When you buy a leased office building, part of the price pays for the leases and tenants inside it. 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.
Which of these a purchase includes, and how much, depends on the property and the deal. Rules vary by state.
Our PairedExpert™ approach pairs an MAI (Member of the Appraisal Institute) appraiser for the real estate with a CPA/ABV (Certified Public Accountant, Accredited in Business Valuation) specialist for the lease and business value. Both sign one reconciled ProperTax Appraisal™, typically issued about ten days before closing. The report is restricted to state and local tax use, so it doesn’t change your lender’s appraisal or your federal taxes.
The Florida Department of Revenue approved our methodology in 1991. Courts upheld it in the Disney rulings in 2018 and 2020, and it was vetted in federal bankruptcy court in 2022.
The owner usually benefits first. Under full-service gross leases, the owner pays the property tax and tenants typically cover only increases over a base year, so a lower bill improves net operating income (NOI) directly.
Yes, though a building with fewer leases in place has less lease value to separate. The free estimate shows what’s there before you commit to anything.
No. The ProperTax Appraisal is restricted to state and local tax use. It doesn’t change your lender’s appraisal or your federal tax basis.