The Swartz Report: Royals All Star Game, Several HOT Sectors, Mind Your Property Valuations

Post written by Donald Swartz, President and Principal at Swartz + Associates, Inc. | Lover of Chiefs, Royals and golf | Avid “Cruiser” | Poker Enthusiast

As the Major League Baseball All Star Game took center stage in the baseball world (Congrats to the American League for winning and securing home field advantage in the World Series….and congrats to our SEVEN Royals All Stars!), it symbolizes the “halfway” point in the season.

This time also represents the “halfway” point in the world I live and work in….the property tax world. For the most part, the compliance season for filing business personal property statements has finished.

Many states have completed their informal appeals cycle and, in some jurisdictions, tax rolls are being certified and tax bills are beginning to be processed.

Now it’s time to take a breath and get ready for the second half. It should be a busy one.

WHAT’S NEW

With several states going through the re-assessment cycle and the first round of appeals completed, our company is gearing up for the next level of appeals…formal hearings with local Boards of Equalization as well as the scheduling of dockets for appeals to the State level. So what does this mean?  We’ll be spending a lot of time with appraisers and attorneys to determine the best and most productive methods to assist our clients.

Several sectors of the commercial real estate market are hot…REALLY hot. 

Warehousing, convenience stores, multi-family, hotels… pick a property type and chances are the values are increasing. There’s a significant amount of money entering these (and other) markets from an investment standpoint. When this occurs, capitalization rates are lower (the rate of return an investor seeks on his/her investment) and, as a result, values increase.

The county appraiser’s offices are aware of this as well and we are seeing increases in property tax values in most geographic areas.

WHAT TO DO, WHAT TO DO?

It’s important taxpayers pay attention to the valuation notices received. Missing the opportunity to protest an increased value may cause an increase in annual properties until the next appeal period occurs. In some situations, even that’s not enough. As one example, here’s a link to an article in Crain’s Chicago Business (you’ll need to subscribe to read the full article) concerning potential increases in taxes for owners of real estate in Cook County, IL.

Diligence in keeping your valuation in line may not be enough. As the article points out, an increase in the tax rate and/or county multiplier can generate more tax dollars (in this particular article up to 30%!) for the county even if the valuation of the property remains constant. Imagine the compounded heartache if the valuation increases as well. Talk about a double whammy!!

AND FINALLY…

Let’s all hope for a a strong second half of the baseball season for our Kansas City Royals! And at Swartz + Associates we’re looking forward to a strong second half to the 2015 property tax season.