If you are the owner of a commercial, industrial, retail, office or other property in Pennsylvania, then now is the time to review the tax assessment for your property against its current market value. This same review is also applicable to residential properties. Today's economy has caused many property owners to experience declining rents, increased vacancy and the need to become "creative" in leasing space. These factors have aided an already declining real estate market in devaluing property for real estate tax purposes.

Unfortunately, county boards of assessments cannot reassess property every year based on the local economy. As a result, the real property taxes assessed against your property by the county board of assessment for county, municipality and school district taxes may be out of proportion to the actual value of your property or the value attributable to your property by capitalizing the income you receive from the property.

What Should You Do If You Think Your Real Estate Taxes Are too High?

First, you need to determine whether to file an appeal to the county board of assessment for your property. To do so, you need an experienced real estate assessment attorney and a qualified appraiser.

On commercial and industrial properties, as well as rental residential properties, two calculations often make the determination as to whether or not to appeal. Capitalization of income and comparable sales gives us the ability to make a preliminary determination as to whether a particular tax assessment is out of line.

The capitalization of income approach is the easiest and quickest test to determine the value of your property, whereas comparable sales require more information. Up to date information on costs, square footage, occupancy, types and number of leases, use, location, mortgage amounts and interest rates, rental income and expenses is necessary to complete the capitalization approach. Recent comparable sales within the last year before filing of an appeal should be noted and analyzed. Financing implications must also be taken into account to determine whether the sale is an arm's length sale or was the result of a mortgage foreclosure or workout agreement. For residential properties, the most reliable determination is of course comparable sales of similar homes within a reasonable distance from the subject property.

With the above in mind, now is the time of year to review your real estate tax assessment on any and all property owned. If the market value utilized by the board of assessment is inconsistent with the market value of your property, or if you have experienced rental income problems over the last few years, then an appeal to your assessment this year may be in order. We can help you make that determination in short order. If an appeal of your assessment appears warranted, we may suggest further analysis by a qualified appraiser. In Pennsylvania, appeals in Bucks, Chester, Delaware and Montgomery counties need to be filed on or before August 3, 2015. The deadline for filing an appeal in Philadelphia County is October 5, 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.