Property Types We Represent
Paramount Property Tax Appeal represents you through every stage of the appeal, from initial review through hearing. We handle all types of real property in California, Colorado, Texas, Nevada, and Arizona:
- Hotels
- Retail Shopping Centers
- Single Family Residences
- Apartments
- Office
- Industrials
- Self-Storage
- Gas Stations
- Hospitals
- Assisted Living Centers
- Golf Courses
Paramount Property Tax Appeal currently represents 30 golf courses in California. To learn more about our services, watch this video.
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Types of Property Tax Appeals in California
With few exceptions, California recognizes two primary categories of appeal. Possessory interest cases follow a separate valuation framework.
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01
Decline in Value
- Proposition 8 requires the County Assessor to assign each property either its Proposition 13 trended value or its current market value as of January 1, whichever is lower.
- The process does not establish a new factored base year value, so your tax liability may rise again in subsequent years after a successful appeal.
- These appeals typically apply to a single year.
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02
Base Year Appeal
- These appeals address newly assessed values that arise from a change in ownership or new construction.
- Owners must file within 60 days of receiving a supplemental bill. Filing after that window can reduce the refund available.
- Unlike a Proposition 8 appeal, a base year appeal establishes the factored base value that carries forward through the ownership history. Assessors frequently set that value above the actual purchase price or the true cost of new construction.
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03
Possessory Interest
Possessory interest applies to businesses that lease government land for private use. A business operating at a city owned airport holds a possessory interest, and the valuation process for these properties is unique and complex.
Valuation uses the three conventional approaches: sales comparison, income, and cost. Each approach must account for the fact that the property reverts to the public owner at some point. That reversion value must be removed so the taxable value reflects only the lessee’s portion of interest.
The most common possessory interest is a lease of land or improvements from a public owner. The public owner typically charges rent on a dollar per square foot basis, or requires a percentage of the lessee’s revenue or income.
For these leases, the direct income approach applies. The method discounts economic rent across the full lease term to net present value, less expenses paid by the public owner. Calculating the net present value of that income stream isolates the lessee’s portion of value, which makes a separate reversion adjustment unnecessary.
Example
- Five year lease for a 1,000 square foot office
- Rent of $3.00 per square foot per month
- Net lease, with the lessee paying all expenses
- Discount rate of 10 percent for the income stream, based on recent market data
- Expense deduction of 3 percent for the lessor’s administrative expense
Possessory Interest Valuation $3,000 Monthly rent × 60 Five years, 60 months $180,000 Total contract rent − $5,400 Lessor administrative expense, 3 percent $174,600 Net income to lessor × .607789 Net present value factor, five years, 10 percent discount rate, monthly payment $106,120 Indicated value of possessory interest Possessory interest properties are among the more complex assignments in property tax. To discuss your specific situation and the options available, contact us.
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Paramount Property Tax Appeal significantly reduced my tax bill. Their constant communication and expertise made the tax appeal process painless for me.