Five Economic Factors Landlords Need to Consider in Property Tax Appeals

April 2, 2020

There are big advantages to lowering your property tax bill, especially for landlords. And, with pending increased tenant vacancies, filing a property tax appeal will help support your bottom line. The time to file is now.

Here are five economic factors to consider when it comes to tax appeals.

  1. Tenant Retention - Lower property taxes can make your property more attractive to potential investors or provide positioning to increase rental rates from new tenants. Buyers likely won’t pay as much for a vacant income-producing property as they would for an identical property that is fully leased at market rates.
  1. Vacant Space – Part of doing business is having tenants who choose not to renew their lease. During holding periods, owners of properties will feel the tax impact. An aggressive stance on property tax appeals can lower the cost of having vacant property.
  1. Tenant Improvements – More often than not, assessors include the cost of improvements made by the tenant in their valuation of leased properties. Trade fixtures can inflate the value more than the amount justified by the income of the property. Owners shouldn’t be burdened by having to pay taxes on tenant improvements.
  1. Relationship Goals – Successfully appealing property taxes on triple-net properties helps strengthen the relationship between landlord and tenant. Who doesn’t appreciate saving money on taxes? Especially when the reductions flow directly to the tenant’s bottom line.
  1. Competitive Edge– When owners win their property tax appeal, ultimately saving lessees money,  they can raise rental rates while keeping their tenants' occupancy cost at or below market at lease renewal time. This not only improves net profit margins but also maintains the owner’s ability to be competitive in the market.

Are you leaving significant tax savings on the table when it comes to your real estate and business personal property? Our professionals understand your business and how to maneuver through the regulatory obstacle course. Contact your MarksNelson Property Tax professional at 816-743-7700 or click the button below to schedule your FREE tax appeal consultation today.


Tim Anderson is a key member of the real estate practice area at MarksNelson, leading the real estate valuation and commercial property tax appeal specialty groups. He partners with clients to secure credits and incentives, provide economic development guidance, and advise on state and local tax... >>> READ MORE

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