The deadline for San Jose, California high-rise developers to obtain a certificate of occupancy in order to qualify for an incentive program that will cut fees has been extended to August 31, 2016. According to the Silicon Valley Business Journal, in addition to cutting construction taxes for qualified San Jose high-rise projects in half, the incentives reduce park fees, eliminate requirements for fire-control systems and guarantee that application review will take less than 120 days.
Knoxville, Tennessee area businesses who fail to fill out and return a detailed personal property form by March 1 will face a number of penalties. According to knoxnews.com, personal property, which includes furniture, computers and equipment, accounts for more than $20 million in revenue each year in combined city and county taxes. Businesses operating during 2012 that miss the deadline will be addressed a 25% penalty of the value and lose their right to appeal values at the Board of Equalization.
Last week, the City of Philadelphia, Pennsylvania mailed out assessment values to all property owners within the city limits. The valuations are expected to be effective for the 2014 tax year. The mailings signal the next phase of the city’s ongoing AVI (Actual Value Initiative). Data collection and valuation has been underway for nearly three years and this is the first citywide reassessment in more than 30 years.
Gradual economic improvement and job creation are allowing all sectors of commercial real estate to slowly recover after being hit hard by the recession. According to the National Association of Realtors' Commercial Real Estate Outlook, the bright spot in the industry continues to be multi-family as pricing for the ten markets in the prime multi-family index have regained pre-recession peak levels due to the high investor interest in the sector.
Despite the unanimous backing of legislative attempts to relieve business personal property taxes for businesses who are threatening to leave Colorado, two more such measures have recently fell by the wayside. According to the Denver Business Journal, of the five bills introduced this session to reduce the burden of the much hated tax, four are now dead, despite acknowledgements even from many opponents of the bills who have admitted that the state needs what they are proposing.
Several circumstances could cause real estate investors to face a higher tax burden in the coming years. However, the prospect of paying the additional taxes is not likely to impact the transaction habits of those interested in commercial real estate investments. According to RE Business Online, taxes aren't what's been motivating commercial real estate investors that have been in the asset class in the post-recession period, they like the durable income over time.
In the world of ad valorem taxes—a tax based on the assessed value of real estate or personal property—the crux of appeal issues is the determination of fair-market value. Everyone has an opinion, from the assessor to the taxpayer. Generally, these opinions are far from each other. This situation often necessitates the taxpayer having to pay a third-party appraiser for an opinion, which can be viewed as impartial and, with hope, more reliable.
Philadelphia, Pennsylvania Mayor Michael Nutter's proposed tax reform for next year could lead to the 10 biggest commercial taxpayers in the area paying about 45% less in property taxes. According to Philly.com, the reform is designed to base taxes on the properties' actual value rather than on outdated figures used for years by the city. Commercial properties in the city have been assessed on values closer to real market value than most residential properties, meaning commercial property owners have been paying more than their fair share in taxes.
Last year, U.S. commercial real estate experienced its highest sales total since 2004 with nearly $64 billion. According to the CoStar Group, the 2012 recovery in commercial real estate pricing rippled beyond the apartment market into office, industrial and even retail property, to a greater or lesser extent. A big contributor to the solid increase in prices was the fact that distressed property sales fell to 11.5%, the lowest level since late 2008.
A variety of taxing jurisdictions in Georgia, Tennessee and North Carolina have recently announced upcoming activity relevant to values in their respective counties.
The traditional factors that may point out a good apartment investment can sometimes lead even the most diligent investors down the wrong path. Such fundamentals as single-digit vacancy rates and double-digit rental rate growth may lead to good investments today, but can end up lacking when it comes to future growth. In addition, if you simply invest in only the historically well-performing coastal markets, you end up in competition with every other investor while paying cap rates below 4% on assets with little to no upside.
Property Values for the 2014 tax year in the state of Arizona will continue to be released throughout the remainder of the month. Specifically, Pima County has already mailed out their values, and Maricopa County is slated to send theirs out on February 22nd. Property owners have sixty days to file an appeal from the date the value was mailed.
New York City tourists will soon find more affordable hotel options in the nation's most expensive hotel city. According to USA Today, starting next month, brands like Best Western will be up and running selling rooms at about $160 a night before tax, considerably less than the $300 a night average across the city. These hotels are part of Manhattan's midprice-hotel building boom, which has been taking off as the recession fades, rates climb, and developers find it easier to get construction financing.
Although commercial real estate in St. Louis, Missouri has remained stable, Assessors still expect to reduce values on most properties. According to the St. Louis Post-Dispatch, a recent estimate of the region's commercial rates found that they had bottomed out at $17.40 a square foot. And while new construction remains almost non-existent, vacancy rates are down and the amount of occupied space is up.
Following the recent elections for Property Appraiser in Florida, there have been a number of positive and negative changes for the business community. An apparently positive development would be the new PA in Miami-Dade. Carlos Lopez-Cantera has expressed an interest in settling outstanding court cases and bringing Miami-Dade into parity with the rest of the state in terms of completing appeals timely. This is in contrast to the historic delays that have property tax consultants working 2011 appeals in 2013.
As investors actively seek out real estate that is performing better than bonds, single-tenant retail sales have soared to a six year high. According to Bloomberg, acquisitions of companies that own single-tenant buildings are rising as landlords seek a more diverse mix of renters and lower risk. These triple-net-lease landlords are able to rent to chains under multi-year agreements, with tenants paying property expenses. Such agreements often have rent increases built in over their lifespan.
A new proposed California bill would allow school districts to impose different tax rates on residential and commercial properties. According to EdSource, bill AB 59 would nullify a state Appeals Court ruling in December overturning an Alameda Unified School District parcel tax that levied one rate for residential and small commercial properties, and another for larger commercial properties. Parcel taxes have to date been a flat tax imposed on every real estate parcel regardless of its size or use.
The Tax Foundation, a non-profit research group that is dedicated to educate taxpayers about tax policy and burden, has complied a ranking of all 50 states regarding solely their respective tax issues. The study statistics include property taxes, corporate taxes, individual income taxes, sales taxes, and unemployment insurance taxes. The premise behind the study was that taxes do make a difference as to where a company will locate, and that states do change tax policies to attract business.