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Property Taxes Can Be Expensive But Time to Appeal May Be Limited

Many businesses, even individuals, don’t think about their property tax liability until the tax bill comes in the mail; and then it may be too late to do anything about it even if it is out of line.

Your property tax bill – whether it is for real property, like land and buildings, or for personal property such as business inventory, furniture and fixtures, or machinery and equipment – is based on the fair market value of that property. Louisiana Law defines fair market value at LSA-RS 47:2321.

“Fair market value is the price for property which would be agreed upon between a willing and informed buyer and a willing and informed seller under usual and ordinary circumstances; it shall be the highest price estimated in terms of money which property will bring if exposed for sale on the open market with reasonable time allowed to find a purchaser who is buying with knowledge of all the uses and purposes to which the property is best adapted and for which it can be legally used.”

Assessors use mass appraisal techniques to determine the fair market value of property. While this method of appraisal is valid in determining value, it is not a replacement for a specific appraisal and inspection of the individual property in question. Usually, businesses and individuals alike will simply pay the tax bill until they think it is too high, and then they call their assessor. Sometimes the assessor is able to help, but other times not. The appropriate time to challenge the assessment of property is when the assessor opens the assessment rolls for public inspection. The inspection periods vary by parish. It is only during that time that the assessor is obligated to review your assessment, if you question it. Once the inspection period expires, the assessor is under no legal obligation to change the assessment for that tax year, even if the assessment is wrong, though occasionally, the assessor may be persuaded to make a change if his market value of the property is significantly greater than the actual fair market value of that property.

It is not sufficient to tell the assessor that your taxes are too high. That’s because the assessor does not set the tax rate that determines the actual tax you will pay. Instead, the rate is set by the local taxing bodies, such as the city or parish council, the school board, the levee districts and other similar entities. If the value of your property is correct, but your tax bill is high, then it is the tax rate that is causing the high tax bill. Instead, the correct approach with the assessor is to provide an independent appraisal of the property that clearly shows the correct market value of the property. In other instances, there may be circumstances that might adversely affect the value of the property that the assessor’s office is unaware of, which, too, may be a justifiable reason to seek an adjustment in your assessed value.

Overall, the more professional and business-like approach you have when challenging your assessed value, the more likely you are to get a favorable result from your assessor.

If you have a question about your assessment and property taxes, please contact me at lec@chehardy.com to discuss your legal rights. I will review your property tax status in a free consultation.