Taxing Condos as Apartments Results in Property Tax Savings

January 26, 2011

Taxing Condos as Apartments Results in Property Tax Savings

Property Tax Appeal GroupVarious 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

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