Your purchase price can change a property’s taxes the day you close. RealAdvice® helps commercial real estate buyers pay only the taxes that they legally owe by separating non-taxable intangible value from taxable real estate at closing.
Start tax diligence when the letter of intent (LOI) goes out:
Complete these steps before the purchase and sale agreement (PSA) is signed, while the allocation can still be written into the contract:
Make sure the allocation is reflected in the closing documents:
Follow through on the first tax cycle:
It should cover the current tax bills and assessed value, how the county reassesses after a sale, any transfer tax, the value in the price that isn’t real estate, and how the price will be allocated in the PSA.
In many states, a sale triggers a reassessment, often starting from the price you pay. The seller’s bill reflects the old value, not the value you’ll be taxed on.
At the letter of intent (LOI) or offering memorandum (OM) stage, or before the purchase and sale agreement (PSA) is signed. Our report is typically issued about ten days before closing.
No. The ProperTax Process applies only to state and local tax (SALT). It doesn’t change your lender’s appraisal or your federal tax basis, and it’s separate from cost segregation, which is a federal income tax strategy.