NREI: The Top 10 Cities with the Highest Commercial Property Taxes

As property values continue to recover or even surpass values achieved at the peak of the past cycle in 2006 and 2007, rising property tax bills shouldn't come as a surprise to landlords. While some jurisdictions have aggressively increased values to keep up with market recovery and increase revenue, a lag time in reassessment periods in other jurisdictions is causing some property tax bills to skyrocket. Jurisdictions that reassess values every two or three years rather than annually are playing catch-up and making significant property value increases.

According to the National Real Estate Investor, some cities also have introduced significant increases to their effective tax rates to raise additional revenue. According to the annual 50-State Property Tax Comparison Study conducted by the Lincoln Institute of Land Policy and the Minnesota Center for Fiscal Excellence, effective tax rates on commercial properties for the 53 cities included range from a low of 0.66 percent to a high of 4.09 percent. The top 10 metros in the study for the highest effective commercial property tax rates include:

  1. Detroit - 4.09 percent
    Industrial Property Tax Rate:  (#2) 2.99 percent
    Multifamily Property Tax Rate: (#2) 4.79 percent
  2. New York City - 3.93 percent
    Industrial Property Tax Rate:  (#6) 2.36 percent
    Multifamily Property Tax Rate: (#1) 5.47 percent
  3. Chicago - 3.86 percent
    Industrial Property Tax Rate:  (#14) 1.92 percent
    Multifamily Property Tax Rate: (#40) 1.17 percent
  4. Bridgeport, Conn. - 3.81 percent
    Industrial Property Tax Rate:  (#10) 2.09 percent
    Multifamily Property Tax Rate: (#4) 3.81 percent
  5. Providence - 3.71 percent
    Industrial Property Tax Rate:   (#13) 1.95 percent
    Multifamily Property Tax Rate: (#21) 1.90 percent
  6. Aurora, Ill. -  3.43 percent
    Industrial Property Tax Rate: (#11) 2.06 percent
    Multifamily Property Tax Rate: (#3) 3.93 percent
  7. Columbia, S.C. - 3.24 percent
    Industrial Property Tax Rate: (#1) 4.20 percent
    Multifamily Property Tax Rate: (#7) 2.95 percent
  8. Des Moines, Iowa - 3.01 percent
    Industrial Property Tax Rate: (#16) 1.82 percent
    Multifamily Property Tax Rate: (#5) 3.59 percent
  9. Minneapolis - 3.00 percent
    Industrial Property Tax Rate: (#18) 1.75 percent
    Multifamily Property Tax Rate: (#22) 1.75 percent
For the full article from the National Real Estate Investor, click here

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