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The Significance of the New Year to Property Tax Appraisal

  • January 3, 2014

As the calendar is set to a New Year, your local county appraisal district is starting to gear up to set your new appraised value for the New Year as well. It may appear currently the county is primarily concerned with tax collection until the 31st, however, January 1st is perhaps one of the most significant dates in property tax valuation. The reason for this is that it’s the date of valuation for all types of taxable property entities.

Real Property (Commercial and Residential)

Real property is assessed based on ad valorum market value and physical condition as of January 1st. Ad valorum taxation simply means that market trends in your respective neighborhood or economic group (for commercial properties) within the last year or 24 months are considered up to this point. Most market data for the current year will not be used in determining a value. It also is the determinate date of physical condition of a property. If your property sustains damage from a fire or foundation issues as of November of the previous year but is corrected before January 1st, the county is unlikely to use evidence of damage to a property because the damage was corrected before the valuation date.

Similarly, if you demolished a building in February of the new protest year, you would not be able to claim that the property was a vacant lot for your protest because as of January 1st, the building still existed on the property.

Commercial properties that are valued based on income (typically properties that produce rent; office or retail multi occupancy buildings) should contact their property tax consultant when their P&L and rent rolls are completed from the previous year so that preparation may begin for the new protest season.

Business Personal Property

When it comes to business personal property, ownership of taxable assets is instrumental. If a computer is retired or purchased before the valuation date and can be found as an asset on your books, it will determine cost value that you render for your business. The inventory that you have at the end of the year also taxable but doesn’t enjoy the depreciation that furniture, computers or vehicles do.