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Looking Out for Property Tax

With any state, the majority of revenue comes from both personal and real property tax. Combined with the erosion of local tax base, many home and business owners may face higher assessed values then in past years. Some tax assessors may be too aggressive with their assessments so they can maintain the tax revenue, but it is important to keep on top of your assessed property value to make sure that you are not paying too much in property tax.

The object of property assessment is to provide fair and equitable value for each property. Most properties are assessed using fair market value. Fair market value is “the price in a competitive market a purchaser, willing but not obligated to buy, would pay an owner, willing but not obligated to sell, taking into consideration all the legal uses to which the property can be adapted and might reasonably be applied.” The property assessment is either full market value or a percentage of the market value. States then take the assessed amount and multiply it by the millage to get the amount owed in real estate taxes. This process can take place yearly, or over a mandated time, usually 3-6 years.

Determining the assessment of residential home tends to be more straightforward then the process of industrial or commercials properties. Houses are compared to other homes in comparable neighborhoods that have recently sold to determine the assessed value. Commercial and industrial properties have more variables to consider before an appropriate assessment is generated. Since there are so many variables, the chance of an assessment error is there, giving the business owner a chance for an appeal of the assessment.

Timely tracking of personal property assessment is essential to guarantee deadlines are not missed. Many only offer a brief deadline for appeal, usually 15-45 days from the assessment date. Once the business owner determines if there is a tax assessment that warrants an appeal, the appeal is filed. There are three levels to the appeals depending on the severity of the assessment. Each needs proper detailed documentation. If you think that there is a problem with your assessment then it would be beneficial to consult with a CPA firm for assistance.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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