5 Crucial Reasons You Need to Appeal Your Commercial Property Assessment
At Realty Tax Challenge we encounter concerns from real estate property owners about the process of appealing their commercial property assessment that can be unfounded. We would like to address and ease these concerns by tackling five of the biggest misconceptions and myths that people have about this process:
Myth #1: My property taxes could go up as a result of my appeal. When property owners consider submitting an appeal to receive a reduction in their property assessment, sometimes they are nervous to do so. They worry that the assessor will review their appeal, then take another look at their building and say, “Actually this is worth more than we assessed it for” and will raise their assessment instead.
Truth: That will never happen. It is actually against the law in NY State for taxes to be raised due to a grievance filing. The right to appeal is law, and has no adverse affects upon your commercial property assessment. In fact, your property value will actually increase if your tax assessment is lowered. It is more desirable to prospective purchasers because the taxes are lower, which results in lower monthly expenses.
Myth #2: Most properties are already reasonably assessed.
Truth: This is often not the case. The local government will send your assessment information in the mail. This will include the information they have about your property, including lot size and assessed value of the building and the land. Your property tax bill is based directly on your assessment, because they use the property’s assessed value to calculate the tax bill, typically by multiplying the assessed value by the local tax rate (which varies for each municipality).
However, this information is not always correct. Lot size or other basic information could be mistyped or incorrectly documented. Number and type of rooms or other important aspects of the building could also be wrong and this can affect the assessment.
There are numerous other factors that may have changed since your last assessment, or that may not have been taken into account. Have the rents in your building or surrounding areas gone down, while vacancy rents increased? Does your roof need replacing or your parking lot need repaving? Is your parking lot well-lit? Are your HVAC units old and inefficient? These can all affect the assessed value of your property.
Additionally, the county publishes their tentative tax roll at 1% for commercial property but then negotiates at a lower level of assessment. In light of this, it makes sense to hire a well-versed tax cert representative to accurately determine the correct fair market value for your property used in negotiating.
Myth #3: Appeals are hard to win.
Truth: It varies from county to county, but in Nassau County, it has been reported that 4 out of 5 appeals have been successful. The only way to know whether your property’s assessment is accurate, or whether you are paying more taxes than you should be, is to challenge it. Once you receive your assessment, you then have a set time frame in which you can submit an appeal. (Visit our NY Property Tax Grievance Filing Deadlines page for details on your locality).
Myth #4: I have appealed before and was denied, it’s not worth trying again.
Truth: A prior appeal has no bearing on a new appeal. Did you know that you can appeal your property tax assessment every year? So many elements may have changed. For example, comparable properties could have appealed their assessments, which will impact yours. An inaccurate assessment can cause you to overpay thousands of dollars a year, which could be put to better use investing back into your business. Over the course of many years, this could add up to hundreds of thousands of dollars. However, you only have a set window of opportunity, and if you miss the deadline for filing of the grievance, you cannot file for that year. So you must file by the deadline or you lose your chance to save money.
Myth #5: This process will cost me money and a lot of time and isn’t worth prioritizing, with everything else I need to do.
Truth: Working with Realty Tax Challenge costs you nothing up front, and we do not receive any fee until we have obtained a refund and/or tax savings for you. It effectively costs you nothing out of pocket, since our fee is taken from the full amount of the refund/tax savings.
You can go through the process on your own, but that is when it could end up costing you money and time. All expenses would be out of pocket and you would have to handle all the paperwork and any additional questions and communications on your own. By partnering with an expert commercial property tax grievance company like RTC, we handle the process for you and keep you updated regularly. Beyond providing us your initial information, the only thing you really have to do is wait for the appeal to go through.
Realty Tax Challenge has access to industry data that property owners don’t typically have access to. We are experts in understanding the true value of properties in NY. We know what the comparables are and understand NY state law and the valuation methods used. Preparing an appeal requires a lot of research, as well as experience in knowing how to present a case successfully. If you partner with RTC, by the time you receive your property tax assessment, you can already have all your paperwork in order for your appeal. Since there is only a short window of time in which to grieve your taxes (sometimes only 15 days), it’s worth retaining a commercial property tax grievance company in advance so that you have everything lined up. You may think, “why bother to do that until I see my assessment?” but as we outlined in the sections above, there are so many factors that can affect your assessment. Since it can only go down, it makes sense to appeal every year, regardless of what it states on your assessment paperwork.