you can appeal the tax assessment, but I'm not really sure how to do that. Is that something I can hire someone to do? Do you think it would be worth it? My properties are up in the Kennesaw/Canton area if that matters.

  • Investor · Jacksonville, FL · Member since 2019 · 97 posts · 50 votes
    4y
    Quote from @Brad S.:

    @Gerardo Waisbaum Easy question! Greenwood implemented their county wide reappraisal last year and isn’t scheduled to reappraise again until 2026. ALL SC counties reappraise every 5 years. I am assuming the property in question is multi family so the assessment ratio would be 6%. Assessment ratios vary by property type; 10.5% - manufacturers, real and personal property, 
    6% for real property (retail, apt, office, flex, etc.), 4% - 
    homeowners, primary residences. The great thing about SC is that outside of new construction which can also trigger reassessments during a non-reappriasl year, the assessed value is capped and can only increase 15% every 5 years. For example, you could have a market value of $2MM but the assessed value may only be $1.2MM ($1.2MM x 6% assessment ratio x rate). However, a sale can and will trigger a reappraisal the following year and in most cases we typically see the assessment value go to 100% of purchase (EX: 2022 purchase will be reassessed and increase to 100% of purchase price in 2023). There are effective appeal strategies, abatements, exemptions that an investor/owner can file in SC for properties that would reduce the future tax liability increase. If you want to send me a message we can get more into that if you like.


     Thank you so much, Brad. I'll definitely contact you. 

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    @Michael H. thanks for the question about Georgia. I was surprised myself and could definitely help you out since that is what my company does for a living. We appeal the property taxes in the southeast. Okay, so your properties are located in Cobb County then. Cobb county mails their annual assessment notices the first or second week of April. If you want to message me the property details I would be happy to run a quick analysis to see if it would be advantageous for you to appeal. Let me know!

  • Specialist · Hoschton, GA · Member since 2022 · 21 posts · 29 votes
    4y

    @Gerardo Waisbaum glad I could help you out. Hit me up any time. Have a great day.

  • Member since 2021 · 10 posts · 0 votes
    4y
    Hi Brad - any idea for how poperty taxes are assessed on new construction in Bexar county TX (Converse)? Thank you for any input you might have.
  • Will GastonPro Member
    Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
    4y

    @Brad S. great thread! Is the ATI exemption available in all South Carolina counties? I mostly buy in Richland but am looking at a larger MFH in Newberry County.

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