By: Mitch Wilson, Senior Manager – Property Tax
A large number of Connecticut municipalities have conducted reassessments on commercial properties as of the Grand List Date, October 1, 2022. Connecticut municipalities reassessing for GL2022 previously reassessed as of October 1, 2017. Notices containing the proposed new values started to be mailed out in October and will continue throughout November. The notices of value include opportunities to attend informal appeal hearings with the reassessment companies, sometimes in conjunction with the respective local assessor’s office, to discuss the proposed assessment which is representative of 70 percent of the property’s fair market value. For commercial real estate owners and investors, this is a crucial time to appeal your entire Connecticut portfolio’s reassessed values, as it often presents the best opportunity to negotiate a lower value. During this process it is imperative to partner with an experienced property tax consultant who can assist in navigating both the historical nuances of the area and changes in the Connecticut property tax landscape as local taxing authorities are looking to recover from a pandemic market.
Invoke Tax Partners has a multifaceted approach that allows our experts to derive a holistic reduction strategy that is unique to each Connecticut property. This approach gives our clients the best opportunity to negotiate and resolve proposed assessments that exceed market levels during the informal appeal process. Our property tax consultants review all new proposed assessments using current P&L performance, recent market lease and sale comps, and full equalization reviews of similar and like-properties. This review allows us to arrive at an independent indicated market value relative to each property in the municipality it is located and to each unique market the property competes in.
It should be noted that even if a property’s assessment has not increased substantially or changed very little since its last reassessment five (5) years ago, an informal appeal is typically the best first step if the property or market conditions warrant a lower value. In this case the impact on market values from the COVID-19 pandemic has likely not yet been considered and is a crucial piece of both reassessment valuations and reduction strategies.
Once the informal appeal process concludes, there is an opportunity to file a formal appeal of the assessment to the Board of Assessment Appeals (BOAA) by February 20, 2023, in the municipality where the property is located. Some municipalities may also extend the BOAA filing deadline to March 20, 2023. Appeal forms should be available on the respective assessor’s office website as the deadline approaches. BOAA appeal hearings will typically occur in mid-to-late spring for commercial properties. Once an appeal to the BOAA has been filed, after a decision has been rendered following a hearing or decision by the BOAA to not hold a hearing (as is its right if the property’s assessment exceeds a $1,000,000), the next level of appeal is filing a protest to the Connecticut Superior Court. Appeals to the Superior Court will involve, at a minimum, engagement of Counsel. Invoke Tax Partners has teamed with multiple well-regarded litigation firms over many years resulting in significant savings on behalf of our clients. Because of the significance of this year’s reassessment, we expect to see an increase in commercial property reassessment appeals being heard at the Superior Court, making partnership with an experienced property tax firm an integral part of successfully navigating the appeals system.
In addition to all Connecticut commercial properties being reassessed this year, Invoke Tax Partners also recommends a review of all properties reassessed in the prior 3-4 years that were not appealed to the BOAA. These properties should be reviewed for possible BOAA appeal in early 2023. If such a property was already appealed and resolved, there are limitations and requirements for any possible additional appeal. It should be noted that a municipality’s BOAA formal filing deadline is State-mandated, and no extensions are available.
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Because the Connecticut reassessment system is complex and presents commercial property owners with unique opportunities both in and out of reassessment years, our Connecticut team recommends a complete portfolio review with one of our experts to determine the full extent of reassessment savings opportunities statewide. Contact our New England property tax office today to ensure your Connecticut reassessment appeal strategy is optimized for maximum value and property tax savings.