Your Trusted Midwest Property Tax Advocate

How do vacant offices affect property tax?

On Behalf of | Sep 16, 2022 | Commercial Property Tax Appeals |

Minneapolis is one of many cities where the demand for office space has fallen dramatically over the past few years. That is causing big problems for city authorities.

Vacancies are well over the national average of 18%. In downtown Minneapolis, they are at 30%, and for the city overall, they are at 25%.

Charging property tax on office buildings is one of the key ways that cities fund their budgets. Property tax on downtown premises used to make up 40% of the city’s budget until the events of the past few years changed everything.

Demand for premium office space has fallen as more employees work from home

Many companies realized they could save money by downsizing to somewhere smaller and having employees hotdesk when they did come in. It leaves commercial property owners with empty space and massive holes in their income. 

Minneapolis city council has coped so far thanks to federal funding, but this is set to run out in two years, leaving people wondering how they will cope. They are well aware of that, so they may be reluctant to lower property tax as much as they should. It’s also possible that they may try to raise it to prepare for the withdrawal of federal funding.

How does that affect you as a property owner?

When property owners can no longer find anyone to rent their premises, charging the same amount of property tax becomes unjustified.

While the city needs to balance its books, so do you. If you feel the city is overcharging you, you may need legal help to appeal how much property tax you pay.