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Thought for the day-- 42.7% of all statistics are made up on the spot. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9,

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Presentation on theme: "Thought for the day-- 42.7% of all statistics are made up on the spot. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9,"— Presentation transcript:

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2 Thought for the day % of all statistics are made up on the spot. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9,

3 2 Commercial Property Values & Taxes – 2011 Tax Year

4 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Presenting: Garth Bacigalupi is a graduate of Stanford University with a BA in Political Science. Garth served as a Governor-appointed member of the State Board of Equalization where for 10 years he heard tax appeals concerning commercial properties, land and residences. Garth is a 36-year resident of Arizona and has been an Arizona commercial real estate agent since He is currently a principal with Sage Tax Group, Arizona’s largest home-based property tax consulting firm, and works Maricopa, Yavapai and Coconino Counties.

5 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Topics Tax Year 2011 – Timelines: Values & Taxes. A Summary of the Valuation Process. A Summary of the Administrative Appeals Process. Small Claims Court & Tax Court. Tax Calculations: Full Cash & Limited. Your House.

6 More thoughts-- If you think nobody cares…try missing a couple of payments. Depression is merely anger without enthusiasm. Support bacteria…they’re all the culture some people have. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9,

7 6 What’s The Problem? Why Appeal?

8 This building had a 2009 value of $52,049,975 and paid property taxes of $896,338—not including parking structures and associated grounds. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9,

9 Tax DistrictPhoneRate/ Tax2008 Tax County Primary Tax $73,170.27$65, Educational Equalization Tax $24,412.24$0.00 CITY OF PHOENIX $56,592.69$47, State Aid Credit $0.00 Elderly Assistance $0.00 School District Tax DistrictPhoneRate/ Tax2008 Tax OSBORN ELEMENTARY $139,266.41$102, PHOENIX HIGH SCHOOL $167,968.95$154, COMMUNITY COLLEGE DIST $53,506.08$48, Primary Tax Totals Rate/ Tax2008 Tax $514,916.64$419, Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Primary Taxes set by government

10 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Tax DistrictPhoneRate/ Tax2008 Tax Flood Control $15,653.52$16, Central Arizona Water Conservation $11,451.00$12, Fire $652.70$ Library $4,042.20$4, Health Care $10,466.20$10, County Overrides $0.00 City Overrides $0.00 Secondary taxes set by taxing districts and issues voter approved.

11 Elementary School Overrides $34,249.90$39, High School Overrides $30,505.48$33, Community College Overrides $0.00 County Bonds $0.00 City Bonds $120,647.73$130, Elementary School A Bonds $79,939.43$43, Elementary School B Bonds $9,252.44$53, High School A Bonds $32,887.24$19, High School B Bonds $13,374.71$21, Community College Bonds $18,298.65$20, $381,421.20$406, Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Remainder of secondary taxes

12 Education$603, % City/County$250, % Assorted Districts$42, % $896, Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Taxes by category--$0.67 of every dollar goes to education.

13 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, The assessor reduced the 2010 value to $45,145,776—Sage appealed this reduced value based on income. Upon appeal the value was reduced to $25,278,315—with taxes falling to $546,988. This reduction led to a 2010 tax savings of $309,464!

14 When combined with the associated parcels: The 2010 full cash value of $60,438,293 including all parcels was reduced to $33,841,000, with total taxes dropping $1,124,904 to $732,284. This tax savings of $392,620 equals $4,362,444 in value when capitalized at 9%. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9,

15 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Timelines – Why 2011? Tax Year vs. Valuation Date. Valuation Notices Filing Deadlines Notices of Change, Error, Claim

16 Tax Year vs. Valuation Date. January 1, 2010 is the date of the 2011 valuation upon which the tax bill received in September of 2011 will be calculated. Yes, that is correct—there is a 21-month lag in time between the property’s valuation and issuance of the tax bill. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9,

17 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Maricopa County 2010 Calendar - Feb 12 th :Assessor mails 2011 values. April 13 th :Last day to file appeal. Jun-Oct 15th:Assessor meetings and SBOE hearings. Sept 30 th :Notices of Amended Value. Oct 25 th :Last day to appeal. Nov 1-21:Amended Value hearings. Dec 15 th :Tax Court deadline.

18 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Basis of Valuation & Appeal - Market. Cost. Income. Equity. By Statue.

19 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Cost – Computer Modeled. Actual Cost. Components.

20 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Market - Comparable Sales Similar Use Code Similar Age, Size & Construction Similar Market Area

21 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Income Previous 3 Years of Income. Rent Roll and Occupancy History. Dept. of Revenue Form 300. Cap Rates.

22 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Equity Similar Properties in Similar Market Areas Should Be Valued Similarly. Your Competitor’s Full Cash Values Do Matter.

23 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, By Statute - Shopping Centers. Special Use Properties. Trade Zones. Exemptions.

24 Think quick-- The early bird may get the worm, but the second mouse gets the cheese. 99 % of lawyers give the rest a bad name. A day without sunshine is like…night. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9,

25 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, The Administrative Appeal - Who Can Represent You Agency Authorization. Prepare Forms & Evidence. File Timely With Assessor.

26 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Meetings & Hearings - Assessor Meeting (A-level). State Board of Equalization (B-level - SBOE).

27 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Litigation - Tax Court. Small Claims Court. Cost & Time.

28 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Tax Calculations - Full Cash & Limited Values. Assessment Ratios. Limited Value. - Rule A - - Rule B -

29 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Ratios Residential: 10% Vacant land: 16% Commercial: 21% for 2011—110% more than residential.

30 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Mixed Ratios Properties with a larger than average building to land ratio, or with mixed uses, may qualify for a mixed ratio. By recent statute, a residence may qualify up to 40 acres for a 10% ratio.

31 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Tax Calculation FCV times ratio, divided by 100, times the secondary rate. Limited Value times ratio, divided by 100, times the primary rate. Total.

32 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Valuations The full cash value (FCV), by statute, equals market value. A statistical analysis allows a 16% leeway. The limited value can increase only 10% per year unless there is a significant change to the property.

33 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Your House - Is Your FCV Greater Than Your Purchase Price, or the Sale Price of Similar Homes in Your Neighborhood? Website: Maricopa County Assessor. Your Valuation. Neighboring Values, Square Footage, Lot Plat, Aerial. On-line Forms and Instructions.

34 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Summary Valuations and Appeals are becoming increasingly complicated. Evidence Must be as complete as possible. The deadlines are not negotiable. -and- The majority of properties appealed are valued significantly less than similar properties not appealed.

35 And finally-- Inside every older person is a younger person wondering what the hell happened. --and-- He who laughs last…thinks the slowest. Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9,

36 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Where to Get More Information Garth Bacigalupi: (480) Website: State Board of Equalization: (602) Website: Maricopa Assessor: (602) Website:

37 Sage Tax Group For Arizona Commercial Mortgage Lenders Association, February 9, Or go to -


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