When it comes to managing your property taxes, the first step is understanding what they’re all about. By definition, property tax is a real estate ad-valorem tax, calculated by a local government and paid by the owner of the property. The tax is usually based on the value of the owned property and is used by the local governing body to fund numerous necessary governmental operations.
Here, we’ve compiled a list of FAQs about property taxes to help clarify how they’re calculated, why property taxes change, and how you can better manage them for your business or bank branch.
FAQs About Property Taxes
How much is property tax, and how is it calculated?
The cost of property taxes varies from state to state and is dependent upon several factors including the assessed land value, structures on the property, improvements made to the land and/or structures, and the local government’s tax rate.
How often does property tax change?
Every one to five years, tax assessors will value the property and bill the owner a rate that follows the standards set by the taxing authority. Changes in the assessed value may be contributed to the following: economic factors that affect the fair market value, including the inflation rate, interest rates, and current housing market; improvements to the property; and an increase or decrease in the millage rates that are determined by the needs of the county and/or city general funds.
It’s important to review your annual tax assessment carefully. If you notice a significant uptick year over year, you may have grounds to appeal your assessment and ultimately lower your tax payment.
Can I lower my property tax payment?
If your annual assessment seems to increase significantly year after year, it is possible to lower your bill by filing a property tax appeal. Property tax bills are not necessarily a fixed cost. Properties are not always assessed correctly, and their values can change over time. For banks, appealing your bank branch property taxes can ultimately lower operating costs and subsequently lower your non-interest expense. For commercial property owners, a successful appeal can cut costs and improve cash flow.
To learn more about the appeal process, click here.
Are property taxes considered a deductible expense?
Like many business costs, property taxes are considered a deductible expense. While property taxes are considered deductible, there are, of course, some limitations and restrictions when it comes to this expense. For one, you can only deduct the portion of your property tax that is levied based on the assessed value. To learn more about what qualifies as a deductible expense, please read our article about increasing returns by deducting your property tax expense.
How can I manage my bank branch or commercial property taxes?
Unsure if your property tax qualifies as a deductible expense? Need help understanding your property tax assessment? Want to file a property tax appeal? Hiring a third-party service, like MountainSeed, to manage your commercial property tax needs can help save you time and money across the board.
MountainSeed’s Commercial Property and Bank Branch Tax Appeal Business is a risk-free solution that was designed to help businesses and bank branches mitigate the hassles associated with property tax appeals. Our team has extensive experience in property tax appeal scenarios and is led by an individual who oversaw a large metropolitan area’s tax assessment division for 30+ years. We also have full-time staff located throughout the country with clients located in each state. Our operational team has a multiple asset class understanding, which helps us build the correct case when going through the appeal process.
Ready to get started? Contact us today to learn how MountainSeed can assist with your property tax needs.