Taxing Condos as Apartments Results in Property Tax SavingsVarious properties have changed to condominiums during the “condo conversion boom” a few years ago. Since then, many property owners have regretted their decision. The Property Tax Appeal Group, LLC (“P-TAG”), may have found a way for those property owners to at least reclaim some financial benefit from doing so.
Property Tax Appeals
Recently, P-TAG’s Barry Sharpe successfully obtained a sizeable property tax assessment reduction of $573,890 (representing a 28% drop) for one of its clients in Miami-Dade. The former property owner had converted a motel into separate condominium units. Despite the conversion, Sharpe argued to the Value Adjustment Board that the property should be taxed as if it were an apartment building…instead of as a condo, in order to obtain a reduction in real estate property taxes.
Property Tax Classification
P-TAG was able to argue in front of the County’s Valuation Adjustment Board (VAB) that the former motel property did not have much value as a condominium. Thus, its highest and best use was definitely not a condominium. In fact, there was only one condominium unit sold in the complex.
Condos vs. Apartments
Because the motel was not completely retrofitted and ready for its new use as a condo, Sharpe argued that it was unfair for the County to use comparable sales (“Comps”) of nearby condos to determine the property’s assessed value. As apartments are generally taxed at a lower dollar per square foot basis than condominiums, Sharpe filed a property tax appeal petition on behalf of its client, to demonstrate that the building should either be demolished or taxed as rental units.
This condo conversion project may have been a victim of bad timing, but at least the property owner obtained the benefit of a significant property tax reduction.
Source: The Property Tax Appeal Group
By: Barry Sharpe