Every real estate professional has been confronted with one basic problem – the marketability (and mortgagability) of real estate. Real estate taxes do not represent “accounting money.” This is real money and it represents real cash flow.
Real estate taxes can be so high that they exceed even the carrying charges on the mortgage, especially in today’s current low interest rate conditions. What makes such taxes so troublesome to the real estate professional is that while they severely impair marketability, leasability and mortgagability, they add northing to the value of the property. Thus, even if mortgage and maintenance payments or environmental remediation costs are high, the incurring of these expenses add to the property or the owner’s equity in one fashion or the other. There is, however, no virtue in paying high real estate taxes. What, if anything, can the real estate professional do to deal with suffocatingly high taxes?
The answer is simple. Specific procedures can be followed to preserve the rights of the property owner (or whoever has an interest in the property) to reduce taxes and, in many instances, achieve a substantial refund for prior tax years. Reduction of real estate taxes can obviously make a property viable, but this article does not seek to either give legal advice or discuss the legalisms of each of the different procedures throughout the northeast region. Rather, its purpose is to stress the importance of making the real estate tax appeal an essential item in the professional’s arsenal.
Procedures are available in every state. Whatever state the property is located in, an appeal should not be attempted without the assistance of a professional who is fully familiar with the procedures involved. The procedures are time sensitive. Unless the appeal is filed within a specific period of time, rights are forfeited.
We cannot emphasize too strongly that a tax appeal is a matter which should not be “put off” to another day with the feeling that perhaps it can be filed at any time and the situation corrected. In most of the taxing jurisdictions throughout New York State, you typically have only a three or a four-week window in each and every year in which to file the necessary grievance and / or judicial proceeding. Failure to file will result in a complete loss of your rights for that tax year and there is no way that this error can be corrected.
Posted in: Tax Certiorari