The commercial real estate market is facing unprecedented challenges related to the COVID-19 pandemic. Among these challenges, property tax burdens have become a point of particular interest for real estate owners.
Property Tax Payments
Payments are due or becoming due in many jurisdictions throughout the U.S. Thankfully, many jurisdictions are putting emergency measures in place to help property owners including delayed payment due dates or the waiver of penalties for payments made late. You can find a summary of announcements made by counties here
How payments are to be made in a COVID-19 world is also a consideration. Although nearly all government offices are closed, most jurisdictions are still receiving payments through the mail or online. It will be important to check your local jurisdiction for specifics.
Property Tax Notice and Appeal Deadlines
Property tax assessment notices are issued in many jurisdictions often with brief time periods to file assessments appeals. Many jurisdictions are pushing back the notice issue date and the appeal deadlines as an accommodation to property owners. This will enable property owners additional time to consider whether an appeal is warranted.
Property Tax Values
In nearly all U.S. jurisdictions, values are set by county/city appraisers/assessors as of January 1 of the valuation year. Since the COVID-19 pandemic began affecting the U.S. economy and real estate markets after January 1, 2020, will county assessors/appraisers consider the impact that the outbreak is having on real estate currently? Some states have provisions in their statutes that address “significant events” that may allow counties to consider post-January events. For all others, we are hopeful that counties will be reasonable when property owners bring their current property performance appeals for their consideration. Some jurisdictions are planning on adjustments to values as Cook County has recently
Personal Property Audits
As taxing jurisdictions feel the impact of property tax delinquencies, a reduction in sales tax revenue, and the impact on government from reduced economic activity, assessment authorities may feel pressured to ramp up personal property audit activity. Audit authority extends many years into the past and carries onerous penalties and interest for escaped assessments.
Property Tax Legislation and Advocacy
As the impact of the COVID-19 outbreak on the U.S. occurred largely after January 1, it may take legislation assistance from counties to allow property owners to reduce values to a more appropriate value considering the current economic environment. Limitations related to state legislatures to be able to meet or established other priorities may prevent them from addressing the property tax need of commercial property owners.
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