MEbiz Real Estate Insider: Establishing A Property’s Tax Valuation – Earlier is Better

By Rob Crawford, municipal and regulatory attorney

Rob Crawford

Few developers think of spending precious time and resources on working with a municipality to determine the appropriate property tax valuation method and an estimated preliminary value of a real estate project during the preconstruction phase. Doing just that, however, can pay dividends over the life of a project.

Today, the taxable value of property interests is a key element in the process of securing economic incentives, in structuring property transfers and in predicting tax assessments that may make or break transactions. It’s important to have a good bearing on how a municipality will likely treat real estate and taxable personal property for valuation purposes. Conversely, not understanding how a municipality will arrive at a property’s valuation can end up being very costly. Once a municipality has established a starting value for the project, that value becomes part of a larger context and therefore much harder to change.

That’s where we come in. Bernstein Shur’s Property Tax and Valuation Team has deep experience in local property taxation, including the methodologies and appraisal science that local assessors use to determine a property’s assessed value. With experience counseling private businesses, public clients, not-for-profit entities and municipalities on all aspects of property taxation, our cost-effective and results-oriented approach can help navigate today’s dynamic and quickly changing marketplace. We’ve developed methodologies that allow us to trend and manipulate our studies to examine the many factors which impact fiscal operations and tax impacts when significant new development is proposed. Our results can provide an element of certainty in the near term and projected over multiple tax years and thereby enable taxpayers and taxing authorities to budget effectively and reduce their costs.

A property’s value is reflective of (and can vary because of) a host of factors: market sales of similar property, perceptions in the finance world, trends in capital and investment markets, operating costs, income from different kinds of activities on a site, macro and micro economic trends and many more factors. We apply our experience with these factors and valuation practices in property taxation in our economic development work, for trust and estate planning, to assist creditors and debtors in bankruptcy proceedings, in planning real estate transfers, in crafting easement and leasehold interests, and in assisting with project and construction financing for a wide variety of clients and industries, including:

Industrial and Commercial Properties
• Office buildings
• Medical office buildings and practices
• Factories
• Construction-related projects
• Pulp and paper facilities
• Shopping centers
• Restaurants

Residential Properties
• Multi-unit residential developments
• Condominiums
• Shorefront residential homes
• Properties enrolled in ME’s current land use programs

Energy
• Wind turbine generators
• Generator leads and transmission lines
• Biomass and renewable generators
• Hydroelectric and waste-to-energy generators
• Utility personal property assets

The team assists clients in revaluation and abatement disputes, and regularly appears before the ME State Board of Property Tax Review and through all levels of the judicial appeal process. We’ve developed unique systems that allow us to effectively and efficiently model expected and projected property tax liabilities, a critical need for both businesses and taxing authorities.