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Reducing Taxes for Possessory Interest Properties

By Trevor McAmis | May 25, 2023

Reducing Taxes for Possessory Interest Properties

Posted by Trevor McAmis on May 25, 2023 8:00:00 AM

Welcome to Paramount Property Tax Appeal, your trusted partner in navigating the complex world of property taxes. We specialize in helping our clients reduce their property taxes by appealing their tax assessments.

Our team of experienced professionals is dedicated to providing personalized service and expert advice to ensure you pay only your fair share of property taxes.

In this article, we will focus on a specific type of property: Possessory Interest properties. We will delve into what they are, how they are taxed in California, and how we can assist you in appealing property taxes for these types of properties.

Understanding Possessory Interest

Possessory Interest refers to a unique type of property interest that arises when a private individual or entity has the exclusive use of publicly-owned, non-taxable real property. This can occur when private individuals, companies, or corporations lease, rent, or use federal, state, or local government-owned facilities and/or land for their own beneficial use. Examples of Possessory Interests include leases of public lands for private or business use, a boat dock built on a public lake or river, cattle grazing rights on Federal or State land, or private companies leasing government buildings.

In the context of property taxes in California, Possessory Interest properties are subject to taxation because the private possessor receives the services and benefits that other taxable properties enjoy, such as fire and police protection, schools, and local government services. However, the valuation of Possessory Interests differs significantly from other forms of property tax appraisal. It is the appraiser's job to value only those rights held by the private possessor, excluding the value of any rights retained by the public owner or any rights that will revert back to the public owner at the end of the term of possession. As a result, Possessory Interest assessments are normally less than fee simple assessments of similar, privately-owned property.

Navigating the taxation of Possessory Interest properties can be complex, but Paramount Property Tax Appeal is here to help. Our team has the knowledge and experience to ensure that your Possessory Interest property is assessed fairly and accurately, potentially saving you a significant amount in property taxes. In the next sections, we will discuss the impact of the COVID-19 pandemic on Possessory Interest properties and how we can assist you in appealing your property taxes.

The Impact of COVID-19 on Possessory Interest Properties

The COVID-19 pandemic has had a profound impact on all aspects of life, including the operation and valuation of properties in California. The state's stay-at-home orders and business restrictions, which began in March 2020 and were gradually lifted by February 2023, led to significant disruptions for many businesses and property owners.

Possessory Interest properties were not immune to these challenges. Many of these properties, such as those leased for business use, were directly affected by the shutdown orders. With businesses unable to operate normally, the beneficial use of these properties was significantly diminished, leading to potential decreases in their assessed value.

The Calamity Claim: A Lifeline for Possessory Interest Properties

In response to these unprecedented challenges, Paramount Property Tax Appeal took proactive steps to assist our clients. We identified an opportunity in the form of a Calamity claim, a provision in California property tax law that allows for a reassessment of property value in the event of a physical damage or destruction, such as that caused by a natural disaster.

While a pandemic does not cause physical damage in the traditional sense, we recognized that the government-mandated shutdown effectively "damaged" the ability of businesses to use their leased properties. This interpretation was a novel approach, and Paramount Property Tax Appeal was one of the few, and possibly the first, tax agent to identify and act on this opportunity.

Filing a Calamity claim allowed our clients with Possessory Interest properties to seek a reassessment of their property value, potentially leading to a significant reduction in their property taxes for the affected period. This action provided a much-needed lifeline for many businesses during a time of great uncertainty and financial strain.

At Paramount Property Tax Appeal, we pride ourselves on our deep understanding of property tax law and our commitment to fighting for our clients' interests. Our successful navigation of the Calamity claim process during the COVID-19 pandemic is just one example of how we put our expertise to work for you.

Why Choose Paramount Property Tax Appeal for Your Possessory Interest Property

Choosing the right tax agent for your Possessory Interest property is a critical decision. At Paramount Property Tax Appeal, we offer a unique combination of knowledge, experience, and a proven track record of success. Our deep understanding of property tax law, including the complexities of Possessory Interest properties, allows us to provide expert advice and effective solutions tailored to your specific needs.

Our success in identifying and filing Calamity claims during the COVID-19 pandemic demonstrates our innovative approach and commitment to our clients. While many tax agents overlooked this opportunity, we were proactive in seeking out all possible avenues to reduce our clients' property tax burden. This initiative resulted in significant tax savings for our clients at a time when they needed it most.

When you choose Paramount Property Tax Appeal, you're not just hiring a tax agent—you're gaining a partner who will fight for your interests and work tirelessly to ensure you pay only your fair share of property taxes.

 

Conclusion

Understanding and appealing property taxes for Possessory Interest properties can be a complex process, but it's an essential part of managing your property and financial obligations. The COVID-19 pandemic has highlighted the importance of having a knowledgeable and proactive tax agent on your side.

At Paramount Property Tax Appeal, we have the expertise and experience to navigate the complexities of Possessory Interest properties and property tax appeals. Our success in filing Calamity claims during the pandemic is a testament to our commitment to our clients and our ability to deliver results.

If you own a Possessory Interest property and want to ensure your property taxes are fair and accurate, we invite you to contact Paramount Property Tax Appeal. Let us put our knowledge and experience to work for you.

Frequently Asked Questions About Possessory Interest

  1. What is a Possessory Interest?

    A Possessory Interest is a type of property interest that occurs when a private individual or entity has the exclusive use of publicly-owned, non-taxable real property. This can happen when private individuals or businesses lease, rent, or use government-owned facilities or land for their own beneficial use.
  2. How are Possessory Interests taxed in California?

    Possessory Interests are subject to property taxes in California because the private possessor benefits from public services like fire and police protection, schools, and local government services. The valuation of Possessory Interests is typically less than fee simple assessments of similar, privately-owned property.
  3. How did the COVID-19 pandemic affect Possessory Interest properties?

    The COVID-19 pandemic led to significant disruptions for many businesses and property owners, including those with Possessory Interest properties. Government-mandated shutdown orders affected the beneficial use of these properties, potentially leading to decreases in their assessed value.
  4. What is a Calamity claim, and how can it help Possessory Interest property owners?

    A Calamity claim is a provision in California property tax law that allows for a reassessment of property value in the event of physical damage or destruction. During the COVID-19 pandemic, Paramount Property Tax Appeal successfully filed Calamity claims for clients with Possessory Interest properties, arguing that the government-mandated shutdown effectively "damaged" the ability of businesses to use their leased properties.
  5. Why should I choose Paramount Property Tax Appeal for my Possessory Interest property?

    Paramount Property Tax Appeal offers a unique combination of knowledge, experience, and a proven track record of success. We have a deep understanding of property tax law, including the complexities of Possessory Interest properties, and we have demonstrated our commitment to our clients through initiatives like our successful filing of Calamity claims during the COVID-19 pandemic.
  6. How can I contact Paramount Property Tax Appeal for assistance with my Possessory Interest property taxes?

    You can reach out to us through our website or by phone. We would be happy to discuss your specific needs and how we can assist you in appealing your property taxes.

 

We specialize in reducing your property tax expenses through appeals. Our services are free until we deliver a refund or tax savings – No Savings = No Fee. Committed to defending your rights, we take pride in the trust our clients place in us.

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