Declining Real Estate Value? Appeal Your Tax Bill.

The Great Recession continues to take its toll on our Nation. Many leading business journals predict continuing losses in the commercial real estate market. Although it is hard to see any bright side to this domino’s fall, there is one practical step that owners can take to mitigate the damage – appeal their tax bill.

The key to success is having a team that will ensure legal compliance with the procedural aspects, and then present a persuasive statement of value. The two professionals needed for this process are an attorney and an appraiser.

This article examines how the process works in Kentucky. The first step involves a conference with the county’s Property Valuation Administrator (PVA). A property owner who wishes to contest a newly assessed value of its real property must first schedule the conference; it must occur prior to the end of the tax roll inspection period. The tax roll inspection period lasts thirteen days, usually beginning on the first Monday in May of each year and shall be open for six days each week, one of which is a Saturday. If the PVA Conference does not result in agreement, the property owner may file an assessment appeal with the county clerk’s office.

This next step is the local board of assessment appeal, which must be filed no later than one workday following the tax roll inspection period. This public hearing offers both sides the opportunity to offer opinions on value. This is where an attorney and appraiser can present evidence warranting a reduction in value.

Any party can appeal an adverse decision to the Kentucky Board of Tax Appeals (KBTA). The appeal must be received by the KBTA within 30 days from the date of the mailing of the ruling notice sent by the local board of assessment appeals. Finally, an appeal from the order of the KBTA can be taken to the Franklin Circuit Court or to the Circuit Court of the county in which the party aggrieved resides or conducts his place of business.

Even though appealed, the taxpayer must still pay the property tax. When the appeals process is finalized, and if the value of the property is determined to be more than the amount claimed by the property owner, a supplemental tax bill will be sent to the property owner.

Declining property values warrant evaluating the cost and potential benefits of a tax appeal. Although the Great Recession has been tough on everyone, our tax system does offer affected property owners the opportunity to seek a reduction in real estate taxes. If you suspect that your commercial real estate has declined in value, contact your attorney to discuss your concerns.