Possible Errors on Clayton Property Tax Assessments and their Solutions

Posted by Daniel Jones on Oct 30, 2019 9:13:00 AM

Multifamily property owners should be aware of the mistakes and their reasons made by the Clayton County Tax Assessor in the valuation of their real estate assets. By understanding these things, the property owners have the weapons necessary for their successful appeals against unfairly high Clayton property tax assessments. 

Clayton Property Tax Assessments

Simple Errors in the Records

The easiest way to find errors in assessment is a review of the information contained on the multifamily property’s card. The most common mistakes are the property’s total square footage, age, net leasable area, mix of units, number of units, and amenities.  Even a simple misstatement of information in one of these aspects can result in a significant increase in the Clayton property tax assessments.   

Recommended solution: Share current and accurate information about the multifamily property’s features including its dimensions, units, and amenities.  Provide the assessor’s office with supporting documents that demonstrate the property’s floor plans, among others. 

Failure to Consider Actual Performance

Yet another common error is the failure to consider the multifamily property’s actual economic performance, particularly in terms of rental and business revenue.  The discrepancy between the actual revenue received by the multifamily property owner and assessor’s estimate can result in significant differences in their expected assessments. 

While the owners usually determine their property’s market value based on the actual cash flow (e.g., rental fees and other business income), assessors use market-derived rent income and vacancy rates for their valuations.  The Clayton County property assessor will typically arrive at a higher valuation than the owners because of the oversight of the actual rental rate and vacancy rate. 

Recommended solution #1: Property owners must provide the assessor’s office with the present and prior years’ income statements and cash flow, especially when the numbers support a reduction in the valuation.  In-depth discussions about the unique and specific income and expense items may also be necessary, which will distinguish the multifamily property from its competitors.  The discussions will also show relevant trends in occupancy rates, rental rates, and expenses, which are crucial in the determination of the fair assessed value.   

Like many of their counterparts from around the United States, the Clayton County Tax Assessor will likely respond quicker to higher rental rates but move slower in offsetting increased expenses.  But with the sharp increases in operating costs, multifamily property owners are feeling the pinch from unfairly high property valuations. The need to make clear and forceful challenges to the valuation is then a must, if and when the property owner desires to unburden himself of the unfair final tax bill. 

Recommended solution #2: Delineate the costs related to making a unit ready for renter’s occupancy.  These occupancy-related costs are essential in the property’s income stream and, hence, must be considered as valid expenses.  This recommendation also applies to the costs for remodelling and renovating older units in the multifamily apartment. These costs are also related to making the units not only ready for occupancy but also competitive against newer units in other communities. 

Due to the substantial time, effort and expertise required in challenging the valuation of the Clayton County Tax Assessor, commercial property owners should ideally hire Fair Assessments, LLC for the Clayton property tax assessments appeal.

Topics: Clayton Property Tax Assessments

property tax appeals

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