Let us make property tax incentives work for you.
Owners and investors realize there are significant considerations that should be addressed prior to purchase. Many opportunities to save on future property taxes cease to exist after closing. KSN can perform a thorough and detailed property tax analysis and make recommendations prior to purchase or lease to help lower subsequent real estate taxes. This should be considered a vital part of any due diligence process.
KSN has worked with many buyers and brokers and saved hundreds of thousands of dollars for our clients by recognizing ways to reduce future taxes. There is no one-size formula; each case is unique.
Helping our clients understand property tax issues prior to purchase
Prior to purchase, we identified opportunities for a client to save future property tax liabilities. Had we not stressed the importance of pre-Acquisition analysis to our client, a tremendous opportunity may have been missed.
Situation - A client was in the process of purchasing an office building that was in foreclosure. The property owner was a major national lending institution. At the time of sale, the tax liability was approximately $115,000.
Our solution - We identified several opportunities, including obtaining a Class 8 Tax Incentive and anticipated a substantial reduced future tax bill based on both the Class 8 Incentive and the purchase price.
Client’s tax savings - After our appeal, the taxes were reduced to approximately $17,000. As a result of our analysis, our client received a Class 8 Incentive benefit AND a generous tax credit for the year of purchase. This could only be accomplished because we were able to act on behalf of the client prior to his purchasing the property.
You can get a refund for taxes paid in error
Clients should contact KSN prior to buying property to avoid paying unnecessary taxes.
Situation - A property owner contacted us after purchasing a building from a lending institution that had foreclosed on the previous owner. The building had been vacant for number of years prior to purchase. The bank previously had filed tax appeals, based on vacancy, except for the year of sale. The new owner did not realize the assessment had jumped drastically in the year of purchase, causing the property taxes to increase from $10,300 to $36,000. Unfortunately for the new owner, his contract with the bank called for a final proration of 110 percent of the previous year’s taxes. This left a tax-funding shortfall of approximately $31,000.
Our solution - This case underscores the importance of reviewing all property tax issues prior to purchase during the due diligence phase. Had we been contacted before closing, we would have advised the client of the impending tax increase and taken steps to eliminate this needless tax increase.
Client’s tax savings - Fortunately for the client, we were able to obtain relief from this crippling increase through a Certificate of Error the following year.
