Property owned by a political Subdivision is exempt from taxation unless it is rented or leased for compensation to a private business enterprise. Entities renting or leasing from a political subdivision are subject to taxation under either a “possessory interest” assessment or a leasehold estate. Assessment practices can differ from State to State. Your lease and lease term can have a major impact on the amount of tax you will have to pay. Call Property Tax Associates, Inc. so that we may review your current assessment for you.
Factors to consider in getting your possessory interest assessment reduced
- What is the term left on the land lease?
- Is there a lease renewal option and what are the terms?
- Is the current lease in line with today’s market rental rates?
- Who holds the tax liability?
- How does the leasehold Value compare to the Fee Simple value?