Alert: City of Baltimore Engaging in "Reverse Assessment Appeals"

Written on August 08, 2016 at 12:00 PM

By Paul Shoup, Senior Managing Consultant, Washington D.C.

In the state of Maryland, properties are reassessed every three years (triennial) and assessments are phased in over the three-year cycle. Real estate assessment appeals can be filed subsequent to the issuance of a new notice of value at the beginning of a new cycle and, if successful, can impact all three years.  In addition, an appeal can be filed prior to January 1 in the 2nd and/or 3rd year of the cycle. 

The process includes a first level administrative appeal with the State Department of Assessments & Taxaztion (SDAT); followed by, if warranted, a second level appeal to Property Tax Assessment Appeals Board (PTAAB); and, if further warranted, a third level appeal to Tax Court.

In many areas across the country, some taxing jurisdictions have begun the process of filing what has become known as "reverse appeals," whereby the jurisdiction seeks an increase of a property assessment.  Working internally and with consultants, these jurisdictions will track property sales, property types (e.g. apartments), and other information to gauge potential opportunities to seek higher valuations and real estate tax revenues. It has become common practice in Pennsylvania for school districts to commence appeals against property owners seeking to increase assessments and tax revenue.

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Categories: Maryland, Real Property, Paradigm Info

Montgomery County Council Approves Biggest Property Tax Hike Since 2009

Written on May 26, 2016 at 04:58 PM

The Montgomery County (Maryland) Council gave final approval Thursday to a $5.3 billion budget that includes the biggest property tax hike in seven years. The budget, which takes effect July 1, includes a nearly 9 percent property tax increase, as well as an increase in recordation taxes. Council members dubbed its 2017 budget an “education first” initiative, and said that in return for the added tax burden, the county’s 156,000-student school system will receive an infusion of funds to help it meet a myriad of challenges.

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Categories: Maryland, Real Property

Proposed Montgomery County, MD Budget Has Biggest Property Tax Hike in Eight Years

Written on March 16, 2016 at 04:43 PM

As Montgomery County faces a fast-growing school system and lost revenue from last year’s Supreme Court ruling that Maryland’s income tax system was unconstitutional, a property tax increase has been proposed as the solution. Montgomery County Executive Isiah Leggett proposed a $5.2 billion operating budget for the fiscal year beginning July 1, which goes to the County Council for consideration, that would increase government spending by just under 2 percent. It lifts the property tax rate by 3.94 cents per $100 of assessed value, from 98.7 cents to $1.02.

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Categories: Maryland, Real Property

Office Investors Follow STEM Workers for Best Returns

Written on January 08, 2016 at 04:57 PM

All across the country, both companies and cities alike are competing to attract STEM-educated employees. STEM - which stands for science, technology, engineering and math - related fields are transforming the economy, and office building owners and investors wanting the best returns need to look no further.  Industries such as health care and energy, job markets where STEM dominates, are already driving growth. And as baby boomers begin to retire, the competition for STEM employees will only get fiercer. For example, almost 55 percent of the energy industry’s current workforce may retire over the next decade, affecting both the office and manufacturing sectors, according to a recent report from commercial real estate services firm JLL.

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Categories: Maryland, Pennsylvania, Office, Real Property, Colorado, Tennessee, Texas

Multifamily Rents Continue to Soar to New Heights

Written on August 12, 2015 at 12:09 PM

U.S. Apartment growth is not showing signs of moderating, according to the July 2015 edition of Matrix Monthly, a report on U.S. multifamily market trends in the 101 U.S. markets surveyed by real estate software developer Yardi. Apartment rents in the United States rose 6.5 percent year-over-year in July to a record $1,155, up 20 basis points from June and the highest rate of growth in the current market cycle. Technology-fueled markets in the Western U.S. continued to spearhead year-over-year growth, led by Portland (14.6 percent), Denver (13 percent) and San Francisco (9.8 percent). Although markets in the Midwest, Northeast and Mid-Atlantic continue to lag the rapidly-growing metros in the South and West, growth is strong across the board. Rents increased by less than 4% year-over-year in only five metros, and only three were below the national long-term average of 2.8%.

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Categories: Maryland, Pennsylvania, Minnesota, Washington, Georgia, Apartments, Colorado, Multi Family, Illinois, Virginia, California, Florida, Oregon

Commercial Property Taxes Drive Baltimore's Largest Revenue Increase Since the Great Recession

Written on April 02, 2015 at 08:26 AM

Baltimore's rebounding economy driving rising property tax revenues has Mayor Stephanie Rawlings-Blake proposing a bigger budget for 2016. The preliminary 2016 budget calls for $1.71 billion in general fund revenue, a 3.8 percent increase from 2015 levels. The year-over-year revenue increase is significant, as it is the largest the city has seen since the Great Recession. According to the Baltimore Business Journal, property tax revenue is a particular driving force, rising 9.2 percent to $72.3 million. Commercial tax revenue has outpaced residential taxes, and commercial properties saw the biggest percentage increases in value across the board. The city expects increased general fund revenue even though the Horseshoe Casino has sharply underperformed its expectations. Video lottery and table game proceeds were initially projected at $13.2 million, but monthly proceeds came in at under $700,000 through the first half of the 2015 fiscal year, budget documents said. The budget anticipates $9 million for the 2016 fiscal year and another $1 million going to a special school construction fund due to minimum payments built into the casino's lease agreement. Going forward, the city is still facing a general fund fiscal gap projected to accumulate to $612 million through 2022.

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Categories: Maryland, Real Property, Economy

15% Property Tax Hike Proposed for Prince George County, MD

Written on March 16, 2015 at 10:39 AM

In an effort to increase revenues for county schools, Prince George’s County Executive Rushern L. Baker III (D) proposed raising property tax rates for the first time in 35 years. He proposes raising the property tax rate from 96 cents per $100 of assessed value to $1.11 per $100 of assessed value — the highest rate in the region. According to the Washington Post, Baker’s proposal would fully fund a $1.9 billion spending request from the county schools chief that would significantly increase per-pupil spending in hopes of bridging the gap in academic performance between county students and those in neighboring jurisdictions. One key issue is whether Baker can circumvent a 1978 law that requires the county to get voter approval to raise property taxes. Baker says there is language in a 2012 school funding law that gives him authority to exceed the property tax cap to fund schools.

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Categories: Maryland, Real Property

Upcoming Deadline: Maryland Commercial Property Income and Expense Report

Written on February 06, 2015 at 06:53 AM

Assessment offices across the state of Maryland will soon be sending out Commercial Property Income & Expense requests to properties whose value exceeds $5 million. Each year, one-third of the properties in Maryland are reassessed, however all commercial property owners with income producing properties must turn in an Income & Expense form by May 15th. Failure to do so will result in a $100/day fine and up to 1% of the value of the property. For these filings to be accepted as evidence for future appeal work, they must be signed and dated by the property owner and turned in by the deadline. It is crucial that every allowable expense is reported, so be sure to review thoroughly before submission. To shorten the process for clients with multiple properties in the same county, property owners can sign this document one time for all of their properties in the county and attach 2014’s Income and Expense Report. For new clients, however, 3 years of Income and Expense information is required for the current appeal.

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Categories: Maryland, Real Property, Paradigm Info

Maryland Gov. Hogan Calls for Business Personal Property Tax Cut

Written on February 05, 2015 at 09:13 AM

After building his gubernatorial campaign around tax cuts and business issues, Maryland Gov. Larry Hogan used his first State of the State yesterday to address these issues, calling for millions of dollars in tax breaks. Hogan proposed cutting personal property taxes for small businesses, repealing stormwater management fees or the "rain tax" , eliminating automatic gas tax hikes and doing away with taxes on retiree income. If all tax cuts were enacted in the upcoming fiscal year, it would cost about $27 million, which the Hogan administration says could be paid for using a $47 million surplus under the governor's proposed budget.

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Categories: Maryland, Personal Property

Maryland Values Rise in New Property Assessments

Written on January 08, 2015 at 09:35 AM

Assessment notices have been issued to property owners across the state of Maryland and values have increased since 2011, reflecting a rebounding market. Commercial property values showed an overall average increase of 18.6% statewide. In Maryland, properties are reassessed once every three years. The properties currently being reassessed were last valued for the July 1, 2012 tax year. According to Maryland's Department of Assessments and Taxation, Montgomery County saw the largest increase in commercial values (34.4%), followed by Harford (14.7%), Baltimore City (14.4%), Anne Arundel (13.8%), Prince George's (13.8%), Howard (13.4%), Caroline (13%), Frederick (12.3%), Washington (11.8%), and Baltimore (10.3%).

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Categories: Maryland, Real Property

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