The future outlook for Boston, Massachusetts construction crews does not look bright as developers are struggling to fill the 6.7 million square feet of new office space that has hit the local market since 2004. According to the Boston Business Journal, about a third of that office space remains vacant, with certain developments and submarkets experiencing up to 70% vacancy rates for space constructed over the past seven years.
Close to 14,000 Gwinnett County, Georgia businesses have received the wrong property tax assessments due to a printing error, causing the deadline to file an appeal to be extended. The county's Board of Tax Assessors became aware of the error when calls poured in this week from businesses that the notices sent out on March 25th were incorrect. New notices to the 13,944 businesses that were affected will go out on April 6th with the deadline to appeal the notices being pushed back to May 23rd.
Business owners and suppliers across the nation have been generally upbeat in the recent months about the economy improving, especially for manufacturers. That sentiment it seems has come to a standstill as national and regional experts have become surprisingly downbeat. While the residential and commercial real estate markets are still considered in a slump, leading economic indicators such as employment have been looking up until this week.
At the close of 2010, Michigan signed into law the Michigan Venture Tax Credit which may be used only against the Michigan Income Tax and is available for investments made in 2011 and 2012. The credit equals 25% of an investor's qualified investment in a qualified business, meaning an investment of at least $20,000 made alongside or through a seed venture capital or angel investor group that is registered with the Michigan Strategic Fund.
Chapter 59, Section 38D of the Massachusetts General Laws gives Massachusetts assessors the right to request physical and financial property information to assist them in developing valuation techniques for the next fiscal year. It is at the assessor's discretion whether or not, and when, you will receive a request. Most jurisdictions mail the requests late February or March to the address to which the tax bill is sent. Responses are due sixty days after the request date.
Recent decreases in state and local government is causing less demand for office space, which is in turn slowing down the recovery of the commercial real estate market. According to The Wall Street Journal, as cash-strapped governments move to cut back on office space, office markets in Washington DC and elsewhere are starting to see the impact of a very difficult fiscal situation in the government trickling down to decisions being made for leasing.
A new research study by ChainLinks Retail Advisors shows that the healthiest retail cities in the United States are mostly comprised of the usual major markets. Washington, DC topped the list followed by San Francisco, New York City, Boston, San Diego, San Jose, Baltimore, Philadelphia, Seattle and Pittsburgh. The report sees overall retail growth across the country in 2011 with forecasts of annual sales to grow 5.1%, the largest increase in four years.
Many of the largest commercial property owners in Westchester, New York are challenging municipalities' property assessments in a move to lower their tax bills and boost their bottom lines. Thousands of properties across the Westchester have appealed their assessments this year due to the distressed economy and real estate market. While community representatives are claiming that these property owners are decimating their cities funds, the property owners are saying they are merely trying to pay no more than their fair share in taxes.
Recent analysis is showing the net operating income of the average U.S. hotel is expected to rise 10.9% this year, leading the major brands to exert more pressure on hotel owners to complete property improvement plans (PIPs). According to the National Real Estate Investor, the recession that occurred in 2009 and 2010 caused most renovations to be put on hold as the industry was doubling down on expense control. Now that the economy is showing sustained, but modest growth, hoteliers must deal with the deferred maintenance.
California assessors have historically stood firmly behind the "Rushmore" method of deducting business enterprise values and intangibles from hospitality property purchase prices. Traditionally their position has been supported by the local boards of equalization, but taxpayers have been challenged to take the questioning of this method to the courts. The case regarding the Glendale, California Hilton Intangibles is in that exact process with no resolution in sight.
Paradigm Tax Group recently completed an analysis of more than 17,000 office, retail, hospitality, industrial, and special-use properties in St. Louis County to determine if their appraised value reductions for property tax purposes had mirrored overall market valuation trends between the peak of the market in 2007 and the end of 2010. Our analysis found that:
In 2009, with unemployment and domestic product dropping sharply, real estate values had plummeted from their 2006 highs, putting the housing market in crisis and leading many to believe the commercial real estate market was to follow. According to The New York Times Economix Blog, predictions of 700+ banks failing due to their exposure to commercial real estate meant that a crisis in the sector was looming. But none of these predictions took into account how the supply situation in commercial real estate was drastically different than that of housing.
In 2011, assessors in Mecklenburg County, North Carolina are using a new approach towards commercial property values that includes how much income the properties can generate - a calculation they hope will better pinpoint values in an up-and-down market. According to the Charlotte Observer, county officials are in the process of mailing out 25,600 tax value notices to commercial property owners while at the same time mailing out delayed condominium tax values to 27,000 owners.
Most Texas appraisal districts have mailed out the 2011 Business Personal Property Renditions Forms for the 2011 Tax Year. Renditions must be received by April 15th to avoid a 10 percent penalty. A 30 day extension may be granted to May 15th if a written request is received on or before April 15th. Being that May 15th falls on a Sunday, that deadline will be extended to May 16th.
The Michigan Court of Appeals has rejected the city of St. Clair's argument on a recent manufacturing personal property appeal that the methodology of the petitioner's expert witness was flawed and violated statutory restrictions and affirmed the Michigan Tax Tribunal decision.
Florida Senate and House lawmakers have filed joint bills to reduce the limitations on increases to non-homestead (real property) assessments from 10% to 3%. According to the Florida Association of Counties website the House version of the bill (HB 381) has already been passed by the House Finance and Tax Committee and is slated to be heard next by the House Committee and Military Affairs Committee. The Senate version (SB 658) has yet to be placed on its first of four committees of reference, Senate Community Affairs.
In the past, it was not unheard of for an unauthorized property tax agent to work in the State of Texas without being penalized for non-compliance under Section 1152.151 of the Texas Occupation Code. Section 1152.151 states that a person may not perform property tax consulting services for compensation unless they hold a certificate of registration under the Texas Department of Licensing and Regulation (TDLR) as a property tax consultant.
Many shopping center landlords operating on thin margins can find that property tax savings via an aggressive appeal of their assessments may tip the balance sheet towards profitability. According to Shopping Centers Today (SCT), property taxes are usually the largest expense of any real estate related firm, but only 25-30% of owners appeal them. Assessors are now starting to base values on actual income and such variables as lease expirations. This can be a big factor in getting significant reductions as long as property owners take the lead and factor in such expenses as lost or departing tenants, renegotiated leases, rent concessions and tenant improvements dollars.
After his office discovered several errors in the State Tax Equalization Board’s (STEB) 2008 revised property values, Pennsylvania Auditor General Jack Wagner announced that subsequent reports and the impact on government aid and property taxes have been brought into question.
The Georgia Association of Property Tax Professionals (GAPTP) reports that South Carolina is once again attempting to fix Act 388 of the State's Assessable Transfer of Interest (ATI) law. The controversial House Bill (H. 3713) introduces a rollback valuation feature in lieu of refunds, while Senate Bill (S. 229) cannot increase property values until the next reassessment year, then limit any increase to 15%. While the two bills represent another effort by South Carolina's law makers to rectify some of the negative property valuation issues that have been associated with the original ATI legislation, both may significantly impact the accuracy of property values for tax purposes and both could have a major impact on the state.
The Iowa Property Assessment Appeal Board (PAAB) will begin receiving 2011 appeals in May, after the local board of review has issued their final determinations. The deadline to file on a board of review determination is 20 days after adjournment, and due to the increasing trend in appeal volume, decisions for some appeals can take up to 18 months.
Health Care REIT owners are trending towards taking on increased risk by assuming a role in the operations of the medical facilities they own. According to The Wall Street Journal, the change in strategy, which has fueled many recent mergers and acquisitions among owners of medical offices and senior housing, is partly a result of the federal law passed in 2008 which made it easier for landlords of health care facilities to establish taxable subsidiaries to oversee the management of operations.
The Hillsborough County, Florida Property Appraiser has recently filed suit to challenge two separate Value Adjustment Board (VAB) rules that deal with evidence between petitioners and county assessors. The suit seeks to exclude petitioners from filing evidence at an administrative or judicial hearing where the petitioner has not first provided such evidence to the county assessor upon request during the appraisal process. The current rule gives the petitioner the option to enter into evidence exchange with county assessors during the appraisal development process, but still allows a petitioner to present evidence for consideration by the VAB or Special Magistrate if the petitioner has not previously provided such information to the county assessor.