Property Tax

Property Taxes & Your Branch: What You Need To Know

By January 22, 2020 No Comments
loan participations

There are many advantages to owning your bank branches. But one less talked about but important negative implications can be the increase in property taxes within most of the municipalities throughout the U.S. At MountainSeed, we’re here to help so you can worry less about your branch’s bottom line.

So, should you appeal your property taxes?

Let’s start with the basics.

Property taxes are a significant cost of owning real estate. The typical property owner could have to pay as much as $10,000 to $40,000 annually on a piece of real property valued at $1,000,000. Based on ad valorem (meaning “by value”), property taxes increase in-step with the assessment of the property. The goal for these assessments is to reflect the actual fair market value or the price that would be paid in a voluntary sale. To calculate this cost, the fair market value is multiplied by the effective tax rate.

In theory, this formula sounds foolproof. In reality, about 60 percent of properties are overvalued — and Banks are paying for it. Tax rates can’t be appealed, but property taxes can be. So why do only five percent of Banks appeal their property tax assessments each year? You just don’t know what you don’t know. Fortunately, MountainSeed can help.

Yes, you can appeal property taxes.

It’s a common misconception that property taxes are fixed. If the amount you owe seems off, you may benefit from appealing your property taxes.

Here’s what you should know:

  1. If your bank has never appealed your branch’s or OREO property taxes, there’s a high probability that you’re significantly overpaying.
  2. Many tax assessment offices have historically overvalued niche or specialty real estate assets especially ones like Bank branches where there is only one highest and best use.
  3. Appealing your property taxes is an effective way to increase profitability. Lowering your property tax expense by 10% or more will have a meaningful impact on annual cash flow.

What should you expect?

Each appeal is unique, and the process varies by jurisdiction. However, this basic information will give you a good idea of how the process typically works. Remember, MountainSeed has built a process to increase the likelihood of going through a successful appeal.

Grounds for filing a property tax appeal:

  • Overvaluation
  • Uniformity
  • Error in fact
  • Misclassification

Stages of administrative appeals:

  • Informal meeting with the assessor
  • Board of equalization hearing
  • Superior court/litigation


Think you’re eligible to appeal your property taxes? Hiring a tax expert is the first step.

MountainSeed makes appeals simple.

Our knowledgeable, experienced team is here to help you appeal property taxes. When you hire MountainSeed to assist with your appeals, you can feel confident that you’re preparing yourself for the best possible outcome.

During your appeal, we’ll help you:

  1. Review the annual notice of your property tax assessment.
  2. Evaluate comparables in the area and determine the best methodology to arrive at a fair market value.
  3. Complete the required appeal forms and submit them to the county assessor’s office.

It pays to have an expert by your side.

The more you know, the better chance you have of desirable results. Our team stays up-to-date with changing property tax laws and knows which rules and procedures apply to your specific case. For example, appeals must typically be filed within 30 to 60 days — but some windows can be as short as 10 days, depending on the jurisdiction. By working with a trusted team, you can stay ahead of unexpected hurdles.

In addition to in-depth industry knowledge, our team has strong relationships with influential members of the community. When you work with us, you benefit from these relationships as well.

How are other banks doing in today’s market?

It’s no secret that brick-and-mortar bank branches are closing left and right. Customers are increasingly choosing ATMs, online banking, and mobile apps over their local branch. The volume of bank branch transactions have been declining six to seven percent per year, and some research even predicts that there could be a 40 to 50 percent decline over the next decade. JLL predicts a 20 percent reduction in U.S. bank branches over the next five years — if that becomes a reality, America will lose about 18,000 branches.

But physical locations still play a vital role in serving customers and generating new business. In fact, 80% of all consumers prefer to walk into a physical branch to set up a new account.

So, how can you set your branch up for success?

First, consider appealing your property taxes. If you think you might be eligible, it’s worth a conversation with our team. Second, think about ways you can maximize your property. Some owners have generated income by subdividing their space, then leasing it to other businesses. As well, our team has seen community banks double as meeting and event spaces for local businesses and community groups.

Even in today’s changing landscape, you can protect your business and get what you deserve. Talk to our team to learn more today.