Wednesday, February 17, 2010

$116,000 Property Tax Savings for 35 Acres

$116,000 Property Tax Savings for 35 acres

I left a voice message for Builder Bob about his property taxes then curled
up with the cats for a nap. I was deep into a good dream when I was awakened
by the phone. "I have 500 property tax statements. When can you come?".

I instructed Builder Bob to email his Property Ids. As I'm picking through
them I called Builder Bob. "I think you're business park land is overvalued".

"What business park? I only own residential land."

So I had to unravel the mystery.

An Outlot is created when you plat land and is typically one of two things:
1)a drainage pond, common area or some other unbuildable land; or 2)a future
phase of the development that has a preliminary plat that hasn't been
finalized and recorded.

Builder Bob's residential development had initially been an outlot that had
been broken off from the "The Business Park" and the legal description was
"Outlot E, The Business Park". When the plat was created the assessor didn't
look beyond the legal description so the land was mistakenly classified as
Commercial, even though it was zoned Residential and always had been. There
was a preliminary plat for 96 single family lots at the time the land was
classified as commercial.

Not only was it classified as Commercial, which can more than double the tax
rate, it was also valued as Commercial land. With 500+ parcels Builder Bob
missed this for 2008 and paid the ugly tax bill. But I caught it and
appealed for Pay 2009 and Pay 2010.

And the case was just settled at a property tax savings of $116,300.

Do you have any misclassifications lurking in your property tax statements?
They are more common than you might think

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