Property taxes apply to commercial and residential real estate, but you must ensure that what you pay is what’s actually due. Taxing authorities may make errors when they calculate the taxes your company owes. This might be due to using an inflated value or something similar, but it can lead to your company paying too much in taxes.
For some properties, an abatement is one option that can save money on taxes. An abatement is allowed for economic development, including expanding a company or redeveloping an area, so it’s beneficial for businesses to learn more about them to determine if your company qualifies for one.
What types of limitations apply to abatements?
Abatements are typically capped at 15 years; however, there are instances in which that can be extended to 20 years. There are also monetary limits to abatements. State law caps the total abatement to the greater of either $200,000 or 10% of the net tax capacity of the taxing authority.
Another limitation that applies is that properties that are located in special taxing districts can’t have abatements. Additionally, the Minnesota general property tax isn’t subjected to abatement. Other location-specific restrictions might also apply.
Commercial property taxes must be closely scrutinized so you can act if there’s an error. Appealing a commercial tax assessment requires you to move quickly because of time limits. Whether your company has received an abatement or not, you must ensure that you’re only paying what you should. Working with someone who knows the law and isn’t afraid to stand up for companies is beneficial in these cases.