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The Property Tax Truth and Nothing but the Truth

Illustration of proactive versus reactive

Here’s something that will upset many of the old guard in the property tax industry, but it’s a brutal truth. Property tax consulting was built to provide reactive solutions. Wait for an assessment to be issued, disagree with the value, hire someone to fight it. Then wait and hope for a successful resolution and subsequent tax savings. That model worked pretty well for the last century, and there will always be a prominent place for those services.

However, the area of greatest opportunity to benefit owners of commercial real estate lies in the proactive side of property tax consulting. Yet proactive solutions aren’t something most property tax advisors are interested in providing. The truth is, the vast majority of revenue earned in our industry is due to contingency fees secured through reactive tax appeals. The traditional system doesn’t provide an incentive to focus on much else. That’s the brutal truth.

So, what are those proactive solutions? Quite simply, real estate tax forecasting and budgeting. That means accurately predicting what real estate taxes will be in the future when you are buying, building, or operating a property.

As real estate industry veterans say, there’s more value in knowing what landmines lay ahead so you can plan accordingly than there is walking blindly across that minefield hoping your deal doesn’t blow up. Lowering your property tax burden is always valuable. However, don’t stake your investment returns on a process that requires you to “find savings.”

Here’s our advice to real estate owners and one of our differentiators. Proactively spend the time and effort to accurately forecast ongoing property tax burdens FIRST. After that’s done, when needed, react to an unfair assessment by pursuing a tax assessment appeal. A few hours of quality planning will save you months in time, mountains of money, and a restful night’s sleep.

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