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Property Tax Resources

Jan
27

Start That Property Tax Review Today

"First compare your 2010 value to what you think the fair market value should be."

By Raymond Gray, Esq., as published by Commercial Property Executive Blog - January 2011

It may seem odd to be thinking about commercial property tax appeals in January. Yet now is the best time to begin, particularly in Texas, which has an annual reassessment cycle and where the system works quickly and rewards those who prepare early. No matter where you are, however, advance preparation will usually pay off.

First compare your 2010 value to what you think the fair market value should be. This will give you an idea of what to expect for 2011. Review appraisal district records and determine whether assessors are using the income, cost, or sales comparison approach to value.

Follow these key points to keep your review on target.

Seven Simple Steps:

  1. Know the deadlines for administrative appeals, litigation and payment of taxes.
  2. Verify that the taxing records for your property are correct (square footage, net rentable, classification, zoning, etc.)
  3. Diligently reconstruct the income and expense statement to remove non-realty income. This will insure that non-taxable intangible assets, such as business value, are not part of your taxable value.
  4. Do not assume that the purchase price is equal to property tax value, whether for a new acquisition, or when reviewing the assessor's comparable sales.
  5. Determine whether your property is being taxed fairly in comparison to the competition. Newly purchased or recently constructed properties often are taxed at a higher value than the competition.
  6. Consider whether your annual operating statement reflects the market as of the valuation date. Most states value property as of a certain date.
  7. Consistently review the performance of your property tax consultant.

The sooner this work is completed the more options you will have available. Start now and you have the time to hire the right tax counsel — and they'll have the time to do a great job.

RaymondGray154x231pxRGray Raymond Gray is a partner with the Austin, Texas, law firm of Popp, Gray & Hutcheson L.L.P., which focuses on property tax disputes and is the Texas member of the American Property Tax Counsel. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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Dec
07

New Opportunity for Hotel Property Tax Reductions

"In 2001, the Appraisal Institute developed Course 800, to provide the theoretical and analytical framework for separating the tangible and intangible assets of operating properties."

By Raymond Gray, Esq., as published by Hotel News Resource, December 7th, 2007

Disputes over hotel property taxes continue to mount all across the country and basically for one reason. Taxing authorities attempt to include both the real estate and the non-real estate values in developing their tax assessments when the law states that property taxes can be levied against only the real estate.

The appraisal profession established standards requiring that real estate must be separated from non-real estate interests for valuation purposes. Although the message is abundantly clear, the separation and measurement of the value of the tangible and intangible assets of operating properties, such as hotels, has been a challenge.

In 2001, the Appraisal Institute developed Course 800, to provide the theoretical and analytical framework for separating the tangible and intangible assets of operating properties. In 2005, Course 800 was slated for updating by the Institute and should have returned to the Institute education schedule in short order.

However, it appears that the course was lost in the rush to redevelop the entire Appraisal Institute curriculum due to the significant change in required hours for licensing and certification mandated by the Appraisal Foundation. Thus, the course was not offered by the Institute, leading a number of taxing jurisdictions and their experts to claim that Course 800 had been repudiated by the Institute and that the principles of the course were inapplicable to hotel valuation. The key underlying principles included economic and business value concepts such as:

  1. Defining and describing the 'total assets of the business' as distinguished from the 'going concern' concept,
  2. Providing a methodology to segregate and value individual income streams associated with a business enterprise, and
  3. Defining and describing the concept of 'capitalized economic profit'.

The Appraisal Institute has recently contracted with several members of the original development team, plus a couple of new contributors, to update Course 800. The preliminary outline suggests much of the original content will be incorporated in the update, especially the economic principles and business value concepts. There will be more real property case studies - highlighting the fact that this is not a 'hotel valuation course', but a course on valuing each of the value components of an operating property. The new course, anticipated to hit the market in mid-to-late 2008, is likely to take the form of a two-day seminar.

Hotel owners and managers will benefit greatly from the 'new Course 800'. As the appraising and assessing community become better educated on the principles espoused in this updated course, property owners and managers will find even greater success in appealing tax valuations that include anything other than tangible property.

raymondgray154x231pxRaymond Gray is a partner with the Austin, Texas law firm of Popp, Gray & Hutcheson. The firm devotes its practice to the representation of taxpayers in property tax disputes and is the Texas member of the American Property Tax Counsel (APTC), the national affiliation of property tax attorneys. Mr. Gray can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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