Property tax for real estate and property
For an owner of rental property, property tax is one of the largest recurring costs and, under many leases, one that tenants reimburse. This page explains how a property tax review applies to real estate and property businesses. It is general information, not tax advice.
Why this matters for property owners
A local authority assesses each parcel, and the tax follows from that assessment. Assessors commonly rely on cost, market and income approaches to value. If the assessment is too high, you pay too much, and so may your tenants. If the assessment is too low, the difference can come back later. Either way, the figure rests on records about your property.
Real estate carries a second issue. Many leases pass tax to tenants. When an assessment falls after an appeal, the lease determines who benefits and whether tenants must be credited. An error in one place can become an error in the tenant billing.
What a review typically examines
A partner firm looks at the assessment, the property facts behind it and the way the tax was billed or recovered. The points specific to rental property include:
- Property record accuracy. Whether the authority has the right building area, use, age and parcel boundaries, and whether demolished or merged buildings are still listed.
- Income and expense data. Authorities often use an income approach for rental property. The review checks whether vacancy, concessions and operating costs are reflected fairly. Methods vary by jurisdiction.
- Recent sale or refinancing. Whether a transaction was used as evidence of value and whether the new figure is supported.
- New construction and improvements. Whether partly finished work was assessed as complete.
- Exemptions and classifications. Whether any program, such as a special class or abatement, that applies to your property is in place.
- Appeal deadlines. Whether a window to appeal is still open. One source describes 30 to 60 days after the notice, and each jurisdiction sets its own. [VERIFY: appeal deadline for your jurisdiction]
- Tenant recoveries. Whether amounts charged to tenants match the lease and the actual tax bill, including any refund shares.
Warning: Appeal deadlines can be short and are set by each authority. Check your assessment notice date as soon as you receive it.
What to have ready
- Assessment notices and tax bills for the years in scope.
- A rent roll and, if available, leases with tax recovery clauses.
- Operating statements showing income and expenses.
- Records of any recent purchase, sale or refinancing.
- Construction or renovation records.
- Prior appeal filings and outcomes.
- Contacts in accounting and asset management.
If you own through several entities, list which entity holds each parcel. Tax bills are often mailed to a prior owner, a lender or a management company, and a bill that never reaches the right person can cause an appeal window to be missed.
What happens after you submit a request
After you submit a request, a partner firm contacts you. You share records, and the firm reports its findings. If an appeal is suitable, you and the firm decide how to proceed. Terms and fees are set between you and the firm. Ask the firm early how it handles tenant pass-throughs after a change in the tax bill, so your leases and your records stay consistent.
How matching works
Fairview connects you with a partner firm. The firm does the work. Size decides which firm fits, and Fairview matches each request by hand rather than by a fixed cut-off. Use the larger business form, the smaller business form or the other form.
An independent partner firm that specializes in property tax handles this work. Fairview Audit makes the match. We do not perform the review ourselves.Who does the work
Frequently asked questions
Do tenants benefit if our assessment drops?
That depends on each lease. The firm will read your recovery clauses.
Can a review cover many parcels?
Yes. A portfolio can be reviewed, and scope is set with the firm.
Is this the same as hiring a tax attorney?
No. Fairview connects you with a partner firm. Ask the firm what it can and cannot do.
Related pages
Tell us what you need reviewed. We match you by hand with an independent partner firm. You keep your existing vendors.Find out what you are overpaying.