Property Management Appealing Property Taxes

9 May, 2017

Property Management Appealing Property Taxes

Property Tax Appeals

Property Management Appealing Property Taxes.   Using the loaded capitalization rate approach to appealing property taxes we have lowered the tax values by more than $3 million with significant property tax expense savings.

Sample Letter to the Madison Tax Assessor.

This letter is to notify you of our appeal of the fair market value for Parcel Number xxxxxxxx

We believe the fair market value should be adjusted based on the following determination of value.

Our approach to valuing the property is the loaded capitalization rate that is applied to the net operating income without the property tax expense included.  In this manner the property tax value can be projected since the property tax is based on a percentage of the value. The periodic property tax loading rate of 1.16% (millage rate x assessed percentage) is applied to the basic capitalization rate.

The six building’s occupancy has averaged about 60%, and rental rates averaging $10.50/sf.  The Landlord pays for the maintenance, property taxes, insurance, and common area utilities.  Consequently, the net effective rent to the property owner marginally covers the operating expenses. 

The buildings’ suffer from economic, functional and physical obsolescence and will require extensive monetary funding to upgrade and replace the aging heating and cooling systems, electrical, and plumbing. 

Result:  Tax Savings of about $10K.