Everyone knows that the price of property is down right now, but paying less taxes on that property? Unheard of.
Except now, even sunny-side city tax assesors are forced to admit that yes, maybe, times are bad, and thus property owners ought not to pay as much as they were at the peak. Maybe.
SF Chronicle: Trophy buildings, including One Market Plaza, Bank of America centre, Crocker Galleria, the Marriott Marquis, the Westin St. Francis and One Sansome Street, lead the list of more than 1,000 commercial properties in San Francisco asking to have their property taxes slashed.
Collectively, those office towers, hotels, shopping centres and apartment buildings have an assessed value of $21.25 billion – but their owners say they’re worth about half that amount. If those claims stand, that could wipe $115.78 million off the property taxes the city collects. Residential appeals could erase another $13.47 million in property tax revenue.
San Francisco Assessor-Recorder Phil Ting usually scoffs at building owners’ claims, but now admits they may have more validity. Read the whole thing >
Meanwhile, if you’re a tenant in one of these — or many other — buildings seeking property tax relief, you should make sure you’re agitating for a cut.
Square Feed: As a tenant, it is also smart to have language within your lease that forces the landlord to seek property tax reductions, particularly if you are an anchor or sole tenant. In addition, many office are gross leases and as such contain a provision whereby the tenant is responsible for increases over the base year expenses.
What happens when the operating expenses fall? That is why tenants should seek the benefit of decreases as well, otherwise a tenant may be responsible for increases over the base year, but not see any of the benefits that result from a decrease.
And back on the government for a second…this is partly why even a balanced budget can be thrown off a mere few months after being passed. What the government is given, the government will spend, and more. So raising taxes is merely a short term solution unless there is legislation that forces the government to build and maintain a rainy day fund which can only be used to offset a fall in property values and income taxes.
And on down the deflationary spiral we go…
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