The top priority for many property owners is reducing your property tax bill. This is one of our specialties at Moschetti Law Group. Unlike many other law firms, our real estate attorneys have a finance and commercial real estate brokerage background. This means we know the market, how to value a property, and what is fair and reasonable on top of how to file a property tax appeal.
Property taxes are one of the largest recurring operating expenses associated with owning real estate. The total number for your final property tax responsibility is the value of your property when you bought it multiplied by the tax rate. Although California’s property tax rate is far from the highest in the country, it is still a significant expense – especially if your property’s purchase price was sizeable. What’s more, if you bought in what turned out to be a bubble, you’ll be paying that inflated tax rate for the life of your investment.
Regardless of the purchase price of your property, or when you bought it, the ups and downs of the real estate market also affect your comparative tax rate. You could be paying significantly more than someone who purchased a similar property in an ebbing financial market. In California, even with Prop 13 keeping property values relatively lower than some other states, a down market can result in paying much more than your fair share. This is where an in-depth review of your tax bill might prompt you to consider filing a property tax appeal.
Another consideration around property tax for landlords is whether to pass the cost on to your tenants. For landlords who don’t pass property taxes through to their tenants, it brings down your Net Operating Value, the overall value of your property, and means less cash in your bank account at the end of the day.
For landlords who pass property taxes through, higher property taxes lowers the amount that your tenant can pay in rent. To charge a competitive rent based on similar properties, there is only so much you can add to the bill before you are pricing yourself out of finding tenants altogether. Tenants paying property taxes will be paying that money to the Assessor instead of you.
The good news is that property taxes are subject to annual reviews and appeals. Having a team that understands the intricacies of appealing them can significantly impact your bottom line. A team of real estate lawyers that knows what to look for and can navigate the system’s ins and outs can have a positive effect on your profitability.
The attorneys at the Moschetti Law Group represent high net-worth individuals, private equity firms, and family offices. We built our firm on a set of principles that puts our clients first by providing outstanding representation, aggressive negotiation, and world-class client service and communication. We have extensive knowledge of the commercial real estate market that your property will be judged against, as well as extensive experience working with local taxing officials.
See how the Moschetti Law Group can help review your property tax bill by setting up a free, no-obligation strategy session right now.