This is the time of year that commercial property owners tend to dread—the deadline for filing property tax protests. May 15 (the protest deadline) is right around the corner, and however inconvenient it may seem to deal with the hassle of protesting, it is worth the cost savings—if you engage an experienced, knowledgeable property tax consultant. The fact is, according to the National Taxpayers Union Foundation, about 30-60% of taxable properties in the U.S. are over-assessed, so there is a good chance your commercial property(ies) are, too. If you decide to be one of the 5% of taxpayers that actually challenge their tax assessment with your local appraiser, here are a few pitfalls to avoid when protesting your commercial property taxes:
1. Trying to protest the property value yourself
There are a lot of things that you can “DIY,” but when it comes to protesting your commercial property taxes, it’s best to leave it to the pros. Tax advisors bring a layer of familiarity with tax code, knowledge of surrounding property comparables (comps), and familiarity with appraisers or valuation boards—all important aspects to leverage.
2. Engaging an attorney too soon
While there are obviously some cases where you may need to engage an attorney, the goal of your property tax consultant should be to avoid costly litigation. There are various steps that take place prior to litigation including market analysis, assessments, negotiations, and protest hearings. It’s important to work with a tax consultant who doesn’t have a vested interest in moving quickly to the litigation phase of the process, simply to collect legal fees.
3. Hiring a tax advisor with only residential/personal property expertise
There are a number of tax consultants in the industry, but it’s important to work with an advisor that is an expert in commercial properties. While a consultant may excel in residential or personal properties, there are certain intricacies in dealing with commercial properties, and you’ll want to ensure your advisor is equipped to assist with your business’ unique needs.
4. Working with a consultant with a limited network of resources
Protesting property taxes requires strong relationships with several parties. Throughout the process, your tax consultant will file renditions, protest values, work with county appraisers, attend informal and formal hearings on your behalf, coordinate hearings, and when absolutely necessary, engage legal counsel. Your tax consultant will act as the “quarterback” for the full process, and because so many different parties are involved in the full process, it’s important that they have a strong network of resources and partners to leverage.
If you think there's a chance you're overpaying on your commercial property taxes, don't wait until it's too late to speak to a professional. Click here to request a free property tax consultation.