California
- 06/20/2008
As the downturn continues, many institutional real estate companies including REITs are coming under increasing pressure from shareholders to achieve the returns promised on large property acquisitions that have been consummated over the past several years. With most commercial owners choosing not to market their properties, there is little relevant direct market evidence of diminution in value. This absence of solid anecdotal market evidence creates an especially difficult environment in which to appeal property taxes and instead leads to the continuation of properties being assessed at their original Proposition 13 base year acquisition values trended upward annually, by the 2% California CPI . Despite this, PTG’s California property tax team can often draw conclusions that there has been a significant deterioration in the financial performance of many office and retail properties in various markets where there are not yet sufficient open market sales indicating declining values. Click here for the complete article.
Pennsylvania – 06/15/2008
The State Tax Equalization Board has released the Common Level Ratios which will apply to property tax assessments for tax year 2009. This annual ratio change is, in essence, a revaluation of all properties in the state. Professionals from Paradigm’s Philadelphia office are prepared to perform a complimentary review of your assessment and related market value in order to determine if it is fair and equitable given the recent developments in most real estate sectors. Deadlines to appeal these assessments are August 1, 2008 or September 1, 2008 depending on class of county in which the property is located. For more information, please contact Jack Nash, Managing Consultant at (610) 409-9835 or email at jnash@paradigmtax.com.
Ohio – 05/09/2008
Utilizing the informal
appeal process to reduce costs for our REIT
clients’ Ohio properties
may be an excellent alternative to starting
the process more formally at the Board of Revision.
Click here to view the article
Texas – 05/08/2008
Most all Texas Assessors
define market value to be what a willing
buyer would acquire a property from a willing
seller for. It
is not surprising, then, when a property transacts,
the following year assessed value is at or
near the purchase price. Most property
owners and Texas consultants determine nothing
can be done to lower their tax burden because
this is what was paid.
Texas properties are
supposed to be assessed in a fee simple estate. Thus, a property
must be valued as of the annual lien date of
January 1. Most often, a purchase price
is a result of “blue sky” projections
resulting in a transaction more reflective of
a leased fee estate. Paradigm’s Texas
practice has been very successful in pursuing
reductions on average 25% below recent acquisition
prices using fee simple principles along with
equity. Contact Matt Fossey, Managing Consultant,
at (214) 635-4872 or mfossey@paradigmtax.com for
more information.
Florida – 05/05/2008
Florida voters approved
a property tax proposal (Amendment One) by
state referendum on January 29, 2008. This
constitutional amendment affords some measure
of relief to commercial property owners by
providing a tangible personal property exemption
of $25,000 and a 10% cap on valuation increases.
The 10% assessment
cap will go into effect on January 1, 2009. Historically, assessed
values on commercial real estate have been
below fair market value. Assessors are
working fast and furious to close this gap
between historical assessments and market conditions
as of January 1, 2008. Commercial property
owners should expect to see increased assessments
on their 2008 TRIM Notices (proposed tax notices)
received in August 2008.
Subsequent to the
2008 assessment, values can continue to increase
in declining markets. Even
if the cap limits an increase in a year of
growth, in subsequent years the property’s
assessment will continue to rise by 10%, regardless
of the actual increase or decrease in value,
until the assessed value equals the just value.
Since the 2008 value
establishes the base and will have a direct impact
on future property tax assessments, it is therefore
imperative to have your 2008 assessed value carefully
reviewed. For
more information, contact Mary Bonnell, Managing
Consultant at (954) 653-1499 or mbonnell@paradigmtax.com.
Fulton
County, Georgia – 04/20/2008
Following up on our news
bulletin dated 4/3/2008, all Fulton County,
Georgia reassessment notices have been mailed.
The appeal deadline is May 28, 2008. For a
review of your new assessment please contact
Oscar
Diaz, Director or Clifton
Woodman, Managing
Consultant both of the firm’s Atlanta
office.
Marion County (Indianapolis)
Update – 04/18/2008
Taxpayers owning property
in Marion County, Indiana will finally receive
their final installment of taxes that were
supposed to be due in 2007. These tax bills,
referred to as “reconciling
statements” will likely be mailed in
June with a July due date yet to be determined.
The delay in finalizing
2007 taxes was caused after The Department
of Local Government Finance determined that
a large percentage of commercial and industrial
property assessments were not trended as required
by Indiana Law. Click on the following link
to view the DLGF’s
order: http://www.in.gov/dlgf/retrending/Marion_County_Order.pdf
According
to Tim Evans’ article Reassessment
Nails Business Properties that
appeared in the Indianapolis Star on March
26, 2008, Commercial property assessments increased
32% and industrial property assessments increased
by 35%.
The deadline to appeal
these assessments will be 45 days from the date
the taxpayer is officially notified of the new
value. Paradigm Tax
Group’s Indianapolis office stands ready
to review the accuracy of assessments and appeal
them if necessary. For more information please
contact Steve Newman at 317-536-5183 or by email
at snewman@paradigmtax.com.
You may also contact Richard Archer at 317-250-7768
or by email at rarcher@paradigmtax.com .
National – 04/03/08
Paradigm Tax Group’s
local offices constantly monitor legislative
and reassessment issues. Current pressing
issues for taxpayers are as follows:
- California is currently
open for proactive negotiations with the
assessors regarding this year’s assessed
values.
- Marion County (Indianapolis
IN), values have increase 32-35% (apartments
as high as 70%). The reassessment was ordered
last year by Governor Daniels and performed
by county officials and a private contractor. Value
notices are due to taxpayers at this time.
(see related Industry News on our website)
- Fulton County (Atlanta,
GA), will be publishing new commercial
property tax notices within the next three
to four weeks. Tax assessments
are expected to increase up to 40%.
Please contact any of our California offices,
our Indianapolis office or our Atlanta office
for more information on these or any other
property tax issue you may want to discuss.
Indiana – 04/03/08
The recent reassessment
in Marion County, Indiana has resulted in
a 32% to 35% increase on commercial and industrial
properties located within the county. Please
refer to the attached
article for more information from indystar.com. For
more information and how this may impact your
property taxes, please contact Richard Archer
of PTG’s Indianapolis office at (317)
417-4650 or rarcher@paradigmtax.com.
Click here to view the article
Indiana – March
2008
Indiana Governor
Signs Off On Significant Property Tax Reform
Governor Mitch Daniels signed into law House
Bill 1001 which included numerous property
tax reform provisions. Among those:
- Elimination of the state property tax replacement
credit beginning with taxes payable in 2009;
- Eliminated inventory
from the definition of personal property
thereby eliminating he requirement to report
and deduct inventory values from the annual
personal property tax filing;
- Makes various changes in the appeal process;
- Caps property taxes in most counties beginning
with taxes payable in 2009 at:
- 1.5% for homesteads;
- 2.5% for residential property;
- 3.5% for non-residential real property
and personal property.
- Caps property taxes in most counties beginning
with taxes payable in 2010 at:
- 1.0% for homesteads;
- 2.0% for residential property;
- 3.0% for non-residential real property
and personal property.
- Allows a county council to adopt an ordinance
allowing a taxpayer to make installment payments
for property taxes due as a result of a reconciling
tax statement;
- In order to fund certain property tax reforms,
the sales and use tax rate was increased
from 6% to 7% on April 1, 2008;
- Eliminates township assessors as of July
1, 2008 in townships with less than 15,000
parcels and transfers their duties to the
county assessor;
- Requires a referendum in the 2008 general
election in townships with greater than 15,000
for the elimination or retention of the township
assessor;
- Extended the deadline to file an appeal
of a March 1, 2007 real property assessment
to the later of July 1, 2008 or 45 days from
the date a notice of assessment is sent.
You may direct any questions
related to Indiana property tax reforms to Richard
Archer in Paradigm’s
Indianapolis office. Richard may be contacted
at 317-250-7768 or by email at rarcher@paradigmtax.com.
California – 08/26/07
CALIFORNIA ASSESSMENT
APPEAL DEADLINES LOOMING – SEPTEMBER
15TH AND NOVEMBER 30TH..
In California, the
lien (assessment) date is January 1. The “Prop 13” real
property assessed values, and the business
personal property assessed values are determined
as of that date. The property tax fiscal (payment)
year begins 6 months later on July 1 and runs
until the following June 30. The fiscal year
is referred to by the first half designation.
The 2007/08 tax year is commonly called the “2007” year.
With only a very few unique exceptions, the
annual Prop 13 real property and business personal
property assessments are only subject to appeal
during a designated period. Annually, for all
58 counties, the annual regular assessment
roll appeal period begins January 2nd. The
appeal periods may end on either September
15th, or November 30th due to statutory notice
requirements committed to by the individual
counties. The county-by-county final deadlines
may change from year to year. Attached, please
find the county-by-county appeals deadline
schedule as published by the California State
Board of Equalization, the body that oversees
the enforcement of property tax legislation.
For a schedule of the 2007 individual appeal
deadlines, by county, see the following: www.boe.ca.gov/proptaxes/proptax.htm .
California – 06/27/07
In California, the
lien (assessment) date is January 1. The "Prop 13" real property assessed
values, and the business personal property
assessed values are determined as of that date.
The property tax fiscal (payment) year begins
6 months later on July 1 and runs until the
following June 30. The fiscal year is referred
to by the first half designation. The 2006/07
tax year is commonly called the "2006" year.
With only a very few unique exceptions, the
annual Prop 13 real property and business personal
property assessments are only subject to appeal
during a designated period. Annually, for all
58 counties, the annual regular assessment
roll appeal period begins January 2nd. The
appeal periods may end on either September
15th, or November 30th due to statutory notice
requirements committed to by the individual
counties. The county-by-county final deadlines
may change from year to year. Attached, please
find the county-by-county appeals deadline
schedule as published by the California State
Board of Equalization, the body that oversees
the enforcement of property tax legislation.
More information can be found at www.boe.ca.gov/proptaxes/proptax.htm.
Click
here to download article
Michigan – 05/29/06
Act 174 of 2006 was
signed by the governor into law on May 29,
2006. This new Act
amends filing procedures and deadlines for
real and personal property tax appeals. The
following changes will commence after December
31, 2006:
- Assessed valuation and exempt status for
real property classified as commercial, industrial
or developmental may be appealed directly
to the Michigan Tax Tribunal without first
filing a protest to the local board of review
where the property is located.
- Assessed valuation and exempt status for
personal property classified as commercial,
industrial, or utility may be appealed directly
to the Michigan Tax Tribunal without filing
a protest to the local board of review where
the property is located, if a personal property
tax statement was filed before the commencement
of the board of review, which may vary from
jurisdiction to jurisdiction.
- A Petition to the Michigan Tax Tribunal
is now filed timely, if postmarked by a U.
S. Postal Service, delivered in person, or
a designated delivery service, on or before
the filing deadline expires.
- The filing deadline
for commercial, industrial, developmental,
or utility real and personal property will
be May 31 of the tax year.
Texas – 01/15/06
The Texas Supreme Court ruled November 22 that
local property taxes used to pay for public
schools amount to an unconstitutional statewide
tax and has given the state until June 1
to fix the system. Texas' highest civil court
agreed 7-1 with one of three arguments brought
against the state by hundreds of school districts,
but found that overall school funding is
adequate and that poor districts have equal
access to facilities funding. Paradigm Tax
Group will update this section with further
information as it becomes available.
Louisiana – 01/15/06
In response to Hurricane Katrina, Louisiana
has enacted legislation providing for the
revaluation of flooded property (immovable
and corporeal movable (i.e. real estate and
tangible personal property). That is, flooded
property must be revalued. Property destroyed,
uninhabitable, or non-operational due to
other hurricane related causes will be revalued
as follows: If the local taxing jurisdictions
vote to use pro-ration, the tax bill will
be prorated for 2005 based on the number
of days the property was "habitable". This
pro-ration provision cannot be used by Jefferson,
Orleans, Plaquemines, and St. Bernard. If
the local taxing jurisdictions do not vote
to use pro-ration and in Jefferson, Orleans,
Plaquemines, and St. Bernard the property
will be revalued in its damaged state for
the entire year.
