Maximizing Property Tax Savings Amid COVID-19March 16, 2021
Businesses, are you struggling to contain costs? Looking to relieve property tax burden? Here’s what you should know.
As the economic uncertainty of the COVID-19 pandemic looms on, businesses struggle to contain costs and find ways to reduce them in order to stay afloat. It is no secret that the hospitality industry has suffered significantly under the pandemic. Specifically, many hotels are in danger of losing properties to foreclosure. Yet there has been no relief offered to real estate owners for property tax payments, likely the first or second highest tax burden for these businesses. What relief, if any, is available to businesses?
Rising tax rates in 2021
A local government’s primary source of revenue is taxes. With emergency aid and services maxed out in response to the pandemic, government’s rising costs will be passed onto residents and business in the form of rising tax rates. Capital-intensive businesses are expected to be hit especially hard in 2021.
How much property taxes will your business overpay this year?
The following is a list of questions each owner should ask to help assess properties that could be opportunities:
- When was the last time a tax appeal was filed on each hotel?
- What was the savings results/scorecard by hotel property location over the past 3 years?
- Is there a pending appeal? If so, for what years and locations?
If you determine there has been little or no appeal results achieved in the past, it may be worth pursuing now. Studies have found that 80% of the time businesses are paying inaccurate amounts by as much as 10% – 50%. Actively reviewing and challenging property tax values, as well as reviewing and appealing any assessment errors makes good business sense and company stewardship. Not doing so puts owners in a tremendous competitive disadvantage with neighboring hotels and other commercial property owners who are actively protesting their values.
KLR’s real estate industry group can work with hotel owners to advocate for lower property taxes. If you are interested in creating and maximizing a comprehensive property tax savings program for improvement in cash flow, contact email@example.com.