In 2003, the State Comptroller reported that commercial properties were valued at more than 33% below market value. As a result, Appraisal Districts have become more aggressive in trying to raise property values, and higher values mean higher property taxes. As long as you are prepared, you can effectively manage your property taxes, even with the increasing efforts of Appraisal Districts to raise property values.

It is essential that an effective property tax management program is in place to ensure that a building is assessed at a fair market value in order to prevent property taxes from rising. It is important for building owners to be prepared during the appeals process because merely protesting a property does not guarantee a reduction in value. In fact, if the property owner is not prepared and cannot support their case for a lower value, it is possible that the property's value can be increased during the appeals process.

Understanding the timeline for the property tax system is the first step in preparing for the appeals process. From January through March, properties are evaluated and given a Proposed Value. Renditions, which are statements that indicate the owner's belief in the fair market value of the property, are due to the Appraisal Districts in most cases by April 15th. However, some districts have earlier due dates, and property owners must render by that date. It is also now required by law that all personal property be rendered on a yearly basis. Not rendering personal property will result in a penalty of 10% of the property taxes. Property Value Appraisal Notices are sent to property owners in April. Property owners have until May 31st to protest the property value, or 30 days from the date they receive the notice. Protest hearings are held from April until about October. If you still do not agree with the Final Value of the property, a lawsuit must be filed within 45 days from the date you are notified of the final value.

One of the most effective ways to ensure that your property is valued correctly is to have a reputable property tax management firm represent your property. Because they represent multiple clients, a reputable firm will have a good understanding of how to determine a property's fair market value, what can and cannot be used in establishing value, and can make sure you meet all filing deadlines. It is important to stay involved with the appeals and reporting process, and make sure your firm regularly reports to you. Your firm should ensure that you understand the timeline and the process for evaluating your property. They should also provide you with your property's status, for example, last year's value, this year's proposed value, any hearing dates and the results, and their recommendations.

If you decide to use a consultant, providing them with the following information should allow them to determine the value of your property:

1. Any problems with the property, i.e.: code compliance issues, major capital improvements needed, such as HVAC, roof repairs, excessive make ready expenses, etc.

2. Income/ Expense Statements from the previous year.

3. Rent Roll

More information may be needed, and your consultant will let you know. If you wish to implement a property tax program in-house, you will need all of the above information and have a solid understanding of how to evaluate your property using the income approach to value and the market approach to value.

Good Luck and Stay Informed!

Joe L. Gross