How Much Will a Property Tax Assessment Appeal Cost for Commercial Properties?

We have written a series of blog articles dealing with property tax assessments.  Since the final reassessment notices have gone out in the past few weeks, I have talked with a number of people about appealing their assessments.  Two questions come up in every conversation. They are:

1. Do I need to get an appraisal of my property?
2. How much will this cost?

For a commercial or industrial property, you nearly always need an appraisal in order to reduce your assessment.  I have spoken with a number of commercial real estate appraisers, and even former members of assessment appeal boards. They (and I) believe that the Assessment Appeal Board will not even consider reducing the assessment of a commercial or industrial property without an appraisal report from a qualified commercial real estate appraiser.

Real estate appraisers are not permitted to work on a contingent fee basis. They should provide a flat fee or at least a good estimate before they start their work.  Some of the commercial appraisers here in Lancaster County that I have spoken with expect to charge around $3,000.00 and $4,000.00 for a typical commercial appraisal.  This could be more, if the property is complex or has a number of different kinds of commercial activities.  Some appraisers will perform a preliminary evaluation.  If the preliminary evaluation shows that the new assessment is accurate, the appraiser will only charge a portion – usually half — of this fee.

At Russell, Krafft & Gruber, LLP, we can provide this appeal work on a contingent fee basis in most cases.  For a “typical” commercial or industrial property tax assessment appeal, our fee will be fifty percent of the total tax savings for the first year of reassessment.

Remember, the next countywide reassessment will not happen for at least ten years.  Some of the property owners I have spoken with in the last two weeks will have increases of $100,000.00 or more in their property taxes over this period.  Getting an appraisal for $3,000.00, or even a preliminary evaluation for $1,500.00, combined with a contingent fee to pursue an appeal could be a good investment for today and the next ten years.

Aaron Marines is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University and practices in a variety of areas including Commercial Real Estate, Land Use, Land Planning and Zoning matters.