Fighting For The Underdogs In Commercial Property Tax Appeals

Part III: Are commercial property tax hikes coming?

On Behalf of | Apr 2, 2021 | Commercial Property Tax Appeals

In the first two parts of this three-part series on whether Minnesota commercial property owners can expect property tax hikes, we looked at the economic pressures on both local governments and property owners.

If you want to catch up, here are links to Part I and Part II.

A deluge

New York-based Marc Wieder of the Anchin, Block & Anchin Real Estate Group says attorneys who specialize in commercial property tax appeals “have been inundated this year with owners who have never applied in the past but who are applying now.”

Pittsburgh attorney Jason Yarbrough represents commercial property owners says he’s seen an increase in appeals by owners of large properties. Some owners – especially those in hospitality and retail – expect a long, painful recovery and are therefore more likely to file.

Other owners – especially those who entered the pandemic in good shape regarding their assessment – are more “mindful about putting their assessed value at issue, and they don’t want to do something in the short term that could be harmful for them in the long term,” he said.

Example of an increase

In an article on commercial property taxes, Bisnow cited Scott County, Iowa – about 350 miles south of Hennepin County – as an example of a jurisdiction raising assessments for both commercial and residential properties.

The county that includes metro Davenport has imposed an average increase of 6.5 percent in commercial property valuation.

Assessor Tom McManus said, “when we set the January 2021 assessed values, we’re basing it on the 2020 sales that have already occurred.”

Davenport is home to a number of large food processing employers, several defense manufacturers and healthcare employers.

Lower and higher

SitusAMC Managing Director of Real Estate Valuation Services Andrew Sabatini said many tax jurisdictions have proactively lowered assessments to mirror decreased valuations.

“Still, we don’t anticipate this translating into lower tax liabilities for property owners,” Sabatini said. He said rising tax rates will allow “taxing entities to effectively offset the pandemic-related impact of lower assessments while potentially curbing the volume of tax appeals.”

As you can see, a variety of strategies and philosophies are available to commercial property owners and taxing jurisdictions in the tug-of-war over accuracy and fairness in taxation.