There are two types of property taxes in America, one is the tax on the value of your land and buildings, and the second is on accessories such as machinery, delivery vans, and business furniture, also called personal property. For owners and managers of commercially intensive properties such as office buildings, retail, hotels and shopping centers it is vital that you ensure the tax assessment on your property is not exaggerated at your expense.
The reason property tax is receiving such 'bad reviews' and negativity is because of the high expense involved for commercial businesses. For example, in the year 1967 property owners in America paid approximately $27 billion in taxes. Today however this tax burden is much higher. The shocking fact is that an estimated $44 billion was spent, or nearly 63% higher. This is a particularly heavy price on the taxpayer who owns a property, perhaps a warehouse, in an area that is undergoing rapid growth and market value increases.
However one of the most misleading and striking characteristics of the property tax is its variable costs throughout Fulton County. The City of Atlanta tax rate is higher than the unincorporated Fulton County tax rate. The Alpharetta tax rate is different than the Roswell tax rate. In addition, real estate tax assessments are variable from one location to the next. This adds to the variability in tax burden and can create competitive advantages and disadvantages for commercial property owners.
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So how do I prepare my property tax appeal? Well first of all you need to be aware of how the tax assessors calculated the value. For commercial property owners and managers they may have taken a cost approach, a sales comparison approach, or perhaps an estimate of your income to establish your value. An income approach is normally utilized when the property type is typically rented. To calculate the income approach, you will need to find 3 things; (1) the market rental rate, (2) the typical expense ratio and finally, (3) the rate of capitalization. To estimate the value the potential rent is reduced by typical expenses and capitalized into a value estimate.
These 3 topics are the easiest and most effective in arguing that the assessor may be wrong in their income approach calculations. Perhaps they did not take into account the uniqueness of your property and why you have never had an expense ratio as low as what they are suggesting. Perhaps their rental estimate is high due to the condition of your property.
I usually recommend for those seeking to lower their tax assessment in Fulton County to select the Fulton County Board of Equalization as their second level of appeal. It is completely free of charge. This organization hears your arguments and the county appraiser's arguments and makes a decision on the tax assessment. It may take a long time because Fulton County has many property tax appeals every year and they are perpetually behind, but there is no way around that. Two other options are a Hearing Officer and Arbitration. For each of these options you will need a recent appraisal of the property, which for residential properties runs $300-$400, and for commercial properties several thousand dollars or more.
The Fulton County property tax can have a big effect on commercial business. It is paramount that you do your due diligence in assessing your own property value to ensure a fair valuation. If you need assistance in evaluating your probability of success in a Fulton County property tax appeal contact us. We provide free consultations.
