REAL ESTATE TAXES
For most buildings, the single largest operating expense item is real estate taxes. Taxes differ
from other operating expenses in that the property owner has no control over the amount of taxes.
Also, real estate taxes must be paid in their entirety or the property owner faces losing the property. In
highly appreciating areas and after a sale of the property, taxes may change dramatically.
If the tax increase has not been budgeted, the increase may have dire effects on
loan repayment. Even if the taxes are paid, the increased tax expense could reduce all the
cash flow, resulting in reduced maintenance and delayed capital improvements and the quality
of the collateral will deteriorate.
EXPECT TAX INCREASES
Local government's appetite for tax revenue has grown significantly over the years. Fulfilling
that appetite forces taxing authorities to increase taxes on non residential properties to
their maximum, since taxing privately owned homes in both politically incorrect and often
limited by legislation. After the sale on most buildings, the assessment will likely be
raised. Many property assessors increase assessments based on the market value (sale price) of
the properties. With the rapid appreciation in many markets, the sale price will be much
higher than the assessment. The recent sale will trigger a re-assessment.
HOW DOES PROPERTY APPRECIATION EFFECT YOUR TAXES?
In areas that are appreciating rapidly, the tax increase will follow one to two years later.
The property assessor bases the assessment on recent sale comparables, so the increase in
assessment will lag as the new higher sales are recorded. Even without a sale, many taxing authorities re-evaluated the
assessment every three years on each building and in many metropolitan areas, assessments are
re-evaluated every year to reflect the higher market value.
HOW CAN YOU GET RELIEF?
Actra Inc. specializes in real estate tax assessment appraisals since 1980 and offers a wide
variety of appraisal services with thirty years of experience in the area of ad valorem
taxation. Actra Inc. can provide tax protest appraisal reports for the purpose of contesting
real estate tax assessments in:
- The City of Chicago
- Cook County
Generally, Actra Inc. appraises industrial and commercial properties including multi-family,
office buildings, shopping centers, auto dealerships, warehouses, strip shopping centers,
garages and restaurants. Appraisal fees are determined prior to the property inspection
and are based on the amount of work required. Actra Inc. does not accept contingency
fee based assignments.
Inquiries about Actra Inc. and its services are welcomed. The firm can be contacted by
phoning (708) 599-1400. Actra Inc.'s e-mail address in