Archive for the ‘Paradigm Info’ Category

Minnesota Tax Bill Includes Cap on Property Tax Hikes

Monday, May 20th, 2013

Several cities and counties in Minnesota will soon see a big increase in their state aid, and in return, they will be required to tamp down property taxes. A wide-reaching tax bill finalized over the weekend includes a one-year limit on local tax levies and is designed to keep rates from rising at a rapid pace for 2014 property taxes.

According to SFGate.com, the cap is somewhat complicated because it bases the limit on the amount of new aid a local government gets. Except in rare cases, new local levies will be held to three percent or less, while many cities will have to freeze tax rates entirely. To compensate for the lost property tax revenue, as part of the bill, cities and counties won’t have to pay sales taxes on purchases for the first time in decades.

Posted in Paradigm Info | No Comments »

Office Demand Still Catching Up With Job, Business Growth

Friday, May 3rd, 2013

Although the average employment rate of nationwide office is growing at a little over 2%, demand for that space grew at half that rate during the first quarter. According to the CoStar Group, despite moving in fits and starts, the recovery has helped stabilize the office market and support relatively high property valuations, but at the same time, modest job growth seen to date has yet to translate into meaningful demand for office space, causing rents to remain at ‘discount’ levels.

In order for things to really turn around, and for office operators to be able to charge higher rents, a lot of the excess space left over from the downturn must be eaten up. This process could take some time. Many believe that the office vacancy recovery is less than halfway done, and as it stands, there is more upside in the office sector than other areas of commercial real estate.

To read the full article from the CoStar Group, featuring insight from Paradigm Tax Group, click here.

Posted in Economy, Leased, Office, Paradigm Info, Real Property, Western | No Comments »

Hotel Transactions: The Rise in Activity and Tools to Help Minimize Taxes

Tuesday, April 30th, 2013

The real estate market has significantly improved since the beginning of the Great Recession, as indicated by recent year-end reports, such as the ULI Emerging Trends 2013. As the U.S. continues to see modest gains in market fundamentals, the recovery will maintain throughout the year. Certain asset classes are seeing tremendous value increases, including the hospitality sector.

The market for available and favorable financing, paired with great operating performance, has led to an up-cycle within this property sector. It has also created a more compelling reason for Real Estate Investment Trusts (REITs), Private Investment Management Firms and Sovereign Wealth Funds to chase hospitality assets. As a result, there has been an uptick in hospitality transactions over the past 12 months, and experts are predicting further activity throughout 2013.

To read the full article from Paradigm Tax Group, click here.

Posted in Country Clubs, Economy, Golf Courses, Hospitality, Hotels, Paradigm Info, Real Property, Resorts | No Comments »

Enforcing “Transparency” in CA Property Tax Consulting Industry

Wednesday, April 24th, 2013

Due to the on-going political scandal in the Los Angeles County Assessor’s Office and the backlash of negative press resulting from the case, the Los Angeles County Board of Supervisors has proposed an ordinance to monitor and enforce more “transparency” in California’s property tax consulting industry. The Los Angeles District Attorney has described the scandal as a “pay to play” scheme involving campaign contributions to the Assessor in return for lowered property tax assessments for those same contributors.

AB 1151, introduced by Assembly member (and former San Francisco Assessor-Recorder) Phil Ting (D-SF), is attempting to generate the desired transparency by establishing a standardized, statewide property tax agent registration system that will be accessible by the public. The legislation is being considered by various committees and is subject to numerous revisions.

To read the full article from Paradigm Tax Group, click here.

Posted in Financial Services, Paradigm Info, Real Property, Western | No Comments »

Another Assault on Proposition 13?

Tuesday, April 23rd, 2013

In an effort to potentially raise billions of dollars in commercial property tax, California lawmakers are considering making controversial changes to Proposition 13. Under current law, dating back to Prop 13’s passage in 1978, property taxes are only reassessed upon transfer of ownership or, if title is held in a legal entity, change of control (obtaining a greater-than-50% ownership interest) in the legal entity. Once re-assessed, values cannot increase more than 2% annually. However, proposed legislation (AB 448) introduced by Assemblyman Tom Ammiano would not only require assessors to revalue targeted commercial properties more frequently, but would also bring them up to current market values. Under Ammiano’s bill, publically-traded companies would have their real estate assets reappraised every three years based on the notion that more than 50% of their issued stock trades over that period of time.

To read the full article from Paradigm Tax Group, click here.

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

Transfer Tax Refunds Available in the City of Philadelphia

Tuesday, April 9th, 2013

Taxpayers that paid Pennsylvania or Philadelphia real estate transfer tax on certain transactions involving real property located in Philadelphia during the period of July 1, 2012 through January 5, 2013 may be entitled to refunds.

Pennsylvania publishes a common level ratio (“CLR”) for each county in the Commonwealth, effective from July 1 until June 30 of the following year. In certain instances (e.g., taxable leases or acquisitions of real estate holding companies), the real estate transfer tax triggered by a transaction is based on a “computed value.” This value is the product of the assessed value of the property and the reciprocal of the county CLR (the “CLR Factor”) in effect at the time of transfer.

Because of ongoing litigation regarding the amount of the Philadelphia County CLR, the CLR Factor for Philadelphia County that was initially published by the Pennsylvania Department of Revenue for the period of July 1, 2012 through June 30, 2013 was subject to change. On January 5, 2013, the Pennsylvania Department of Revenue published a corrected CLR Factor for Philadelphia County. This corrected CLR Factor applies retroactively to all transactions on or after July 1, 2012. Because the effective date of the corrected CLR Factor is retroactive, any transfer tax paid with respect to real property located in Philadelphia County based on the tentative CLR Factor during the period of July 1, 2012 through January 5, 2013 was overpaid.

To read the full article from Paradigm Tax Group, click here.

For additional information and assistance in obtaining transfer tax refunds, contact one of the following Paradigm Tax Group Professionals today:

Holly Unck, Senior Managing Consultant: hunck@paradigmtax.com, (602) 427-4059

Jack Nash, Senior Managing Consultant: jnash@paradigmtax.com, (610) 409-9835

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

Tax Structure in Texas Helps Businesses Gain an Advantage

Wednesday, March 13th, 2013

All things considered, businesses large and small want to locate where they feel they have an edge on their competition. Geography is key as it relates to labor and infrastructure, however, recent evidence shows the states with the best tax systems will inevitably attract more new businesses no matter where they are located on the map. The reason is simple — taxes eat into profits. Higher taxes for businesses ultimately mean higher costs for consumers, employees and shareholders.

In his recent article, published by Texas Real Estate Business, Matthew Fossey discusses the friendly business user environment and resulting financial benefits that Texas provides to business owners in contrast to most other states, as well as alternative revenue sources (taxes) the state is considering for the future.

To read the full article by Matthew Fossey, Senior Managing Consultant in Paradigm Tax Group’s Dallas Office, click here.

Posted in Economy, Mid America, Paradigm Info, Real Property | No Comments »

Certain North Carolina Reassessments May Be Illegal

Tuesday, March 12th, 2013

In 2007, Brunswick County, North Carolina conducted a countywide revaluation and was scheduled to do so again in 2011. However, in 2008, the county raised taxable values by hundreds of thousands of dollars for over 100 parcels owned by the Ocean Isle Palms development company.

The county argued that the reassessments were based on comparable values that had recently become available. The 2007 lot values were based upon discounts for undeveloped land instead of comparable sales. Officials contended the reassessments were permissible under NCGS §105-287 that allows counties to correct mistakes and apply the corrections to future tax bills.

The North Carolina Supreme Court determined the reassessment was illegal because it used an entirely new method of appraisal. “The County may not retroactively label as error an historically approved method endorsed by the schedule,” wrote Associate Justice Robert Edmunds for the court’s majority.

If you receive a reappraisal notice this year on your North Carolina property, it is essential to review the assessment and ensure that you are not being tax illegally. For more information contact Cameron Moore, Senior Managing Consultant at Paradigm Tax Group, at (678) 964-6002 or cmoore@paradigmtax.com.

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

Philadelphia Assessment Notices Mailed Out to Property Owners

Tuesday, February 26th, 2013

Last week, the City of Philadelphia, Pennsylvania mailed out assessment values to all property owners within the city limits. The valuations are expected to be effective for the 2014 tax year. The mailings signal the next phase of the city’s ongoing AVI (Actual Value Initiative). Data collection and valuation has been underway for nearly three years and this is the first citywide reassessment in more than 30 years.

The first level of informal appeal is at the assessor level or the Office of Property Assessment (OPA). This is an informal meeting with the evaluator with the filing deadline being March 31st. Based on information submitted, and the fact that the OPA is requiring 2011 and 2012 income and expenses, the OPA may increase, decrease or no change the assessment. If a property owner is not satisfied with the outcome at this level, there is the formal appeal deadline of October 7th to the Board of Revision of Taxes (BRT).

For more information, please contact Jack Nash, Senior Managing Consultant out of Paradigm Tax Group’s Philadelphia office, at (610) 409-9835 or jnash@paradigmtax.com.

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

Transaction Price Segregations’ Hone In On Accuracy

Wednesday, February 20th, 2013

In the world of ad valorem taxes—a tax based on the assessed value of real estate or personal property—the crux of appeal issues is the determination of fair-market value. Everyone has an opinion, from the assessor to the taxpayer. Generally, these opinions are far from each other. This situation often necessitates the taxpayer having to pay a third-party appraiser for an opinion, which can be viewed as impartial and, with hope, more reliable.

This environment has led assessors to believe that appraisers are needed by market participants to determine how much to pay for assets. Assessors confuse the idea that lenders need third-party appraisals to back up their lending decisions but participants in the market, or market makers, do not rely on appraisers to determine prices.

So this situation begs the question: Whose information is more reliable—that of an appraiser or a market maker? It is blatantly obvious: It’s the market maker.

To read the full article from Paradigm Tax Group, click here.

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

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