When a client’s commercial property tax bill appears higher than expected, it can affect both their bottom line and the property’s appeal to potential buyers. Understanding how assessors calculate property values can help you identify situations where a closer review might be worthwhile.
How do assessors determine value?
In Connecticut, towns generally calculate a property’s value based on its “Fair Market Value” at the time of the municipality’s last revaluation. This means the assessment usually links to that specific base year rather than adjusting with the market each year. Assessors typically set the assessed value at 70% of that fair market figure. The town then applies its mill rate to the assessed value to determine the property tax.
To keep assessments reasonably current, municipalities conduct revaluations every five years. During these cycles, assessors consider factors such as location, size, condition and recent sales of comparable properties.
What are common assessment mistakes?
Errors occasionally appear in assessor records. A review of a property’s field card can reveal issues that might influence the valuation, including:
- Incorrect square footage or outdated descriptions of building features
- Missing information about repairs or changes to the property’s condition
- Misclassification, such as listing an older industrial property as a premium facility
Providing supporting documentation, such as photos or recent appraisals, may help the assessor address these factual discrepancies.
How can a valuation be challenged?
If the valuation seems incorrect, you usually have a limited window to act. The process begins once you receive the assessment notice. You generally need to submit a formal appeal application to the local Board of Assessment Appeals by February 20 or by March 20 in years when the deadline extends.
It helps to follow this procedure carefully. Typically, a taxpayer cannot skip the local Board and go straight to court. However, for commercial properties with an assessed value exceeding $1 million, the Board may decline to hold a hearing. If the Board does not hear the appeal, the case might then move to Superior Court.
While pursuing an appeal, staying current on tax payments can help avoid potential penalties.
Supporting your clients
Knowing these timelines and procedures can enhance your value to clients. If a commercial property assessment seems particularly complex, suggesting that a client consult a commercial real estate lawyer, a local tax professional or appraiser may be a reasonable next step.