2021 will be a pivotal year for the global economy following the coronavirus pandemic. Owners of commercial real estate, in particular, are bracing themselves for solutions that offer a ray of hope.
It is widely anticipated that commercial property tax will be revised this year. The most likely outcome is for relief to be offered to help businesses such as hotels, restaurants and businesses renting office space.
However, government relief funds has been slow to reach SMEs and many still owe a backlog of rent. Urban office markets are already feeling the pinch of Covid-19.
Commercial real estate owners need to find ways of cutting operating expenses. Tax relief provisions may be made available to delay payroll taxes, but the bigger concern is a loss of income from existing businesses.
With property prices going up thanks to a rejuvenated property market, corporate taxes go up as well. Yet the reality for many real estate owners is that incoming rent will go down.
Real-Estate Tax Appeals
Property taxes are a real burden right now. The primary complaint is that the assessment of property prices means the tax rates are too high.
The best hope for real estate owners is the potential for a tax appeal requesting the assessment of their assets to be lowered in order to reduce the tax bill.
A key component for real estate owners to leverage profits is to monitor taxes across their portfolio. Property tax appeals will be determined on a number of components such as tax classification or exemption.
Financial advisors are appealing to clients to produce a statement of income and expenses detailing leasing activity and accounts that are no longer active.
Preparing tax filings in advance will be critically important when claiming property tax relief. Deadlines vary from one region to the next and some property owners see little relief in the short term.
Legal experts specialising in corporate tax laws forecast a high number of commercial property tax assessments will wind up through the court system. And the property tax cases are notoriously slow.
Property Tax Specialists
It is possible for landlords to pursue relief for commercial real estate tax. Tax authorities typically have a website where users can find basic information and file a claim.
However, information tends to be scattered across several pages and finding clear information can make filing a tax appeal time-consuming, frustrating and problematic.
The court route as a whole is not known for speed and efficiency. The pre-pandemic backlog has piled up since lockdowns were enforced and queues will become even more jammed following the impending influx of cases.
Performing a tax appeal will be less of a burden and more efficient if left to corporate tax specialists with experience in the taxation of commercial real estate.
Tax authorities are notorious for dismissing claims that have been filed incorrectly. Missing information could potentially harm the success of your appeal.
Outsourcing an appeal for taxation of commercial real estate to experienced lawyers enables you to leverage their expertise and navigate unusual situations that could cause more financial problems than solutions.
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