COVID-19 provides the perfect excuse for commercial real estate owners to challenge their property values this year. Property owners will assert that, because revenue is down across the board, their property values should be lower as well. But as we know, that is not necessarily the case, especially given lower interest rates driving an uptick in real estate sales.
It is important to remember that ad valorem tax complaint filings for this year should focus on the property’s value as of January 1, 2020, which was long before a global pandemic was on anyone’s radar. So COVID-19 really should not factor into a Board of Revision (BOR) decision. Nevertheless, that won’t prevent property owners from trying to catch a tax break.
School districts can counter these complaints by getting directly involved in defending against them. Counsel for school districts can appear at \BOR hearings to call on the BOR to only consider reliable evidence to substantiate a request to decrease property values. Districts can also offset potential losses by filing complaints to increase property values based on recent property sales. Taking a more aggressive strategy this year is worth considering, particularly for those school districts facing a revenue shortfall from a decline in state sales tax collections.
Complaints must be filed by March 31st and counter-complaints in response must be filed shortly thereafter. If a deadline is overlooked, a school district may lose its chance to participate in the proceedings or challenge the property owner. If you have interest in participating in this process or have questions about it, be sure to contact your legal counsel in short order.