Regular readers of our Minnesota Commercial Property Tax Appeals Blog will undoubtedly recall a recent post about the economic effects of the Covid-19 pandemic on owners of properties such as shopping centers. We’ll dive a bit deeper into the subject now.
Adding it up
These income-generating properties are contending with reduced occupancy, longer periods of time to fill the vacancies, reduced rents for new and existing tenants and a drop in profitability. Add it all up and it could well mean reduced property values, which can mean a reduction in assessed value. After all, assessors say the best way to determine value in these types of property is with occupied store sales.
The lower assessed value can then mean a reduction in property taxes.
Commercial property tax appeals
Given all of that, an article by Bloomberg Tax asks if a commercial property tax appeal is worth it. Their answer: “the actual costs of hiring a professional to assist with a commercial real estate tax appeal are small when compared to the potential savings.”
Of course, the reduction in property tax can provide substantial savings over many years.
Bloomberg Tax also gives a generalized overview of the commercial property tax appeals process that starts with an administrative hearing where an official examines the evidence you present and decides on the merits of your request for an adjustment.
If the decision isn’t favorable, you either accept it or appeal.
Presenting your case
In an appeal, the property owner’s legal representative files required documents that share financial and other details about the property and presents your case to the local Board of Appeal and Equalization. If the decision is again unfavorable, your case for property tax reduction can then be taken to court, where a judge will decide on the value based on testimony and evidence presented.
No one knows what the future holds, but today’s news is all about another surge in Covid-19 cases that’s resulting in renewed lockdowns that, in turn, continue to have big impacts on retail establishments and commercial property owners.