Tax Appeals for Commercial Properties

What Every Commercial Property Owner Needs to Know

As a commercial property owner in Cook County, you know that property taxes can be a significant expense. If your property is assessed at a higher value than it should be, you could be paying more than your fair share. The good news is that you have the right to appeal your property tax assessment and potentially lower your tax bill.

But commercial property tax appeals are a bit different from residential appeals. They involve specific factors like income capitalization, depreciation, and comparables—all of which can be confusing for property owners who aren’t familiar with the process.

In this post, we’ll break down the tax appeal process for commercial properties and explain the key concepts that can help you successfully lower your property taxes.

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What Is a Property Tax Appeal for Commercial Properties?

A property tax appeal allows you to challenge your property’s assessed value—the value the county has determined for your property. This value is used to calculate how much tax you owe. If you believe your property’s assessment is too high, you can file an appeal with the Cook County Assessor’s Office or the Cook County Board of Review.

Commercial property owners often face the challenge of high assessments, especially if the property has unique features or fluctuating income. That’s why it’s essential to understand the specific methods used to assess commercial properties, so you can build a solid case for lowering your assessment.

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Key Factors in Commercial Property Assessments

When assessing commercial properties, the county uses several methods to estimate the value of your property. Here are the most common ones:

1. Income Capitalization Approach

For income-producing properties like office buildings, shopping centers, and apartment complexes, the income capitalization approach is one of the most important factors used in the assessment. This approach calculates the value of the property based on its income-generating potential.

The assessor looks at the net operating income (NOI) of the property, which is the income left over after deducting operating expenses like maintenance, property management fees, and utilities. This income is then capitalized using a capitalization rate, which is based on the risk and return of the property type.

Why it matters: If your property’s income has decreased due to vacancy, lower rental rates, or other factors, your property’s assessed value may be too high. By showing the true income potential of your property, you may be able to reduce its assessment and lower your taxes.

2. Depreciation

Depreciation can affect the market value of a commercial property, but in Cook County, it’s not automatically factored into property tax assessments. Instead, elements like age, condition, and functionality may need to be supported by an independent appraisal. 

If your commercial building is older or has outdated systems, an appraisal can help demonstrate how those factors impact its market value and saleability. 

Without this kind of documentation, the county may assign a value that doesn’t reflect your property’s real condition—causing you to overpay. An accurate appraisal can strengthen your appeal and help support a lower assessed value.

3. Comparable Sales (Comps)

Just like residential properties, commercial properties are often assessed using comparable sales, or “comps.” This means the county looks at sales of similar commercial properties in your area to determine your property’s value.

However, the challenge with comps for commercial properties is that no two properties are exactly the same. Factors such as location, size, building age, and tenant quality can all make a huge difference in the market value of a property.

Why it matters: Finding the right comps is crucial to showing that your property has been over-assessed. You’ll need to make sure you’re comparing your property to others that are similar in terms of income, location, and condition. A skilled Cook County property taxes Attorney can help guide you in this analysis.

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How to Appeal Your Commercial Property Tax Assessment

Now that you understand the key factors that affect your commercial property’s assessment, let’s go over the steps to file a tax appeal.

1. Gather Evidence

The first step in filing a commercial property tax appeal is to gather evidence. This will include:

• Income and expense reports for your property, showing the net operating income.
  
• Sales data for comparable properties in your area that show lower values.
  
• An independent property appraisal that reflects the true market value of your property.
  

This evidence will be crucial in making your case that your property has been over-assessed.

2. File Your Appeal

You can file your appeal online through the Cook County Assessor’s Office or the Cook County Board of Review. The process includes submitting your evidence and explaining why you believe your property’s assessment should be lowered.

Be sure to follow the filing deadlines, which are typically within 45 days for your assessor and 30 days for the Board of Review.

3. Present Your Case

If you want the opportunity to present your evidence in person, you must request a hearing when you file your appeal with the Board of Review. If a hearing is granted, you’ll be able to explain your case directly and answer any questions about your evidence. Having an experienced property tax attorney with you at the hearing can be extremely helpful in presenting your case clearly and effectively.

4. Wait for the Decision

Once the hearing is over, the Board of Review will issue a decision. If they agree that your property is over-assessed, they will issue a revised assessment with a lower value. This will result in a reduced tax bill for the following year.

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Why You Should Work With a Cook County Property Taxes Attorney

Commercial property tax appeals are complex and require specific knowledge of the assessment methods used by the county. If you’re unsure how to gather the right evidence or navigate the appeal process, it’s a good idea to consult a Cook County property taxes Attorney.

An experienced attorney can help you:

• Identify and present the most effective evidence.
  
• Analyze comparable properties.
  
• Ensure that income capitalization are properly accounted for in your assessment.
  
• Represent you at the hearing if necessary.
  

At Aaron Fox Law, we focus on helping commercial property owners like you lower their property tax assessments and reduce their tax burdens. If you think your commercial property has been over-assessed, contact us today for a free consultation.

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Conclusion

As a commercial property owner, overpaying on property taxes can be a significant financial burden. But by understanding the key factors that go into your property’s assessment—like income capitalization, and comparables—you can make a strong case for a lower tax bill. With the right evidence and experienced help, you can successfully appeal your property tax assessment and save money. Contact a Cook County property tax Attorney today to get started.