Multifamily Property Tax Appeals and Assessment Reductions
Property taxes are a significant operating expense for multifamily property owners and can directly affect net operating income and the long-term value of an apartment property. When multifamily properties experience revenue pressure, increasing expenses, or changing market conditions, a property tax appeal may provide an opportunity to reduce operating costs and improve property value.
Skoloff & Wolfe, P.C., represents multifamily property owners in property tax appeals and assessment matters. Our approach combines legal representation, data-driven analysis, and an understanding of multifamily real estate valuation to identify potential tax savings and develop evidence-based appeals.
The firm represents multifamily owners of properties and portfolios of different sizes across multiple jurisdictions.
How Multifamily Property Tax Appeals Can Increase Property Value
For income-producing multifamily properties, property taxes are an important component of operating expenses. A reduction in property taxes can increase net operating income, which may affect the property’s overall value.
Our attorneys analyze the circumstances affecting each property and determine whether the existing assessment accurately reflects the property’s taxable value.
A successful property tax appeal may help multifamily owners:
- Reduce annual property tax expenses
- Increase net operating income
- Improve the property’s financial performance
- Enhance the value of an individual property
- Identify tax-saving opportunities across a multifamily portfolio
- Address assessments following new construction or improvements
Multifamily Property Tax Assessment Reductions
Skoloff & Wolfe, P.C., has obtained substantial assessment reductions for multifamily property owners. Examples include:
- Reduced a 2,000-unit multifamily property assessment from $116 million to $67 million
- Reduced a new-construction multifamily property assessment from $134 million to $82 million
- Reduced a portfolio of multifamily properties from $129 million to $99 million
- Reduced a Class A multifamily property assessment from $92 million to $71 million
- Reduced an added assessment on new construction from $18 million to $6 million
- Reduced a Class A multifamily property assessment from $91 million to $80 million
All assessments are rounded to the nearest million. Results may vary depending on the particular facts and legal circumstances of each matter.
Multifamily Property Tax Appeals Across Multiple Jurisdictions
We have represented multifamily property owners in multiple jurisdictions, including:
- New Jersey
- New York
- Pennsylvania
- Ohio
- Maryland
- Virginia
Successful multifamily property tax appeals require an understanding of local assessment practices, valuation methodologies, filing requirements, and applicable deadlines. The appropriate approach can vary significantly depending on the jurisdiction and the characteristics of the property.
Understanding Multifamily Property Valuation
Multifamily properties can involve complex valuation issues. Owners may invest in amenities, such as gyms or coffee bars, and property improvements designed to attract residents and remain competitive in the rental market.
These amenities can increase operating costs and consume valuable building or site space. A careful property tax analysis should account for the property’s actual economic characteristics and the relevant valuation methodology.
Data-Driven Analysis for Multifamily Property Tax Appeals
A successful multifamily property tax appeal requires more than asserting that an assessment is too high. Property owners need reliable evidence and analysis supporting the requested assessment.
It’s important to focus on the data underlying each multifamily property tax appeal. Depending on the circumstances, this may include analysis of property income, expenses, rents, occupancy, market conditions, property characteristics, and other information relevant to valuation.
Our attorneys use this analysis to clearly articulate the basis for an appeal and present the evidence to the appropriate taxing authorities.
Multifamily Property Tax Reviews for Real Estate Portfolios
Owners with multiple multifamily properties may benefit from an annual review of their entire portfolio to identify properties that may warrant a property tax appeal. This allows owners to focus resources on properties where an assessment review may present an opportunity for tax savings while avoiding unnecessary appeals where the available evidence does not support a challenge.
Portfolio-wide screening can be particularly important for owners managing large numbers of multifamily properties across multiple jurisdictions.
Property Tax Appeals for New Multifamily Construction
New construction can create additional property tax considerations for multifamily owners and developers. An added assessment following construction or improvements may materially increase the property’s tax burden.
Understanding the applicable valuation methodology, assessment procedures, and filing deadlines can be particularly important when challenging an assessment following the completion of a new multifamily project.
Multifamily Property Tax Appeal Deadlines and Valuation Methods
Property tax appeal procedures and deadlines vary by jurisdiction. Missing a filing deadline can affect an owner’s ability to challenge an assessment for a particular tax year.
Before pursuing an appeal, multifamily property owners should understand:
- The applicable filing deadline
- The property’s assessment and tax classification
- The relevant valuation methodology
- Available evidence supporting a reduction
- Applicable administrative or judicial procedures
- The potential financial benefit of pursuing an appeal
Experienced counsel will develop strategies based on the particular property, jurisdiction, and available valuation evidence.
Experienced Multifamily Property Tax Attorneys
Multifamily owners face ongoing pressure to control operating expenses while maintaining properties that attract and retain residents. Property taxes represent one significant expense that should be reviewed as part of an owner’s broader asset management strategy.
To discuss your multifamily property taxes or a potential property tax appeal with Skoloff & Wolfe, P.C., use the contact form or call 973.992.0900 to speak with a property tax professional.
Multifamily Property Tax Frequently Asked Questions
Can multifamily property owners appeal their property tax assessments?
Yes. Multifamily property owners may have the right to challenge their property tax assessments, depending on the jurisdiction and applicable procedures. The specific filing requirements, deadlines, and appeal process vary by location.
How can a property tax reduction increase the value of a multifamily property?
For an income-producing multifamily property, reducing operating expenses such as property taxes can increase net operating income. Because income is an important consideration in valuing many multifamily properties, an increase in net operating income can affect the property’s overall value.
What factors are considered when appealing a multifamily property tax assessment?
The relevant factors depend on the jurisdiction and valuation methodology. Property income, rents, occupancy, operating expenses, market conditions, property characteristics, amenities, and other financial and market data may be relevant to determining the appropriate taxable value.
Do multifamily amenities affect property tax valuation?
Amenities can be relevant to a multifamily property’s financial and physical characteristics. Fitness centers, resident lounges, coffee areas, recreational spaces, and other amenities can involve additional operating costs and occupy valuable property space. Their treatment in a property tax valuation depends on the applicable valuation methodology and jurisdiction.
Can new multifamily construction receive a separate property tax assessment?
New construction or improvements may result in an additional or revised assessment, depending on the jurisdiction. Owners should review any new assessment to determine whether it accurately reflects the property’s taxable value and whether an appeal is appropriate.
Should multifamily owners review their entire portfolio for property tax savings?
A portfolio-wide review can help identify properties that may warrant further assessment analysis or an appeal. A screening of multifamily portfolios can identify potential opportunities and prioritize properties based on the available evidence.
Can multifamily owners appeal property taxes in multiple states?
Yes. Multifamily owners with properties in multiple jurisdictions may pursue property tax appeals where permitted by the applicable laws and procedures.
