If you’re an owner, occupier, or manager of a real estate portfolio, you know how important it is to appeal your property tax assessments. However, if you’re relying on spreadsheets and manual processes to analyze your assessment data, you likely won’t have time to review it all. By making this process more efficient, you may identify more opportunities, which could translate to a 10 to 15% increase in your tax savings.
A report from the International Property Tax Institute (IPTI) showed that less than half of North American firms regularly reviewed their assessments to identify appeal opportunities, while 39% said they lacked normalized property tax data, inhibiting them from making strategic appeal decisions.
Fortunately, a well-organized data set and specialized software can speed up the time it takes you to review your assessments, meaning you’re well-equipped to determine what to appeal. To help speed up your appeal determination process, we’ve put together two critical steps for identifying tax-saving opportunities in your assessments using software.
1. Organize and review your data.
It may seem obvious, but having all of the data you need in the right format is essential for making strategic appeal decisions. But how do you know what you need, and in what format you need it?
High-Level Assessment/Value Data
While it varies by portfolio and appeal strategy, there are some key points you’ll want to make sure you’re tracking:
- Assessment/Tax Year: what year are your values for? Do you have all the values for the current year?
- Notice/Value Type: what type of notice have you received, and over what time frame? For example, you’ll want to note whether your assessment was annual, biannual, or quadrennial, as well as the value type (e.g. full value, limited property value, or supplementary).
- Appeal Date: when is your deadline to appeal? This varies by jurisdiction, so make sure you’re analyzing your assessment data in time to file!
- Exemptions, Abatements, and whether your values are capped: knowing whether your values are capped will determine whether or not you want to appeal. Similarly, if you’re eligible for exemptions, you’ll want to ensure you aren’t forfeiting any exemptions by appealing your values.
Along with these broader categories, there’s also county- and jurisdiction-specific data to consider. For example, your properties in New York may be subject to transitional values, while portfolios in some States or Canadian provinces need to account for phase-ins. For each of these, make sure to review your phase-in or transitional amount for the coming year, and what effects an appeal will have on the value going forward.
Detailed Assessment/Value Data
Once you’ve ensured you have all of the data you need at a general level, it’s important to make sure you drill down to the specifics of the values themselves to make your analysis accurate and more efficient. Some key components include:
- Value type: If you have data that spans full, limited, and supplemental values, for example, you’ll want to group them so you’re able to compare values within a category (e.g. full values with full values).
- Market value (categorized by “land”, “improvement”, and “other”): where are changes happening in your portfolio? Unless you’re splitting up your data in advance, it can be difficult – if not impossible – to know which components of your values are increasing or decreasing.
- Assessment Ratios and Taxable Assessments: similar to the previous point, these can also be split out by land, improvement, and other.
Of course, the data you need varies by portfolio and your appeal strategy, so make sure you review your assessments carefully to make sure you’ve captured everything you need. However, one thing is clear: having an organized dataset will not only make it easier to review, but also ensure you don’t miss out on any opportunities.
2. Analyze your data using software like itamlink
Now that you have all of your data in one place and in a consistent format, you’re ready to start looking for appeal opportunities.
Traditionally, assessment reviews were done in a manual fashion on a property-by-property basis. Today, you can use technology to automate much of this process, allowing you to quickly identify trends and patterns over time.
Of course, there are many indicators that lend to your decision to file an appeal; in general, however, collecting your data in one place, cleaning the data so it’s easy to analyze, and generating analytics and reports to highlight outliers and anomalies, enable you to quickly zero in on your real opportunities.
Want more tips on organizing, reviewing, and managing your property tax appeals and tax savings potential? Reserve your spot for our free webinar on March 2nd on managing appeals and estimating tax savings.
Interested in the webinar recording for Part 1 of this series?
Fill out the form below to request your copy of Determining Appeals Using Technology.