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Commercial property tax
Commercial property taxes are a significant and perpetual expense for property owners, determined by an assessor's guesstimate of value using the least reliable cost approach. Property owners can annually protest the assessed value to potentially reduce their tax burden, targeting both excessive and unequal values. With multiple taxing jurisdictions involved, understanding and challenging these assessments is crucial for retaining more of one's finances.
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Commercial property tax
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- 2. Commercial property taxesare one of the largest expenses for most owners of commercial real estate. The commercial property tax is charged forever; it is never fully paid. The government estimates a value each year and extracts money from commercial property owners unless they appeal. The commercial property tax is essentially a wealth tax.
- 3. How to Calculate CommercialProperty Tax The assessor’s value is just a guesstimate using the cost approach to value (in most cases). The cost approach is considered the least reliable method of valuation by licensed appraisers. Most assessor values are not accurate. The assessment ratio is 100% in most states. The taxable value is just the assessor’s guesstimate of value. Some states have an assessment ratio. The assessor’s estimated value is multiplied by the assessment ratio to determine the taxable value, or assessed value. There are often multiple taxing jurisdictions for each property, including city, county, school and special districts. The tax rate is the sum of the tax rates for all relevant tax jurisdictions. You can do little to impact the tax rate but do much to impact the assessed value. 01 02 03
- 4. How to Reduce CommercialProperty Taxes Protest the value of your commercial property annually. Yes, protest each and every year. Even if the value did not change, protest the value. The assessor’s values are based on the cost approach, the least reliable method of appraisal. You can protest both excessive value and unequal value each year. Protesting unequal appraisal is based on similar properties having a more favorable assessed value. Even if your assessed value is below market value, you can likely support an appeal on unequal appraisal.
- 5. O’Connor means propertytax reduction with the right attitude. The government wants your money. You earned it; it is your money. Let us help YOU keep more of YOUR money.
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