6A — June 14 - 27, 2019 — DelMarVa — M id A tlantic
Real Estate Journal
www.marej.com
D el M ar V a
ith Fiscal Year 2019 real estate tax bills set to be i ssued By Zeke Sansone & David Johnson, Joseph C. Sansone Company The continued shift of tax burden to commercial real estate in the State of Maryland W Between FY 2014 and FY 2018, the increase in average value per property as estab-
shortly, it’s time to evalu- ate how the tax burden has shifted in Maryland. Most states i m p a r t a greater tax b u r d e n o n
lished by the S t a t e D e - partment of Assessment and Taxation (SDAT) for commercial properties in- creased 23%, while the av-
David Johnson
Zeke Sansone
commercial taxpayers than residential, and Maryland is no different in this regard. This shift is borne by commercial real estate owners and their tenants. Let’s look at the data:
erage value for non-commercial property (which includes resi- dential homes, apartments and townhomes) increased only 5.5%. Due to these shifts in market
values, commercial property owners will pay a higher pro- portion of total real estate taxes across the state. The annual reports issued by the State De- partments of Assessment and Taxation (SDAT) consistently show higher increases for com- mercial property than for resi- dential. (For example, during the latest Fiscal year the aver- age residential change in value was +8.2% versus +12.5% for commercial properties.) Commercial property owners need to ensure that they do not pay more of this property tax burden/shift than is required by law. Fortunately, there are things that you can do to keep your property competitive while also maximizing your cash flow and return on your investment. However, it’s imperative to have a comprehensive strategy that effectively scrutinizes not just the value set by SDAT, but also incorporates the methodol- ogy and justification used by SDAT to generate the value in the first place. It is recom- mended that a review be con- ducted annually not just in the first year of each triennial reas- sessment. Maryland law allows real estate property tax appeals through a process known as a Petition for Review (PFR) in the second and third year of the reassessment cycle. Both prop- erty owner’s, as well as tenant’s that possess the right to appeal a property’s tax assessment, are eligible to appeal. Filing an appeal and achiev- ing a successful outcome re- quires preparation. When re- viewing a property’s market value you need to understand not only your property but the market itself. This involves understanding, not just compa- rable sales, but effective rental continued on page 8A
Commercial Real Estate property taxes in Maryland have increased drastically in the last five years. 23% INCREASE IN REAL ESTATE TAXES! Want to pay less property taxes? Contact us for a no cost evaluation: (800) 394-0140 / maryland@jcsco.com
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6701 Democracy Blvd., Suite 300, Bethesda MD, 20817 | Toll Free: (800) 394-0140 | Tel: (202) 270-5088 |www.jcsco.com
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