How to Navigate Property Tax Assessments
Property tax assessments can significantly impact your bottom line—especially if you’re a commercial property owner, real estate investor, or CFO managing a diverse portfolio. Knowing how these assessments work and how to navigate them is essential for ensuring you’re not overpaying and can open the door to meaningful savings.
At Source Advisors, we’ve helped thousands of businesses uncover tax savings through property tax consulting. Whether you’re preparing for a new assessment cycle or disputing a valuation, understanding the fundamentals is the first step toward managing your tax liabilities effectively.
Understanding Property Tax Assessments
Property tax assessments are the foundation for calculating your annual property tax bill. Each local taxing authority—typically a county or municipality—assigns a value to your real estate based on its estimated market value. That assessed value is then multiplied by the local tax rate to determine your tax obligation.
Key components of a property tax assessment:
- Assessed Value: The value placed on your property by the local assessor. It may differ from market value.
- Tax Rate (Millage Rate): Set by local governments and applied to the assessed value to calculate tax due.
- Assessment Ratio: Some jurisdictions use only a percentage of market value as the basis for assessments.
- Reassessment Frequency: Depending on your state, reassessments could occur annually, biennially, or on an ad-hoc basis.
5 Steps to Navigate the Property Tax Assessment Process
- Review Your Assessment Notice Carefully
Once your local assessor releases the new valuation, review it for accuracy. Look for discrepancies in square footage, building condition, land classification, or usage type. - Understand Local Valuation Methods
Assessors may use the cost, income, or sales comparison approach. Knowing which method was used helps identify whether the valuation aligns with your property’s actual performance or market standing. - Benchmark Against Comparable Properties
Compare your assessed value with similar properties in the area. Discrepancies in valuation can provide the foundation for a strong appeal. - File a Timely Appeal If Necessary
Most jurisdictions have strict deadlines—some as short as 15 to 30 days from notice issuance. Be prepared with documentation, such as appraisals, rent rolls, or maintenance records, to support your case. - Partner with a Property Tax Consultant
Navigating property tax assessments can be complex, especially across multiple jurisdictions. A seasoned consultant like Source Advisors can manage appeals, gather evidence, and negotiate with assessors—freeing your team to focus on higher-value initiatives.
When to Consider a Professional Review
- You recently completed renovations or capital improvements
- Your property experienced a change in occupancy or revenue
- You suspect unequal assessment compared to nearby properties
- You own a specialized or income-producing asset class
Effective management of property tax assessments is not just about compliance—it’s a strategy to protect margins and optimize tax positions. With rising property values and evolving local tax codes, now is the time to be proactive.
Whether you’re evaluating a single location or overseeing a national portfolio, Source Advisors brings the expertise, data, and advocacy needed to support your assessment strategy.
