Establishing A Property’s Tax Valuation – Earlier is Better


Few developers think of spending precious time and resources on working with a municipality to determine the appropriate property tax valuation method and an estimated preliminary value of a real estate project during the preconstruction phase. Doing just that, however, can pay dividends over the life of a project.

Today, the taxable value of property interests is a key element in the process of securing economic incentives, in structuring property transfers and in predicting tax assessments that may make or break transactions. It’s important to have a good bearing on how a municipality will likely treat real estate and taxable personal property for valuation purposes. Conversely, not understanding how a municipality will arrive at a property’s valuation can end up being very costly. Once a municipality has established a starting value for the project, that value becomes part of a larger context and therefore much harder to change.

A property’s value is reflective of (and can vary because of) a host of factors: market sales of similar property, perceptions in the finance world, trends in capital and investment markets, operating costs, income from different kinds of activities on a site, macro and micro economic trends and many more factors.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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