What counts as intangible value changes with the asset class, and so does how much of your price it represents. 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.
Every purchase price holds up to three kinds of value. Each is treated differently for tax purposes.
Which of these a purchase includes, and how much, depends on the property and the deal.
01
In-place leases, resident relationships, ancillary income contracts.
02
Brand affiliation, management agreement, trained workforce, the operating business.
03
In-place leases, anchor and national tenant relationships, avoided leasing costs.
04
In-place leases, tenant relationships, avoided leasing costs, service contracts.
Every asset class carries value that most states don’t tax as real estate, and separating it before closing keeps it out of the transfer tax and off every property tax bill after. Which value that is changes by type: a hotel’s brand and management agreement, a shopping center’s in-place leases.
Every ProperTax Appraisal™ is signed by two credentialed experts: an MAI (Member of the Appraisal Institute) for the real estate and a CPA/ABV (Certified Public Accountant, Accredited in Business Valuation) for the business value. Our PairedExpert™ approach puts both on one reconciled report, restricted to state and local tax use and typically issued about ten days before closing.
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.
A ProperTax Appraisal works for all commercial asset classes. Multifamily, office, retail, hotel, industrial, and data center transactions come up most often.
Properties that run as operating businesses, such as hotels, typically carry the most. Leased properties such as multifamily, retail, and office carry value in their in-place leases and tenant relationships.