Your commercial property market value is one seemingly small (or not so small) number that can have a tremendous impact on your commercial property taxes, which affect your business and bottom line. At Lane Property Tax Advocates, we believe the best way to unburden your business and prime yourself for success is to go into every situation as informed as possible. That includes knowing how valuations regarding your commercial property work.
Here, we’ve laid out need-to-know information regarding your commercial property market value. Read on to learn more about the important role it plays for your business, how it differs from your assessed value and more.
What is Your Commercial Property Market Value?
“Market value” refers to the actual value of your commercial property, or what a buyer would be willing to pay if you placed that property on the market at a specific point in time. It isn’t a number calculated through a specific formula, but rather a careful assessment where a number of factors come into play. Here are a few considerations that can impact your overall commercial property market value.
The valuation portion of your property tax bill will break out the value of your land, as well as that of your buildings and extras. When you add the two up, you find your assessed value.
Lane Lesson: Want to dig deeper into the various aspects of your bill? We have a blog post that breaks your commercial property tax bill down in a way that’s quick and easy to understand.
How is Your Commercial Property Market Value Determined?
We’ve already touched on a few of the factors that can impact your commercial property’s overall value, but that’s just the tip of the iceberg. In the commercial real estate world, there are three general approaches an appraising entity can take when determining that number. Remember, the specific route your appraising entity takes will depend on considerations such as the type of commercial property you own and operate.
Lane Lesson: Curious to learn more about the three approaches to commercial real estate valuation? Investopedia offers in-depth explanations into the cost approach, income approach and sales comparison approach, too.
We hope the above information sheds a little light on how your appraiser settles on the market values that guide what you’ll pay in commercial property taxes. It’s important to remember that the mass appraisal systems most county appraisal districts (CADs) use are an imperfect science. More often than not, they result in overinflated assessed values that cost property owners thousands upon thousands of dollars out of pocket.
The best way to ensure you’re only paying what’s fair, and to keep those assessed values in check, is to protest your commercial property taxes each year. (Don’t worry, you don’t have to go it alone. Lane’s experts are here to help.) For more information about any of the above, or to learn more about how to begin your commercial property tax protest, feel free to contact the professionals at Lane. We look forward to helping you!