Tag Archives: property tax

A Cautionary Case for Tax-Exempt Hospitals

A case denying a hospital a property-tax exemption is a wake-up call for not-for-profit hospitals around the country.

hospitalA recent property tax case from the Tax Court of New Jersey should serve as a warning to tax-exempt medical centers and their tax advisers throughout the country. Although this case was specific to New Jersey, similar facts and laws exist in many other jurisdictions.

The court went to great lengths to describe the ways that not-for-profit hospitals have changed over the years. When the state laws exempting not-for-profit hospitals from taxation were drafted decades ago, most not-for-profit hospitals were “charitable alms houses providing free basic medical treatment to the infirm poor” (slip op. at 3). Today, hospitals have become sophisticated medical centers, providing a variety of medical and related services.

 

Read the whole article at: http://www.thetaxadviser.com/newsletters/2015/sep/cautionary-case-for-tax-exempt-hospitals.html

 

Can the assessor raise the assessed value when I file a property tax appeal?

We get this question a lot.

Nobody wants to get an increase in their assessed value after filing for a reduction. People want to know the risks involved in filing a property tax appeal.

Assuming you have nothing to hide, such as added square footage that was not permitted by the County Building Department, there is very little risk in filing a property tax appeal.

First of all, in California the assessor is prohibited from assessing your property above the “factored base value.” The factored base value is generally your purchase price, or value at the date of completion of construction, increased or decreased annually by inflation factors, but not more than 2% per year.

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My advice is to always file an appeal, because it can be withdrawn, and you have no risk of an increase, and at least an opportunity for a decrease. And my experience is that property reassessed with new base year values is generally not appraised by the assessor with the same care that will occur after an appeal. In other words, further scrupulous attention results in a different value, and usually it is less. So go for it.

How to achieve larger refunds and save property taxes forever!

Case study – How SSCPA helps our clients achieve larger refunds and save property taxes forever after “Base Year” transfers

We just resolved a case in Santa Clara County which was a reassessment after a transfer of a 50,000 square foot office building to a family LLC that was a greater-than-50% change of ownership.

The assessor initially valued the property at the time of transfer at $10,990,000, so we filed an appeal.  Once the hearing date was determined, we were assigned a different Santa Clara County appraiser who offered a reduction to $10,400,000.  He attempted to persuade us by suggesting this was a good deal because it represented a $590,000 reduction in assessed value.

However, we still thought the value should be lower, based on market rents, capitalization rates and vacancy issues, as well as recent sales of office buildings in the area.  We presented our full workup on the value to the county appraiser at $9,500,000 and he agreed to discuss it with his supervisor.

Accepted OfferAfter discussion, the assessor agreed to stipulate to a value of $9,600,000 and we accepted.  This is a good example of what can happen if you represent yourself and do not have a clear answer or valuation to present to the assessor – instead of countering with facts surrounding the property and market, most people would be happy to have achieved the $590,000 reduction.

However, our representation resulted in a reduction of $1,390,000, an additional $800,000 reduction compared to the first offer.  This reduction is permanent under California Proposition 13, which requires that a new “base year” value is established upon transfer, and the assessed value cannot be increased in future years above an inflation factor (no more than 2% per year).   This means that the additional reduction that we achieved will save the family LLC a minimum of $9,000 per year for as long as it owns the property.  Our fee is a percentage of the savings for 2 years.  Not a bad deal.

Base year transfers occur when there is a sale, a transfer of ownership of more than 50%, or when there is new construction.  These new assessed values should always be reviewed.

Own commercial property in California?
Have a property tax appeal in progress?
Don’t settle without speaking to us first. Call us for a free property assessment today.

How we help attorneys with property tax matters in California:

Shannon & Snyder CPAs are the go-to experts for property tax matters in California.

Generally, ownership changes of more than 50% cause properties to be reassessed at market value as of the date of change of ownership. This often occurs when estate planning attorneys advise their clients to transfer properties to trust or family partnerships. Likewise, property transfers after a death are subject to reassessment.

The Santa Clara County Assessor frequently values reassessments aggressively high. That’s where we come in.

We get frequent referrals from attorneys who think their clients are better served if we handle appeals of these new values because we specialize in property tax appeals and normally charge a contingent fee.

Shannon & Snyder Property Tax Experts

Partnering with Shannon & Snyder CPAs is good for your firm and great for your clients.

Attorneys have told us that it just doesn’t make sense for them to charge their hourly rates in an area that is not their specialty and may not result in the desired outcome.

Because of our experience with hundreds of appeals, we are familiar with the County appraisers, property tax transfer units and Assessment Appeals Boards.

Acting as agent for property owners, we take over the entire process and aggressively advocate for fair valuations. Your clients are in great hands with Shannon & Snyder CPAs.

If you are a practicing attorney in California, I invite you to contact me directly to see if we are a good fit to help your firm offer your clients the highest level of property tax assistance and the best results. 

Bill Snyder CPA
Shannon & Snyder CPAs