Commercial Property Tax Payment – Required Even if Business no Longer Active?

[Nir]

Hi,

Do owners pay commercial property tax on business no longer active?

For example, you purchase an 8-Plex today with a retail/commercial space at ground level which is presently rented. 1 year from now the store is closed and you have no intention as the owner to rent out the store or due to economic situation you simply can not find a new tenant. (the resdiential portion - 8 apartments are still rented)

Should you apply to the city in order to recognize the situation and not pay TAX on the commercial portion, just the residential portion (the 8 units) since the commercial portion is not in use? Is it a simple process usually being approved by the city or is the opposite true – meaning in most cases the owner still has to pay tax on the commercial portion even if it is not is use?

THANKS,
Neil

 

[Thomas Beyer]

QUOTE (investmart @ Feb 19 2009, 09:20 PM) Hi,

Do owners pay commercial property tax on business no longer active?

For example, you purchase an 8-Plex today with a retail/commercial space at ground level which is presently rented. 1 year from now the store is closed and you have no intention as the owner to rent out the store or due to economic situation you simply can not find a new tenant. (the resdiential portion - 8 apartments are still rented)

Should you apply to the city in order to recognize the situation and not pay TAX on the commercial portion, just the residential portion (the 8 units) since the commercial portion is not in use? Is it a simple process usually being approved by the city or is the opposite true – meaning in most cases the owner still has to pay tax on the commercial portion even if it is not is use?

THANKS,
Neil
Taxes are based on assessment.

You can appeal (commercial or residential) tax assessments, arguing lower economic value due to recession and will likely get a reduction, but not to 0 ..maybe 20% ..

You have to pay taxes while assessment is being appealed.

 

[Nir]

Thanks Thomas,



By "maybe 20%" do you mean maybe 20% reduction or 20% of original tax (meaning 80% reduction!)?



assessment is being appealed - should I expect it to take around 3 weeks, 3 months or like 3 years?



Regards,

N.

 

[housedoc]

It may be possible to obtain a tax reduction based on extended vacancy, no?

 

[Thomas Beyer]

QUOTE (investmart @ Feb 19 2009, 11:24 PM) By "maybe 20%" do you mean maybe 20% reduction or 20% of original tax (meaning 80% reduction!)?

assessment is being appealed - should I expect it to take around 3 weeks, 3 months or like 3 years?
20% lower .. as I said .. an estimate .. maybe 10% .. maybe 35% .. it takes 6-12 months .. and you can appeal their decision .. faster in smaller towns

 

[Thomas Beyer]

QUOTE (housedoc @ Feb 20 2009, 06:00 AM) It may be possible to obtain a tax reduction based on extended vacancy, no?
taxes are based on assessment .. if you can make an argument that because of overall vacancies the property value is lower .. then yes .. but even a vacant building has value (land + structure + potential) ..