Your purchase price can set your tax bill for years. 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.
In many states, the price you record at closing becomes the starting point for your property tax assessment. In states with a transfer tax, that same number sets what’s due at closing. The price of an operating property covers more than the building and the land. It also covers intangible value, such as in-place leases, business operations, and goodwill, which most states do not tax as real estate.
Unless that value is separated before closing, it can be taxed as if it were bricks, sticks, and dirt. That happens first on the transfer and then on every property tax bill that follows. Most buyers have never been told to ask the question.
The best time to address property and transfer taxes is before the purchase and sale agreement (PSA) is signed. Once the deed records a single price, that price tends to follow the property. RealAdvice works best when we’re brought in at the letter of intent (LOI) or PSA stage. Our report is typically issued about ten days before closing.
We solve your property and transfer tax problem at the closing table.
Todd D. Jones, MAI, CRE, FRICS, Chief Executive Officer
These four questions show whether a deal is worth a closer look:
Our team of experts handles each phase, from the letter of intent (LOI) to your first tax bill.
01
TRANSACTION
02
VALUATION
An MAI appraiser and a CPA/ABV business valuation specialist each sign one reconciled report. It’s typically delivered about ten days before closing.
ABOUT THE DUAL-SIGNED APPRAISAL
03
CLOSING ASSISTANCE
Before closing, we review the settlement statement and any required state forms, so the
allocation carries through to the deed and the transfer tax.
04
FINALIZATION
After closing, we confirm the sale recorded correctly and review your first tax notice. If an
appeal is needed, we handle it at the administrative level.
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.
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.
TRANSACTION CONSIDERATION ANALYZED
IN FIRST YEAR TAX SAVINGS FOR CLIENTS
STATES WHERE CLIENTS CAN BENEFIT
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.
It divides a property’s purchase price among real property, tangible personal property, and intangible value. For state and local tax, it keeps intangible value from being taxed as real estate.
Most local governments multiply the assessed value by the local tax rate. After a sale, many assessors, the local officials who set a property’s assessed value for tax, treat the recorded price as evidence of market value. That’s why the price you pay can shape your assessment in the years that follow. Rules vary by state.
Yes. You pay only taxes that you legally owe. The Florida Department of Revenue approved the methodology in 1991. Courts upheld it in the precedent-setting Disney rulings in 2018 and 2020, and it was vetted in federal bankruptcy court in 2022.
Look for experts who can defend the valuation if it’s questioned. That means an MAI appraiser for the real estate, a CPA/ABV for the business value, and a report restricted to state and local tax. Ask about the advisor’s record with regulators and courts. Every ProperTax Appraisal is signed by both an MAI and a CPA/ABV.