One of the simplest ways to show that your commercial property tax bill is wrong is that the local tax assessor overvalued your property.
A sale evaluation is one of the ways the local tax assessor can value your commercial property in order to calculate your property tax bill.
The tax assessor looks at what similar properties in the area have sold for.
Here are some of the ways they might overvalue your property:
- Failing to use an adequate sample size: If only a few properties have recently been on the market, they only have a small sample size to calculate an average from.
- Failing to account for location peculiarities: If you have a second-floor property, they should not compare it to a ground-floor one, as you do not have the same potential to capture walk-in customers who happen to be passing by. If your property is in the shade all day, they should not compare it to one that has day-long sunshine.
- Failing to recognize the significance of an address: Sometimes, the street’s name or a particular property’s history can boost its value massively. Just because you are within half a block of a specific place does not mean your property is worth nearly as much.
- Failing to account for the state of repair of the building: Two identical buildings that stand next door to each other do not have the same value if one of them has major structural issues and the other does not.
- Failing to account for additions: If the building next door recently got a thermal efficiency overhaul and solar heating system, it increases the value compared to yours, which still has the original 1960’s creaky pipes and draughty windows.
If you believe your property has been overvalued, seek help to understand how you can appeal your commercial property tax bill.