Archive for August, 2011

D.C.’s Vacant Property List Mushrooms

Wednesday, August 31st, 2011

More than 1,350 owners of what the District of Columbia has deemed vacant or blighted property are about to receive a shock in the mail in the form of their property taxes. According to the Washington Business Journal, the District’s tax office is mailing second half 2011 tax bills this week, and 1,115 properties will be billed at the Class 3 vacant rate of $5 per $100 of assessed value, up from only 444 Class 3 properties in the first half of the year. An additional 243 properties are being billed in the Class 4 blighted rate of $10 per $100 of assessed value.

While the majority of these properties are residential, commercial properties still are apparent on the list. The rates of $5 for Class 3 and $10 for Class 4 properties are significantly higher than the standard commercial property Class 2 rate of $1.65 for the first $3 million of assessed value and $1.85 above $3 million. Properties that are under renovation or are listed for sale or for rent are generally able to receive exemptions of the class change.

To read the full article from the Washington Business Journal, click here.

Posted in Eastern, Real Property | No Comments »

Commercial Real Estate Markets Sluggish

Tuesday, August 30th, 2011

Projections for significant growth in the commercial real estate market made earlier this year have now been moderated due to weaker than expected economic growth and job creation. Despite the slower than projected growth, modest improvements are expected over the coming year. According to Business Journal Daily, commercial vacancy rates from Q3 of 2011 to Q3 of 2012 are forecasted to decline 0.3% in the office sector, 0.6% in the industrial sector and 0.7% in the retail sector. There is no forecasted change in the multi-family sector as it is currently experiencing low vacancies.

Market experts are currently showing erosion in market conditions with all regions of the country posting declines except the West. Office and industrial leasing activity is currently below historic levels according to 80% of market experts with 70% of the same group reporting rents below what they were a year ago. Tenants remain in control with many benefiting from moderate concessions and rent discounts.

To read the full article from Business Journal Daily, click here.

Posted in Eastern, Industrial, Mid America, Multi Family, Office, Real Property, Retail, Western | No Comments »

Kansas Property Tax Appeal Fees Double

Friday, August 26th, 2011

A Kansas property tax appeals panel unanimously voted to double many fees it charges business owners who apply for an appeal on their properties. According to the Kansas Reporter, these higher fees, which businesses must pay to settle any tax dispute involving more than $10,000, are the second such hikes since November. The increases are in an attempt to offset reduced legislative funding for the panel and could end up providing $1 million of the court’s budget this year.

The initial proposal from the tax court was to raise fees by $7,000 but was reduced at the request of a public hearing earlier in August. The hope is that the increases just passed are more realistic. The property owner obviously has to pay some sort of fee to discourage frivolous filings, and if those fees are too low, it can be a waste of public resources, but if they are too high, access to the court is restricted and tax justice would only be available to a limited amount of owners.

To read the full article from the Kansas Reporter, click here.

To see a previous post regarding the build up to this decision, click here.

Posted in Mid America, Personal Property, Real Property | No Comments »

Michigan Business Tax Repeal Could Hit Cities Hard

Thursday, August 25th, 2011

The phasing out of the personal property tax on Michigan businesses is leaving city officials in fear of even more cuts to their already shrunken revenues. According to The Detroit News, Michigan municipalities typically get about 11% of their property tax revenue from the tax on equipment such as machinery, computers and office furniture, but the impact of a repeal on some cities and townships would be much more severe. Detroit alone stands to lose roughly $51 million if the tax is repealed and not replaced.

Overall the personal property tax in Michigan generates about $1 billion a year, with about 80% going to local governments, 15% to local school districts and about 5% to the state’s general funds. Many believe that the repeal of the tax would be punishing corporate friendly communities and industrial cities where personal property makes up more than half of property tax revenues. On the other hand, well-off residential communities that don’t have to put up with the noise, dirt and other downfalls of industrial communities will only be missing out on about 2% or less in property taxes if the tax is repealed.

To read the full article from The Detroit News, click here.

Posted in Economy, Mid America, Personal Property | No Comments »

Pennsylvania-wide Real Estate Assessment Information

Wednesday, August 24th, 2011

In light of recent news coming out of Allegheny County regarding possible tax increases, as well as the appeal deadline for some Pennsylvania Counties coming next week on September 1^st and the Philadelphia deadline fast approaching on October 3^rd, we at Paradigm Tax Group wanted to take this opportunity to summarize some important new information pertaining to real estate assessments in Pennsylvania.

Philadelphia 2012 Real Estate Market Value Appeal

The City of Philadelphia Board of Revision of Taxes is currently mailing 2012 real estate assessment notices ahead of the October 3, 2011 appeal deadline. These notices calculate market values at the previously set common level ratio of 32%. The current notices make no mention of the 18.1% ratio set in July 2011 by the State Tax Equalization Board (more on that here). This significant drop in ratio, as well as the 14% tax rate increase over the past two years, could have major implications regarding assessment values and appeals in the city. In light of these changes, Paradigm Tax Group recommends property owners in Philadelphia consider a professional review of their assessments in order to determine the viability of filing an appeal by the October 3 deadline.

Allegheny County (Pittsburgh) Property Owners Could See Possible Tax Increase

Commercial property owners in Allegheny County could see an increase in taxes if the County cannot meet its January 1^st deadline for producing an official tax roll after a court ordered, county-wide reassessment. Officials have said they can’t submit certified values of properties until April 2012, delaying the printing of tax bills. The plan to make up for lost revenue then is to take out a Tax Revenue Anticipation Note on property owners (read more).

As a result of the possible increase in taxes, the judge monitoring the county’s reassessment effort has asked officials to determine how long it would take to produce new property values if they concentrated all of their efforts on the city of Pittsburgh and Mt. Oliver portions of the county. This would be in an effort to meet the January 1^st deadline just for those areas for issuing certified assessments in which municipalities use for setting property tax rates and balancing their budgets (read more).

Washington County Needs More Time to Enact Statewide Property Tax Reform

State legislators and county commissioners have told property owners in Washington County that they need more time, and their assistance, to enact statewide property tax reform before the county is forced to conduct a property assessment (read more).

Posted in Eastern, Real Property | No Comments »

Tax Appeals Soar as Commercial Property Owners Protest Valuations

Tuesday, August 23rd, 2011

The decision by the Pima County, Arizona Assessor’s Office in February to raise commercial property valuation in 12 of 14 categories was met with much negative reaction as many thought it did not reflect economic reality. According to Inside Tucson Business, excluding multi-family properties, 3,267 owners challenged the assessments of their commercial property, a 21% increase from last year’s number of 2,691. The first level of the Assessor’s Office meetings saw reductions for 1,619 property values, with the most common reason being the property was over-valued based on comparables.

Because real estate values have dropped so dramatically, many of these appeals are deserved of reductions. About 25% of the cases have been settled at the first level with another 25% expected to be settled at the state board of appeals. If property owners are still unsatisfied, they have the option of going to court. Initial estimates say the average reduction achieved is around 30% with some going as high as 50%.

To read the full article from Inside Tucson Business, click here.

Posted in Economy, Multi Family, Real Property, Western | No Comments »

July Hotel Demand Increases 3.6%

Monday, August 22nd, 2011

The U.S. hotel industry reported the largest number of rooms sold during a calendar month in July 2011, with a 3.6% increase over July 2010. According to data from STR, the industry sold over 105 million roomnights in July, only the second time the industry has sold more than 100 million roomnights in any given month, with the last time being July 2010. The overall U.S. hotel industry July occupancy increased 2.9% to 69.9%, average daily rate ended the month up 3.9% to $103.09, and revenue per available room rose 6.9% to $72.07.

Luxury hotels reported the largest increase in all three key performance metrics with occupancy rising 3.5% to 74.2%, average daily rate up 7.4% to $245.89, and revenue per available room increasing 11.1% to $182.52. The only segment that reported a decrease in any of the key performance metrics was midscale hotels whose average daily rate decreased 0.9% to $78.62.

To read the full article from HotelNewsNow.com, click here.

Posted in Hospitality, Hotels, Real Property | No Comments »

Real and Personal Property Valuation in Florida

Friday, August 19th, 2011

Have you considered a simultaneous review of your Florida real and personal property valuations for 2011? Paradigm Tax Group has a unique approach to valuing hotels/resorts, golf, and assisted living properties in Florida through combining our knowledge and expertise in real and personal property to achieve the lowest possible values of behalf of our clients. Whether you’re unsatisfied with your current representation, or simply interested in a second opinion, Paradigm Tax Group has you covered through our local experts in real estate and personal property in Florida, combined with the industry expertise of our hospitality veteran expert, Sharif Mitchell.

Ready to get started? We only require a few pieces of documentation to begin our review and you’ll be well on your way to maximizing your real and personal property tax savings potential. TRIM Assessment notices for North Florida Counties are already in the mail and will continue to be delivered until the third week of August for South Florida Counties. You will have 25 days from the date of the TRIM notice to file appeals with the Value Adjustment Board.

For more information on Paradigm Tax Group, including hospitality tax savings examples achieved in the Florida market and important dates in that area, click here.

Posted in Eastern, Paradigm Info, Personal Property, Real Property | No Comments »

Property Tax as an Economic Development Tool

Thursday, August 18th, 2011

Present and future property tax implications are a major factor for companies that are deciding to expand or relocate, as they represent the largest tax burden amongst businesses. According to the IPT August 2011 Tax Report, property taxes on business property increased 1% in the past year, totaling $249.5 billion, or about 40.3% of total state and local business taxes. With the declining values of residential properties, additional property taxes are now more than ever being shifted toward businesses.

Many state and local governments are beginning to offer property tax abatements, rebates or reductions in an effort to draw more business investments to their areas. Still, with increasing demands on these governments and the sluggish economy causing lower tax collections, there are changes in the ability of some local government authorities to continue to support economic development using property tax revenues.

To read the full article from the IPT August 2011 Tax Report and see some area specific examples of tax breaks being offered by local governments, click here (article begins on page 4).

Posted in Economy, Personal Property, Real Property | No Comments »

LA Mayor Calls for Removal of Limits on CRE Property Assessments

Wednesday, August 17th, 2011

Los Angeles, California Mayor Antonio Villaraigosa has proposed the dismantling of the state’s Proposition 13 in favor of a “grand bargain” that would boost levies on business property. According to Bloomberg, Villaraigosa urged the removal of Proposition 13′s limits on commercial property assessments while retaining its cap from homes. The tax revenue could be boosted by up to $36 billion a year and in turn promote budget stability and restore public-school funds.

According to Villaraigosa, “It’s time to address the unfairness inherent in a system that allows Wall Street hedge-fund managers to devise complex real-estate investment trusts that give the super-rich a free pass on taxes every ordinary homeowner in California has to pay.” He is in favor of keeping the Proposition’s protections for homeowners only. The 1978 referendum allows unlimited reassessments for tax purposes only when property is sold, but excludes some commercial transactions in REITs.

To read the full article from Bloomberg, click here.

Posted in Economy, Real Property, Western | No Comments »

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