Ad Valorem Property Valuations on the Rise: Why Tax Reproration is More Important than Ever
Ad valorem property valuations have been on the rise in recent years, due to a number of factors, including:
- Rising property values: The overall value of real estate in the United States has been increasing steadily in recent years, due to a number of factors, including strong economic growth, low interest rates, and limited inventory. This has led to an increase in ad valorem property valuations, as assessors are required to base their valuations on the fair market value of the property.
- Increased tax rates: In some jurisdictions, tax rates have been increasing in recent years, in order to generate more revenue for local governments. This has also contributed to the increase in ad valorem property valuations.
- Changes in the tax code: The tax code has been amended in recent years, in ways that have made it more difficult for taxpayers to challenge their property valuations. This has made it more important for taxpayers to have a tax reproration agreement in place, in order to protect their rights in the event of an increase in their property valuation.
Tax reproration is a process by which a buyer or seller of commercial real estate can recover the difference between the ad valorem property valuation of the property and the purchase price. This can be a valuable tool for taxpayers, as it can help to offset the increase in property taxes that may result from a rising property valuation.
In order to be effective, a tax reproration agreement must be carefully drafted. The agreement should specify the terms of the reproration, such as the amount of the reproration, the time period for which it will be effective, and the process for calculating the reproration. The agreement should also be recorded with the county recorder, in order to ensure that it is enforceable.
Given the increase in ad valorem property valuations, tax reproration is more important than ever for commercial real estate buyers and sellers. By having a tax reproration agreement in place, taxpayers can protect themselves from the financial burden of an increase in property taxes.
If you are a commercial real estate buyer or seller, it is important to speak with an experienced lawyer about tax reproration. The experts at Tax Reproration Law can help you to understand your rights and options, and can draft a tax reproration agreement that is tailored to your specific needs.
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If you have any questions about tax reproration or would like to speak with an experienced member of the Tax Reproration Law team. We would be happy to help you protect your rights and ensure that you are fully informed about your options.