Tuesday, March 20, 2012

Do you need a valuation expert in Tennessee?

The question that often comes up for property taxpayers in Tennessee when trying to decide whether to appeal a property tax valuation: How much is it going to cost? A significant factor in determining cost is whether or not the taxpayer will need to hire a professional appraiser.

Many times, taxpayers will go it alone and offer their own personal opinion regarding the valuation of the property, but if there is an appraiser on the other side, that is probably not the best approach. Take, for example, the recent decision in In re Directors Common, LLC. In that case, the property manager testified about the condition of the building and his inability to obtain a tenant to lease the space. Based on his experience (which was not unimpressive), he concluded that the value of the property was $600K. The Assessor presented the testimony of a certified appraiser who prepared a report with comparable sales and an income analysis that the property was worth $1.6 million.
The assessor adjusted the valuation down slightly but favored the appraiser over the testimony over the property manager.

That is not to say that in some instances, no appraisal is needed, but administrative law judges in Tennessee tend to be persuaded by the numbers. Thus, if you want to put forward your best case and cost/benefit analysis makes sense, that oftentimes means engaging the services of a professional appraisal.

http://www.comptroller.tn.gov/repository/SB/judgeminsky/2012.03.09-DirectorsCommonLLC.pdf

You can also follow me on Twitter: @TNTaxLawyer.

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