RECE valuations at center of property tax storm

BVWireIssue #169-4
October 26, 2016

During his conference session on real estate-centered enterprises (RECEs), Rob Schlegel (Houlihan Valuation Advisors, Indianapolis) mentioned a property tax case in California involving a luxury hotel that had its assessed value include the value of nontaxable intangible assets (click here for more details). “This is big stuff,” he said, referring to a growing trend by assessors of struggling to assess taxable assets and understand intangible assets, which are not subject to property taxes in some jurisdictions. They ignore the fact that a RECE, such as a hotel, gas station, or restaurant, is not just “dirt and buildings” but a combination of real property and intangibles. The intangibles need to be identified and valued so they can be adjusted for the property tax assessment. There are a variety of methods used by real estate appraisers with assumptions that are often questioned.

Schlegel made his remarks at a two-day conference in Atlanta co-sponsored by the Southeast Chapter of Business Appraisers (SECBA) and the International Association of Consultants Valuators and Analysts (IACVA).

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