Property taxes are determined through a tax assessment; a higher assessment means higher taxes.
Property assessments reflect the value of your property as of July 1 of the preceding year. In order to calculate your property assessment, assessors calculate your stabilized income over the past three years.
- If there are any abnormal variances, assessors adjust using industry averages.
- Assessors make allowances to deduct out furniture, fixtures, and equipment (FF&E); capital reserves; and business intangibles.
June-August: Assessment Requests for Information
Each year, usually in June or July, municipal assessors mail out Assessment Requests for Information (ARFIs), which help them calculate your assessment.
IMPORTANT NOTE: You typically have 60 days to respond from the date of request. If you do not respond to the ARFI within the specified time period, you may lose your right to challenge the assessed value, which is critical if you believe your property taxes are too high!
In 2020, it is crucial that you report your income and expenses up to July 1, 2020. If you don’t, the economic impacts of COVID-19 and the downturn in the oil & gas industry will not be properly reflected in your assessment.
October-November: Pre-Roll Period
“Pre-roll” is an informal, without prejudice, window of 30 days where assessment authorities offer hotel owners and their representatives an estimate of value for their upcoming assessment. At this point, the hotels’ representatives have an opportunity to consider the values, and if they are too high, they can have an additional conversation with the assessor in an attempt to lower the assessed value. As your property tax bill is based on your assessment, lowering your assessment lowers your property taxes.
If you wish to participate in the pre-roll in a given year, you must be authorized, which can take several weeks. It is recommended to apply for the pre-roll far in advance (i.e., August or September) by speaking with your property tax services provider.
Municipal Deferral Programs
Municipalities are required to balance the books every year, which means they cannot offer tax forgiveness to individuals or businesses. However, many municipalities have implemented a deferral program in light of COVID-19. Real estate services firm Altus Group is monitoring these deferral programs on their website.
If you have any property tax or assessment needs, you can call the Altus Group for personalized help: