T How To Be Successful With a Tax Appeal

A publication of the Bill Gladstone Group of NAI CIR
April 2012
How To Be Successful With a Tax Appeal
T
By George Clauser
The time of year has come when property
owners receive real estate tax notices for
the property or properties they own. In this
area, county and municipality tax bills are
mailed on March 1. The tax bills should
be in the hands of property owners or, if a
mortgage exists on a property, the tax bills
may go directly to the lender to be paid out
of the escrow account. On July 1, the school
districts will mail real estate tax notices
or bills to every property owner on record
within their respective districts. The school
district’s bill will usually get property owners’
attention because it is typically much larger
than the county and municipality tax bill.
On your tax bill, you will want to pay
particular attention to the portion labeled
assessed value. The total assessed value is
derived from both land and improvements.
For example, the land may be assessed at
$55,000 and the improvements at $136,200
for a total assessed value of $191,200.
The assessed value is the number the county
uses to estimate the value of your property
for tax purposes. Cumberland and Dauphin
Counties assess properties at 100% of
market value. The total assessed value
is multiplied by the millage rates of the
respective taxing authorities to determine
the real estate taxes for the property.
One of the single greatest available
opportunities for savings for property owners
is on their tax bill. The National Taxpayers
Union is credited with claiming that as much
as 60% of all property in America is overassessed. Over 95% of property owners
have no idea how to determine if they are
being overcharged.
Review the Property Record Card
Property owners who believe that their
property assessment is too high certainly
have the right to contact the County Tax
Assessment Office. Property owners can
review the information the county has on
file for their property prior to filing a formal
appeal.
With the large volume of properties that the
assessors handle, errors may be made. If
those errors are found and corrected, the
property could receive a lower assessment,
resulting in a lower tax bill. When looking at
your property records consider the following:
building size, building condition, room counts,
office size, bath counts, rail siding, and lot
size. The property records could contain
mistakes in any of these areas. Your building
size may be smaller than those shown on
the tax record cards. Buildings may be razed
and yet still be shown on the property record
cards. In addition, condition of the buildings
may not be accurate. Room counts, office
size and bath counts may differ. Rail siding,
which was once available along an industrial
facility may no longer exist. Lot sizes may
be recorded as larger than your actual lot.
(Continued on page 3)
Check Out Our Latest Video!
Bill Gladstone recently interviewed two local Central PA experts on medical office space.
Our experts for this segment were, Phil Guarneschelli, Senior VP and COO of Pinnacle Health
System (www.pinnaclehealth.org) and Timothy Kinsley, VP and COO of Kinsley Properties
(www.kinsleyproperties.com).
Video Talking Points Include:
• Build-to-suit projects
• Medical office space - issues that develop
• The developer's role
• Current medical space rates
• Trends for the future
To view the video, please visit www.YouTube.com/BillGladstoneGroup or scan the QR
code below with your smart phone.
In This Issue
1,3,5 Featured Article
2-7
Featured Listings
8
Recent Deals
717.761.5070 ext. 120
www.BillGladstone.com
[email protected]
www.naicir.com
N E W L I STIN GS
pCOMMERCIAL SALE - 1241 Peters Mountain Road,
Dauphin, PA Route 225
pCOMMERCIAL LEASE - 1306 N. Third Street, Harrisburg
2,666 SF available in this functional utility building for users in need
of storage/shop space or office/showroom space. Direct access to
Route 225/Peters Mountain Road and easy access to Routes 22/322.
1,168 SF available in this turn-key store front space. Join Midtown
Scholar, Broad Street Market and soon to be new home of Harrisburg's
Art Museum. Don't miss this opportunity to take part in Harrisburg's
urban revival.
pWAREHOUSE LEASE - 3401 N. Sixth Street, Harrisburg
pLAND SALE - Adams Drive, Lot 13, Hummelstown
Summit View Commerce Park
3,100 SF rarely found, small clean and functional warehouse flex
space at affordable price. Conveniently located along Sixth Street,
within 1.5 miles of I-81 Interchange with Exit 66 Downtown/Harrisburg.
pOFFICE SALE - 1707 S. Cameron Street, Harrisburg
17,396 SF property with 6,500 SF office and an adjoining warehouse
and two additional storage garages on-site. The office space and
storage garages will be vacated by the current occupant; the main
warehouse is leased by a strong credit tenant until September 30,
2015.
2.79 acres available in one of the last remaining pad ready sites in
Summit View Commerce Park. Site is ideal for office or flex users.
Approximately 250' frontage along Adams Drive.
pOFFICE LEASE - 2509 N. Front Street, Harrisburg
6,325 SF desirable riverfront location with on-site parking. Building
is practical for medical users but can also be renovated to suit
professional office users.
pCOMMERCIAL SALE - Confidential Property, PA
pOFFICE LEASE - 1201 Fulling Mill Road, Middletown
Up to 23,600 SF of suburban corporate office space for lease. Join
Mid Atlantic Corporate Federal Credit Union in this functionally
designed, well-maintained office facility with shared amenities and
quick access to PA Route 283. Also for sale with partial leaseback.
2
10,000 SF turn-key restaurant and bar for sale in Cumberland County,
PA. The restaurant is an established neighborhood staple, in operation
since 1985. Business only and use of liquor-license, no real estate
included in sale.
Information concerning these offerings comes from sources deemed reliable, but no warranty is made as to the accuracy thereof, and they are submitted subject to errors, omissions, change of price
or other conditions, prior sale or lease, or withdrawal without notice. All sizes approximate. NAI CIR, 1015 Mumma Road, Wormleysburg, PA 17043 PA License #RB024320A
CIR
Commercial Real Estate Services, Worldwide.
717.761.5070 l www.naicir.com
How To Be Successful With a Tax Appeal Furthermore, due to slow real estate activity
over the last 3-4 years, the property could
have recently been purchased under the
assessed value which also could lead to a
reduction in the assessment. Discrepancies
found in your favor may certainly reduce
your assessed value, which will result in a
lower tax bill. Simply taking the time to check
the information for accuracy and discussing
it with the assessment office representative
could lead to big savings. (Also, it never
hurts to be cordial and respectful while
you’re doing it.)
How Do I Know Whether or Not I Should
Appeal My Property Taxes?
The primary basis for an annual tax appeal is
based on the market value of the property in
question. Market value may be defined as:
The most probable price in terms of money
which a property should bring in a competitive
and open market under all conditions
requisite to a fair sale, the buyer and seller,
each acting prudently, knowledgeably and
assuming the price is not affected by undue
stimulus.
Implicit in this definition are the
consummation of a sale as of a specified
date and the passing of title from seller
to buyer under conditions whereby:
1. Buyer and seller are typically motivated.
2. Both parties are well informed or well
advised, and each acting in what they
consider their own best interests.
3. A reasonable time is allowed for exposure
in the open market.
4. Payment is made in terms of cash in U.S.
dollars or in terms of financial arrangements
comparable thereto.
5. The price represents the normal
consideration for the property sold
unaffected by special or creative financing
or sales concessions granted by anyone
associated with the sale.
(C.F.R. Part 34.42(g); 55 Federal Register 34696, August
24, 1990, as amended at 57 Federal Register 12202, April
9, 1992; 59 Federal Register 29499, June 7, 1994)
The question becomes, “Is the assessed
value of the property higher than the market
value of the property?” Put another way,
“Could I sell the property for more than the
assessed value?”
(Continued from page 1)
be followed during the appeal hearings. The
burden of proof lies with you, the appellant
or property owner, to prove your property
has been over assessed.
Fill out the typical 2-4 page form for the
tax appeal with the information requested.
Ordinarily, commercial, industrial, and
income producing properties will require
additional information—three prior years
of gross annual income and expenses for
the property. Gross annual income and
“Is the assessed value of the property higher than the
market value of the property?” Put another way, “Could I sell the
property for more than the assessed value?”
It should also be noted that in the case of
an assessment which includes both land
and building values, only testimony will be
accepted concerning the total value of the
property. The Board of Assessment Appeals
will not typically consider the appeal of either
land or building as separated from the total.
The Board will also not consider the assessed
value of the neighboring properties. The sole
matter at issue is the market value of your
property.
Proceeding with an Appeal if the Assessed
Value of Your Property Warrants an
Assessment Appeal.
Know and follow the rules. The rules and
regulations concerning appeals are provided
by each individual Board of Assessment
Appeals and are available online for each
individual county. Obtain a copy, read them,
and follow them. They will tell you when
appeals have to be filed, the place where
they have to be filed, the fees involved for
filing, and general rules that are expected to
expenses include: fixed expenses, such as
real estate taxes; fire insurance premiums;
and land rent, if applicable. Your variable or
operating expenses related to the property
will also be requested. Variable expenses
include: manager’s fees, leasing fees, heat,
and utilities—electric, telephone, advertising,
sewer, water, trash, gas, maintenance and
repair costs, and replacement reserves.
Leases and tenant rent rolls will be
requested, as well as who is responsible for
paying each expense category. Professional
appraisals are also requested and strongly
recommended. If the information is not
included on the appeal form, it will not
be included in any appeal or testimony
presented to the board.
Appraisal reports for presentations must be
compliant with all the rules and regulations
governing them. The reports must be
well supported, concise, easy to read,
understandable, and able to be presented
(Continued on page 5)
I N V E S T M E N T L I S TIN GS
pSALE - 1719 Walnut Street, Harrisburg
7,460 SF available with a low entry cost and historically stable income
stream. Perfect for a start-up investor looking to build a portfolio of
investment properties.
3
pSALE - 1826 Good Hope Road, Enola
30,114 SF Class A office building in Graystone Corporate Center
for sale. Steady cash flow and strong credit tenant all offered below
replacement cost. A 10-year lease term on a single-tenant NNN
leased property is guaranteed by Graystone Tower Bank. There is
essential access to all the Harrisburg MSA and visibility and signage
exposure to 73,000 vehicles daily on I-81.
C O M M E R C I A L L I STIN GS
pSALE/LEASE – 1161 Harrisburg Pike, Carlisle
3,024 SF freestanding retail/commercial building. Located just off
the Carlisle (Route 11) exit of the PA Turnpike (I-76). Ground-level
basement access in rear.
pSALE - 1416 Cumberland Street, Harrisburg
4,590 SF commercial building in residential neighborhood. First
floor - 2,610 SF includes 690 SF two car garage; second
floor - 1,980 SF includes 3-4 bedroom residence with den, living
room and full dining room. Ideal for the entrepreneur that wants
to have their residence above their office/commercial business.
Price reduced!
pSALE - 182 S. 2nd Street, Highspire
8,123 SF available in this great location and priced to sell! Building
can be used for any number of retail, personal service businesses or
flex-type uses. Location has ample off-street parking and easy access
to the PA Turnpike and Route 283.
pSALE - 402 N. 2nd Street, Harrisburg
3,304 SF available in this 100% leased - 5 unit residential property
in the heart of Harrisburg's downtown district. Close to Capitol
Complex, Strawberry Square and Restaurant Row.
pSALE – 1161-1181 Westminster Avenue, Hanover
20,466 SF available; 9,639 SF on lower level and 10,829 SF on
upper level. Restaurant/bar/banquet facility with a Restaurant Liquor
License is located on the edge of the South Hills Golf Club. 2,448 SF
residence included in the sale price. All existing furniture, fixtures and
equipment can be included. Price reduced!
pSALE - 5135 Jonestown Road, Harrisburg
5,337 SF building on 0.82 acres with office/showroom and shop/
warehouse space. 120’± of frontage along Route 22. Neighbors
include major retailers in the Paxton Towne Centre and Colonial
Commons. Over 22,000 cars daily on Route 22.
pSALE - 6110 Carlisle Pike, Mechanicsburg
pLEASE - 415 Market Street, Harrisburg
7,395 SF available on the 1st floor in the Harrisburg Transportation
Center. Reserved parking below deck at lower level and metered
spaces in front of building.
4
4,450 SF freestanding commercial building available in high-profile
location on the Carlisle Pike. The site is just under an acre, situated
as an outparcel to the Good Hope Plaza with Black N Bleu, Select
Medical Therapy, Worknet, Advanced Sash & Door and the Good
Hope Animal Hospital.
CIR
Commercial Real Estate Services, Worldwide.
Information concerning these offerings comes from sources deemed reliable, but no warranty is made as to the accuracy thereof, and they are submitted subject to errors, omissions, change of price
or other conditions, prior sale or lease, or withdrawal without notice. All sizes approximate. NAI CIR, 1015 Mumma Road, Wormleysburg, PA 17043 PA License #RB024320A 717.761.5070 l www.naicir.com
How To Be Successful With a Tax Appeal
in a timely manner. The quality of the report
can have a huge influence on the outcome.
Six copies of an appraisal report of the
property are requested for Cumberland
County and are to be delivered 10 days prior
to the scheduled hearing. Dauphin County
requires one copy of the report, which is
to be delivered 10 days prior to the hearing
with five other copies brought to the hearing
for delivery to the board members.
Once the information is provided to the
Board of Assessment Appeals, hearings are
typically scheduled for testimony. Usually
the property owner is given 20-day notice of
the scheduled hearing date. Whether or not
there is any flexibility in the date and time of
the hearing will depend on the workload and
scheduling of the board hearing dates. Due
(Continued from page 3)
market value of that property.
Conclusion
Testimony allocated for residential property
hearings may be 15-20 minutes, whereas
commercial, industrial and income-producing
properties allow about 30 minutes.
There are many decisions that have to be
made to be successful in the tax appeal
process. Certainly no one likes to pay more
taxes than they legally have to. Whether
you’re the owner of a single property, an
investor with a number of properties, or a
larger corporation, your potential tax savings
can be substantial reaching thousands
of dollars. The window of opportunity is
short for the appeal process. Successful
appeals can be rewarding and the revised
assessment will last until there is another
countywide assessment or you make
substantial changes to the property.
The burden of proof is on the person filing
the appeal and his or her representative(s),
which may include legal representation and
a Pennsylvania State Certified Real Estate
Appraiser.
There is no substitute for preparation, subject
knowledge, knowledge of comparable sales,
and income/expense information on the
subject property and comparables.
A key point to remember is that the board is
typically made up of people with real estate
knowledge, and the board members hear
About the Author:
"There are many decisions that have to be made
to be successful in the tax appeal process."
to the workload of most boards, hearings are
typically not rescheduled without a pressing
issue.
Pre-Hearing Preparations
Pre-hearing and pre-trial preparations have
the greatest impact on whether cases are
won or lost. Preparations usually involve
the property owner, the property owner’s
representative, an attorney, an appraiser,
and, at times, a Realtor.
Testimony at the Hearing
Recall that the pressing issue in any appeal
is whether or not the total property in
question was assessed higher than the
dozens of appeals. They may have heard
testimony on some of the sales or property
information that you are using—make sure
your information is verified and accurate. In
some of the more complex properties owned
by larger corporations, the board may hire
their own independent appraiser to defend
their property values.
Once the evidence is presented and crossexamination or questioned by the board,
a decision could be made instantly or the
board may seek additional information
before responding usually within a week or
so.
George Clauser is a graduate of
Lebanon Valley College with a
B.S. Degree in Economics and
Business Administration. He
established Clauser Real Estate
Appraisals in 1993. He has been
PA State Certified as a General
Real Estate Appraiser since 1991 and holds
the SRA Designation of the Appraisal Institute.
Types of appraisal completed include commercial,
industrial, residential, subdivision, farms,
appraisals for tax assessment appeals, estates
and litigation. Clients include area banks, mortgage
lenders, local governments, corporations, school
districts, homeowners, business owners and
attorneys. Clauser Real Estate Appraisals serves
Cumberland, Dauphin, Perry, Lebanon, Lancaster,
Adams and York Counties. George can be
reached at [email protected] or by phone at
717-737-7300.
O F F I C E L I S TIN GS
pLEASE – 208 N. Third Street, Harrisburg
250 - 4,542 SF turn-key office suites. Prime Central Business District
location facing the State Capitol. Multiple parking garages available
within 1 block.
5
pLEASE - 4823 East Trindle Road, Mechanicsburg
1,887 SF on the second floor, available immediately. Turn-key
condition with functional layout. Convenient location highly visible
from Trindle Road. Expansive lot with abundant on-site parking, over
6 spaces per 1,000 SF. Building has Verizon FIOS already in place.
Reduced rate for first lease year!
O F F I C E L I S TIN GS
pSALE - 27 Miller Street, Lemoyne
Price reduced by $115,000 for this attractively remodeled office
building. 15,000 SF available with 30 off-street and eight street
parking spaces in front of the building.
pLEASE - 3 Tyler Court, Carlisle
1,200 - 2,792 SF of shell space available. This office space is available
in Carlisle's office and medical office corridor. 41+/- parking spaces
in common. Located next to an orthodontist office. Permits insurance
agencies, photographic studios, medical or clinical facilities and
hospitals.
pSUB-LEASE - 4700 Westport Drive, Mechanicsburg
3,000 - 7,747 SF available in this sub-lease opportunity for office
space with high-end finishes below market rates. The space is well
designed for a regional headquarters with its large training room and
full service kitchen. Easily accessible to Route 15 and the PA Turnpike.
pLEASE - 130 State Street, Harrisburg
955 SF available on the third floor. Located in the CBD along State
Street leading to the steps of the Capitol Complex. Ideal for lobbyists,
attorneys or other professionals who visit the City frequently. Turn-key
condition and offered at a competitive full-service rate.
pLEASE - 3425 Simpson Ferry Road, Camp Hill
The Pennsylvania Center
pSALE/LEASE – 210 Walnut Street, Harrisburg
21,600 SF building in CBD. 5,072 SF available for occupancy, rest
of the building is leased. Just a few steps from the Capitol Complex,
Strawberry Square and Restaurant Row. Price reduced!
6
2,147 SF attractive office space with great perimeter window lines
designed for professional users. Ample parking on-site and easy
access to Route 15, Route 581 and the PA Turnpike (I-76). Banks,
restaurants, shopping and convenience stores close-by.
Information concerning these offerings comes from sources deemed reliable, but no warranty is made as to the accuracy thereof, and they are submitted subject to errors, omissions, change of
price or other conditions, prior sale or lease, or withdrawal without notice. All sizes approximate. NAI CIR, 1015 Mumma Road, Wormleysburg, PA 17043 PA License #RB024320A
CIR
Commercial Real Estate Services, Worldwide.
717.761.5070 l www.naicir.com
I N DU S T R I A L L I S TIN GS
pLEASE - 2404 Gettysburg Road, Camp Hill
52,000 SF clean, functional warehouse space for distribution or
manufacturing. Located within 1 mile of Route 11 & 15 and Route 581,
providing quick and easy access to I-76, I-83 and I-81.
pSALE - 806 S. 28th Street, Harrisburg
8,332 SF masonry warehouse with fenced dock area. Convenient
location with easy access from I-83.
L A N D L I S TIN GS
LOCATION
ACRES
ZONING
TYPE
4850 Woodland Drive, Enola, Cumberland County
.79
Commercial General
Sale
5140 Jonestown Road & 4 Carolyn Street, Harrisburg, Dauphin County
1.23
Commercial General
Sale
260 N. Hershey Road, Harrisburg, Dauphin County
1.57
Commercial
Sale
4801 Union Deposit Road, Harrisburg, Dauphin County
1.74
Office
Sale
Pending - Milroy & Grayson Roads, Lot 16, Hummelstown, Dauphin County
1.92
Manufacturing District
Sale
Wildwood Park Drive, Harrisburg, Dauphin County
2±
Commercial (good restaurant site)
Sale
East Cumberland Street (Route 422), Lebanon, Lebanon County
2.2
Commercial
Sale
Route 15, Dillsburg, York County
2.29
Mixed Use Center District
Sale
Pending - 6402 Carlisle Pike, Mechanicsburg, Cumberland County
2.47
Highway Commercial Zone
Sale
Pending - 856 Century Drive, Mechanicsburg, Cumberland County
2.78
General Commercial District
Sale
New Listing - Adams Drive, Lot 13, Hummelstown, Dauphin County
2.79
Manufacturing District - Limited
Sale
Union Deposit Rd. & Antonio Dr., Lots #2-8 Harrisburg, Dauphin County
3.28
(R-1) Residential-Low Density
Sale
430 Station Road, Grantville, Dauphin County
5.06
Rural Agriculture
Sale
Good Hope Road Unit #3, Enola, Cumberland County
5.25
Office
Sale
Samuels Drive, Carlisle, Cumberland County
7.47
High Density Residential & Village District
Sale
Route 22 & Route 39, Harrisburg, Dauphin County
7.7 (6 lots)
Commercial Highway/Office
Sale
2300 Linglestown Road, Lot #1B, Harrisburg, Dauphin County
9.37
Commercial Highway District
Sale
Eisenhower Blvd., Harrisburg, Dauphin County
10±
General Commercial
Sale
Peters Mountain Road, Halifax, Dauphin County
12.75
No Zoning in Halifax Township
Sale
4220 Linglestown Road, Harrisburg, Dauphin County
12.9
Commercial
Sale
7700 Derry Street, Harrisburg, Dauphin County
13.62 (7 lots)
Commercial
Sale
Carlisle Pike (Route 11) Waterford Square, Mechanicsburg, Cumberland County
16.31 (13 lots)
Commercial
Sale
Pending - Knight's View Road, Wrightsville, York County
53.98
Residential
Sale
Pending - 100 N. Hershey Road, Harrisburg, Dauphin County
34±
Neighborhood Commercial
Sale
4600 Carlisle Pike, Mechanicsburg, Cumberland County
1.15
Commercial Limited
Lease
Pending - Milroy & Grayson Roads, Lot 17, Hummelstown, Dauphin County
1.72
Manufacturing District
Sale/Lease
6325 Chelton Avenue, Harrisburg, Dauphin County
3.75
Business Campus
Sale/Lease
1170 Harrisburg Pike, Lots 4-5, Carlisle, Cumberland County
1.54 & 1.38
Commercial
Lease
Stoverdale Road & Middletown Road, Hummelstown, Dauphin County
2.32
Neighborhood Commercial
Lease
Pending - Harrisburg Pike & PA Turnpike, Carlisle, Cumberland County
2.66
Commercial Highway
Lease
CIR
Commercial Real Estate Services, Worldwide.
717.761.5070 l www.naicir.com
Information concerning these offerings comes from sources deemed reliable, but no warranty is made as to the accuracy thereof, and they are submitted subject to errors, omissions, change of
price or other conditions, prior sale or lease, or withdrawal without notice. All sizes approximate. NAI CIR, 1015 Mumma Road, Wormleysburg, PA 17043 PA License #RB024320A
7
p SOLD
p LEASED
p LEASED
1515 Commerce Avenue,
Carlisle
4700 Westport Drive,
Mechanicsburg
Capital West Business Center
875 Poplar Church Road,
Camp Hill
This property was purchased by a
dealer from 5 - Star Truck Sales, Inc.
They will do sales and servicing of
trucks at this location.
The Bill Gladstone Group of NAI CIR
marketed the building and represented
the seller at closing.
Visual Sound has leased 6,063 SF
at the Capital West Business Center.
David Rudy of the Bill Gladstone Group
of NAI CIR represented the landlord.
HS Mediplex has leased space to
DeArment Endocrinology, a micro
medical practice, on a long-term lease.
The 81,708 SF building is owned and
managed by Kinsley Properties, based
in York, PA. The Bill Gladstone Group
of NAI CIR represented the tenant
Rene´ DeArment.
NAI CIR
PO Box 8910
Camp Hill, PA 17001-8910
PHONE:717.761.5070
www.naicir.com
www.BillGladstone.com
BILL GLADSTONE, CCIM, SIOR
PRESORTED STANDARD
U.S. POSTAGE PAID
Harrisburg, PA
Permit No. 783