Monday, September 16, 2013

Downtown Miami historical landmark building given a property tax reduction of 50.81%

The County taxes based on the Highest and Best Use (HBU) of a property.  This gives the property owner an incentive to build upon and improve their property.  

The historical building with retail on the first floor and 16 additional floors above the building, is taxed at its HBU; but at the same time, is prevented from maximizing its full potential, due to its historic designation.  An inherent benefit in owning real estate is having the ability to demolish it at the end of its economic life.  This is not possible at this property.

The property owner should not be the only one absorbing the entire cost of owning a property which benefits the County as a whole, due to its historic designation.  It suffers economically by being surrounded by more modern buildings.     

This was the argument presented to the Special Magistrate at the Value AdjustmentBoard (VAB) hearing in order to obtain a 50.81% building reduction on their 2012 property tax bill.   This was a $2,039,700 assessment reduction  granted ($4,014,375 – 1,974,675 - $2,039,700. 

Why would any property owner ever want to purchase a historical building and take a loss on his investment?  After all, they are not operating a charity.    

By having been granted the property tax reduction, now the entire County is indirectly subsiding historical buildings.   

Property Tax Appeal Group was able to present this evidence elements and used other approaches in order to reduce the taxes.

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