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Real Estate State & Local Tax Smart Tax Property Tax Tim Anderson Talk to an advisor: (816) 743-7700

Five Economic Factors Landlords Need to Consider in Property Tax Appeals

December 19, 2018

When paying the property tax bill, it usually makes sense for a tenant to be responsible for appealing a property tax assessment. But that’s not always a smart move if you’re a landlord.

Here are five economic factors to consider when it comes to tax appeals.

  1. Tenant Retention - Lower property taxes can make your property more attractive to potential investors or provide positioning to increase rental rates from new tenants. Buyers likely won’t pay as much for a vacant income-producing property as they would for an identical property that is fully leased at market rates.
  1. Vacant Space – Part of doing business is having tenants who choose not to renew their lease. During holding periods, owners of properties will feel the tax impact. An aggressive stance on property tax appeals can lower the cost of having vacant property.
  1. Tenant Improvements – More often than not, assessors include the cost of improvements made by the tenant in their valuation of leased properties. Trade fixtures can inflate the value more than the amount justified by the income of the property. Owners shouldn’t be burdened by having to pay taxes on tenant improvements.
  1. Relationship Goals – Successfully appealing property taxes on triple-net properties helps strengthen the relationship between landlord and tenant. Who doesn’t appreciate saving money on taxes? Especially when the reductions flow directly to the tenant’s bottom line.
  1. Competitive Edge– When owners win their property tax appeal, ultimately saving lessees money,  they can raise rental rates while keeping their tenants' occupancy cost at or below market at lease renewal time. This not only improves net profit margins but also maintains the owner’s ability to be competitive in the market.

 Business owners have 30 days to appeal from the postmarked date on the assessment notice. Here are the 2019 deadlines for business owners in the following counties:

  • Johnson County, Ks.: March 13th
  • Shawnee County, Ks.: March 22nd
  • Douglas County, Ks.: April 1st
  • Miami County, Ks.: April 1st
  • Sedgwick County, Ks. April 1st
  • Wyandotte County, Ks. April 1st

Jackson County, Missouri property owners will begin receiving commercial property tax assessments in the mail starting in early June.

Are you leaving significant tax savings on the table when it comes to your real estate and business personal property? Our professionals understand your business and how to maneuver through the regulatory obstacle course. Contact your MarksNelson Property Tax professional at 816-743-7700 or click the button below to schedule your FREE tax appeal consultation today.

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About THE AUTHOR
Tim specializes in real estate valuation, credits and incentives, and economic development counsel to companies of all sizes. He works with clients throughout the United States to help them reduce their State and Local Tax expenses, and leverage economic development tools. He provides key real ... >>> READ MORE
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