Both commercial property owners and businesses leasing commercial facilities may be legally or contractually responsible for property taxes. Some types of commercial leases pass responsibility for property taxes to tenants. Otherwise, the party that owns the property is responsible for paying annual property taxes.
The amount of tax owed depends in no small part on the assessed value of the property. What the state determines the property is worth plays a major role in calculating the taxes owed. What rights do property owners and business executives have when the assessed value for a property increases rapidly due to inflation or market fluctuations?
Owners can appeal their assessment
County authorities set the taxable value for a property by establishing an assessed value for the property. The assessment process may involve a cursory inspection of the property, often conducted as a drive-by. Other times, assessors depend on public records, including information about the commercial property and details about other recent transactions for similar properties in the area.
The assessed value of a property can increase rapidly in cases where local property values soar. Businesses may then struggle to cover property tax obligations, putting them at risk of falling behind.
In cases where a dramatic increase in the assessed value for a property makes tax obligations problematic, it may be possible to challenge the change in the property’s assessed value. Direct negotiations with local authorities can sometimes result in a revised assessed value for the property. Other times, a formal appeal might be necessary.
An attorney familiar with property tax assessment appeals and other aspects of real estate law can help commercial property owners protect their investments. For starters, reviewing an assessment and comparing it to the prior year can help people determine if an increase in assessed value may be unreasonable.