New Construction Base Year Value Enrollment
A Property Tax Case Study
The Case
Reducing a base year value assessment 34% below construction costs. As with any client that is growing, Haws Consulting Group is often called upon early in the planning and construction process to help develop a budget of property tax liabilities. This budget will be used across departments and needs to be continually adjusted as changes are made to the building. Additionally, any cost overruns, change orders and new developments must also be adjusted to reflect a current potential tax liability. Our client asked Haws to jump in early and develop a budget. As planning and construction proceeded, we reviewed cost segregation reports and construction invoices to determine an accurate value for the building for real property valuation purposes.
The local assessors office also gathers their own data and develops a parallel value which they can control and enroll at their will. This can have a significant financial impact on any budget forecasting and final valuation. Haws Consulting Group works closely with the Assessor’s Office Real Property and Personal Property personnel to make sure that numbers being used are controlled by us. We want any final value that is enrolled to be expected and not a surprise for the client.
After final construction was completed, we took our assessable cost information to the Assessor and was able to negotiate a final valuation that was significantly lower than the actual cost to construct the building. We took into account every aspect of the property tax code and assessment practices to deliver a valuation that was 34% below the actual construction cost of the building.
Results:
With a valuation that was 66% of the construction costs, we were able to save our clients hundreds of thousands of dollars a year in property taxes. Over a 10 year period this will keep millions of dollars of taxes in the bank for our clients that might have been wasted. Needless to say they were pleased with the results. Hiring Haws Consulting Group brought true value to the bottom line and they continue to use our services to this day.
