A Real Estate Tax Appeal is a process by which a property owner contests a property's valuation in an effort to reduce the assessed value, and accordingly, the tax bill on that property. A successful appeal can be an important tool for a triple net (NNN) lease investor looking to keep tenants in their current location, as well as helping gross lease owners add to their bottom line. Tax appeal procedures can differ greatly across municipalities, so one must first understand the unique requirements for making an appeal if they hope for their efforts to bear fruit.
Key Concepts:
1. The appeal process varies according to the county and state in which the property is located. Plan to call the county/city tax assessor well in advance to determine the material necessary for preparing a successful bid at a reassessment. For instance, some municipalities will only accept an appraisal from an accredited appraiser as evidence in support of an appeal. Others may simply ask for an operating statement as proof that a new valuation is appropriate.
2. NNN lease investors should be aware that their lease may allow a tenant to appeal a tax bill, or even require the landlord to contest a bill at the tenant's request. Any tax savings will normally be passed along to the tenant, although most leases will also stipulate that the tenant reimburse the landlord for all expenses incurred in the appeal process.
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