every assessor in the state

issues a notice of proposed assessment

you are entitled to challenge the

assessed value of your property

which is not the assessed value or av in

property tax

lingo

does not equate to market value

so you have to take your assessed value

and multiply it by a number

that the assessor gives you in the

notice that they send out to all real

estate owners

of what the proposed assessed value is

for a given tax year okay once you get

that

you can take the proposed assessed value

multiply it by the number the assessor

gives you and and come up with a market

value

this is mainly for residential real

estate but i’m when you do it for all

property but

on residential real estate if that

market value

based on the assessor’s proposed

assessed value

is higher

than your actual market value

you can file a property tax appeal and

the

property tax appeal

carries with it extremely strict time

deadlines for instance i live in a near

north suburban community in lake county

illinois

and when the lake county assessor sends

out the notices of reassessment

and they send them out regular mail

we have 21 days to file an appeal from

the date that notice was sent that

notice might take seven to ten days to

get into my mailbox

which means i have 10 or 11 days to file

a legal formal appeal and if it if it

involves residential property or any

other type of class

of real estate asset

you have to include

data in order to fight the proposed

assessed value i.e an appraisal

so

it’s something you really need to be on

the lookout for with commercial and

other types of property

the assessor often doesn’t have the

granular information the income and

expense statements the rent rolls the

capital improvements deferred

maintenance so they typically

don’t know how much money the property

is actually making

but oftentimes we will on commercial

properties we will contest the proposed

assessed value based on

our assumption of what the property’s

worth

with the understanding of how much money

it’s making so on on commercial

properties typically they’re valued at

their net operating income times a cap

rate cap rates

are a multiplier that investors use to

buy

commercial real estate that are pretty

um commensurate with

an annual rate of return interest rate

so if you’re buying something at a five

cap

you’re probably going to be earning

about a five percent annualized return

on the amount of money you put into the

asset

with interest rates going up however in

the last four months

cap rates have gone up which meaning

that means prices have come down and so

the assessor could have been

valuing commercial real estate

using a four four and a quarter four and

a half cap rate when in reality buyers

in the market right now are paying

six six and a half seven cap rates and

so there could be a big spread between

the bid and the ask

and then you also have the issue that

this is all as of january one in that

particular year that this applies so

if last january interest rates were at

three

hypothetically and now there are nine

which is a radical example

you can’t fight your taxes on commercial

property claiming

well in july my properties were

significantly less

because of the fact that interest rates

went up and buyers won’t pay as much

so it you’re you’re contesting the taxes

at the as of the lien date in the year

in which the property is being taxed

which is always one one