Multifamily property tax strategies

Multifamily property tax strategies

Atlanta, GA · Member since 2017 · 70 posts · 16 votes
Hi Everyone, I am considering this property which is valued at 3.8 million by the local county in Dallas Tarrant county area. Current taxation for that is close to hundred thousand and the seller at this point is trying to protest the property tax. Last year I think they paid close to 75,000 property tax. This property may sell close to 5.3 million or so and I’m trying to get an estimate on what the new taxation might be if it’s close to 120 thousand at the full price then it just becomes too much increase in the price point. Before committing to this property how do I make sure the actual tax maybe. How local counties find out the sale price of the property for a new taxation. Do they go by 80% of the value or the full value? Are there any other strategies to lower your tax? Might need to utilize attorney for that, any suggestions and thoughts on the success of this. Any recommendations for attorneys who are good at this will be appreciated. Thanks in advance!
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  • Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    Generally I do 80% for Dallas County and 85% for Tarrant County. For a better estimate you should reach out to your tax protesting company and they can review the historical data, etc. The county can get the sales price in multiple ways, including access to Costar like anyone else. If not the actual sales price they can see the listing price. 

  • Rental Property Investor · Cincinnati, OH · Member since 2017 · 258 posts · 207 votes
    7y

    @Sanjoy V. property taxes are always the largest expense of owning the property and should be managed like every expense. Most jurisdictions have an appeals process to contest the valuation but the process varies by jurisdiction. The key thing to keep in mind is that the county assessment is based on an overview of the entire market so if you Typically spend a few hundred dollars on an individual appraisal You can often get the property taxes reduced.

    In addition, there are other strategies such as an entity purchase or even a structured sale that can help protect Against a huge tax increase.

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