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Taxable valuations of property art as much as science

On Behalf of | Jun 6, 2015 | Tax Law

Property tax valuation can be a contentious issue between taxing authorities and land owners. In some areas, such as tract residential housing, determining comparables and assessing value may be relatively straightforward, as there may exist thousands of identical or nearly identical properties, sometimes within the taxing district.

Other times, with other property, the competing methods valuation can lead to widely disparate results. A case from the Ohio Board of Tax Appeals involves just such a disparity. One assessment of the property came in at $9,850,000. A second assessor found the total true value to be $18,500,000. One could wonder if they were looking at the same building.

But they were, and the difference in approaches caused the massive differential. The building was used as a data center and had many “upgrades” that the client required for the property, including special entrances and windows, cooled sub-floors and fire control systems and battery backup facilities.

One assessor noted that while the property came with many special features, the building itself was useable for generalized office or warehouse purposes, and he used that to develop a valuation based on other comparables.

The second assessor looked across the nation, finding nothing exactly comparable determined it was unique, and what he did find led to his high valuation. The BTA agreed with the second assessment, finding the improvements were part of the property and not merely an element of particular one owner’s use of the property.

The large disparity has led to the case being appealed to the Ohio Supreme Court. As governmental entities attempt to maximize their tax revenue, all property owners should be vigilant when receiving tax assessments.

Source: Ohio Board of Tax Appeals, “BOARD OF EDUCATION FOR THE SOLON CITY SCHOOL DISTRICT, (ET. AL.), APPELLANT(S) v. CUYAHOGA COUNTY BOARD OF REVISION,” Case No(s). 2014-987, 2014-1029, Board of Tax Appeals, February 17, 2015