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Thought for the day--

Thought for the day--. 42.7% of all statistics are made up on the spot. Commercial Property Values & Taxes – 2011 Tax Year. Presenting:.

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Thought for the day--

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  1. Thought for the day-- 42.7% of all statistics are made up on the spot. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  2. Commercial Property Values & Taxes – 2011 Tax Year Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  3. Presenting: Garth Bacigalupi is a graduate of Stanford University with a BA in Political Science. Garth served as a Governor-appointed member of the State Board of Equalization where for 10 years he heard tax appeals concerning commercial properties, land and residences. Garth is a 36-year resident of Arizona and has been an Arizona commercial real estate agent since 1986. He is currently a principal with Sage Tax Group, Arizona’s largest home-based property tax consulting firm, and works Maricopa, Yavapai and Coconino Counties. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  4. Topics • Tax Year 2011 – Timelines: Values & Taxes. • A Summary of the Valuation Process. • A Summary of the Administrative Appeals Process. • Small Claims Court & Tax Court. • Tax Calculations: Full Cash & Limited. • Your House. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  5. More thoughts-- • If you think nobody cares…try missing a couple of payments. • Depression is merely anger without enthusiasm. • Support bacteria…they’re all the culture some people have. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  6. What’s The Problem? Why Appeal? Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  7. This building had a 2009 value of $52,049,975 and paid property taxes of $896,338—not including parking structures and associated grounds. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  8. 2009 Primary Taxes set by government Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  9. Secondary taxes set by taxing districts and issues voter approved. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  10. Remainder of secondary taxes Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  11. Taxes by category--$0.67 of every dollar goes to education. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  12. The assessor reduced the 2010 value to $45,145,776—Sage appealed this reduced value based on income. Upon appeal the value was reduced to $25,278,315—with taxes falling to $546,988. This reduction led to a 2010 tax savings of $309,464! Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  13. When combined with the associated parcels: The 2010 full cash value of $60,438,293 including all parcels was reduced to $33,841,000, with total taxes dropping $1,124,904 to $732,284. This tax savings of $392,620 equals $4,362,444 in value when capitalized at 9%. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  14. Timelines – Why 2011? • Tax Year vs. Valuation Date. • Valuation Notices • Filing Deadlines • Notices of Change, Error, Claim Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  15. Tax Year vs. Valuation Date. January 1, 2010 is the date of the 2011 valuation upon which the tax bill received in September of 2011 will be calculated. Yes, that is correct—there is a 21-month lag in time between the property’s valuation and issuance of the tax bill. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  16. Maricopa County 2010 Calendar - Feb 12th: Assessor mails 2011 values. April 13th: Last day to file appeal. Jun-Oct 15th: Assessor meetings and SBOE hearings. Sept 30th: Notices of Amended Value. Oct 25th: Last day to appeal. Nov 1-21: Amended Value hearings. Dec 15th: Tax Court deadline. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  17. Basis of Valuation & Appeal - • Cost. • Market. • Income. • Equity. • By Statue. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  18. Cost – Computer Modeled. Actual Cost. Components. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  19. Market - Comparable Sales Similar Use Code Similar Age, Size & Construction Similar Market Area Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  20. Income Previous 3 Years of Income. Rent Roll and Occupancy History. Dept. of Revenue Form 300. Cap Rates. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  21. Equity Similar Properties in Similar Market Areas Should Be Valued Similarly. Your Competitor’s Full Cash Values Do Matter. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  22. By Statute - Shopping Centers. Special Use Properties. Trade Zones. Exemptions. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  23. Think quick-- • The early bird may get the worm, but the second mouse gets the cheese. • 99 % of lawyers give the rest a bad name. • A day without sunshine is like…night. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  24. The Administrative Appeal - Who Can Represent You Agency Authorization. Prepare Forms & Evidence. File Timely With Assessor. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  25. Meetings & Hearings - Assessor Meeting (A-level). State Board of Equalization (B-level - SBOE). Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  26. Litigation - Tax Court. Small Claims Court. Cost & Time. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  27. Tax Calculations - Full Cash & Limited Values. Assessment Ratios. Limited Value. - Rule A - - Rule B - Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  28. Ratios • Residential: 10% • Vacant land: 16% • Commercial: 21% for 2011—110% more than residential. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  29. Mixed Ratios • Properties with a larger than average building to land ratio, or with mixed uses, may qualify for a mixed ratio. • By recent statute, a residence may qualify up to 40 acres for a 10% ratio. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  30. Tax Calculation • FCV times ratio, divided by 100, times the secondary rate. • Limited Value times ratio, divided by 100, times the primary rate. • Total. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  31. Valuations • The full cash value (FCV), by statute, equals market value. A statistical analysis allows a 16% leeway. • The limited value can increase only 10% per year unless there is a significant change to the property. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  32. Your House - Is Your FCV Greater Than Your Purchase Price, or the Sale Price of Similar Homes in Your Neighborhood? Website: Maricopa County Assessor. Your Valuation. Neighboring Values, Square Footage, Lot Plat, Aerial. On-line Forms and Instructions. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  33. Summary • Valuations and Appeals are becoming increasingly complicated. • Evidence Must be as complete as possible. • The deadlines are not negotiable. -and- • The majority of properties appealed are valued significantly less than similar properties not appealed. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  34. And finally-- • Inside every older person is a younger person wondering what the hell happened. --and-- • He who laughs last…thinks the slowest. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  35. Where to Get More Information • Garth Bacigalupi: (480) 480-231-4259 Website: www.sagetax.com email: garth@sagetax.com. • State Board of Equalization: (602) 364-1600 Website: www.sboe.state.az.us/ • Maricopa Assessor: (602) 506-3406 • Website: www.maricopa.gov/assessor/ Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

  36. Or go to - www.Sagetax.com Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, 2010

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