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Impact on property tax assessments During COVID-19

 

Most income-producing properties are suffering from financial losses and should pursue assessment reduction. As businesses look for financial help at every possible opportunity, some external motivators are encouraging businesses to seek after 2020 property assessment reductions, established on Covid related financial misfortunes. 


However, most states decide property assessments on early year income. As such, pursuing 2020 assessment reductions solely on Covid economic losses will not be right in many states. 


Therefore, businesses should seek after 2020 and 2021 property assessment reductions based on a review of comprehensive assessment. 


Types of property tax relief


In general, property tax relief falls into two categories: 

  • Disaster relief 

  • Economic relief.


Disaster relief: It specifically covers “physical damage” to property(s) resulting from certain things like fire, earthquake, tornadoes and storms. It is possible to obtain a current-year reduction in property assessment value or property tax for physical damage. It does not provide property tax relief for economic losses.


Economic relief: It applies to income-producing property when there is a loss of revenue due to general economic conditions. 


Challenging your property tax assessment 


Various assessors have already indicated that a reduction related to the current environment won't be prospective for the 2020 assessment. Just as businesses are seeking financial relief, so too are states, counties and municipalities seeking financial support in the form of tax dollars to offset huge losses in revenue already occurring.  


For those states where the assessment date fell within the pandemic timeline or for businesses with high dollars in question, there might be opportunity or extra motivator to challenge an assessment. With most assessor offices being shut, however, meetings to discuss any reduction could be pushed out until some other time in the year.


While the 2020 assessment might well be protected, decreases in current business income related to the Covid ought to be joined into assurance of the 2021 assessment. It would be reasonable to expect or advocate for a 2021 property tax reduction due to the COVID–19 economic conditions of 2020. 


If you have questions or concerns about the impact on your business property, or you feel there are unique circumstances impacting your assessment, it’s time to start. Leverage your property tax to your advantage today.

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