How do you predict taxes on new development when they have not yet been assessed?
Anyone want to chime in on how to best estimate this?  I know what the construction permits say.  I know what we paid.  I know what its worth in the market (though obviously this changes quickly during lease up). 

How do you all balance having a competitive tax estimate for leasing vs not totally nailed if you are too low during reconciliation?  I understand the tenants have to pay this, and its not totally our problem but obviously we want good relationships with tenants too.  

Just trying to be as accurate as possible and wonder how other folks do it.

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edit-  made some calls and I apparently should call the county and just talk to them about this.  Thanks all.  Leaving this up in case anyone learns anything.
[{"id": "i1oqmm0", "text": "Call the tax assessor and get the mileage rate. If you know the sales price they usually have a calculator for it.", "replies": [{"id": "i1oqvx7", "text": "I'm talking new development.  There is no sales price.", "replies": [{"id": "i1ouz0i", "text": "There\u2019s only two inputs. Assessed value and millage rate. \n\nYou can come up an estimate for #1, the #2 is easy enough to look up.", "replies": [{"id": "i1owjvh", "text": "This. \n\n\\~90% of stabilized value x millage. I don't know why anyone would engage a tax consultant for something like this at a proforma stage. It's a tiny bit of research and simple math. Save the consultant fees for when you need to challenge assessed value.", "replies": [{"id": "i1oxpkw", "text": "its not the proforma stage.  It is post construction unassessed.  \n\nI know how I would value the property with the rent rolls and leases.  I do not know how the county will.\n\nI need to know how much to collect in NNN's as we begin and sign leases.  The property is already partially occupied.\n\nHopefully we won't have to challenge.  That is part of my question.  I want a realistic amount we will be assessed to use by someone who is not looking at the RE value.", "replies": [{"id": "i1oyiqe", "text": "You executed a development without considering the stabilized property tax implications? How did you underwrite your NOI and developer spread?\n\nThe same logic above applies, but, man, this was something you wanted to flesh out before signing leases...\n\nEdit: In an effort to be more helpful, you also need to consider when your municipality will reassess your project. You may hold the low assessment for some period of time. Look for similar projects and their assessed value as comps.", "replies": [{"id": "i1oz114", "text": "Of course we considered them.  I probably know within .50/ SF where the final taxes will be and a cap we can appeal to.\n\nAs we fill the tenant mix on a unassessed property I feel the cap is dropping (which is a great thing).  I want to know if I need to adjust the rate in future leases and if we should expect to have a delinquency in reconciliation.\n\nWhat I want to know is specifically how the valuation will be defined before we appeal (if we have to) to know if I am over thinking this, and as someone in brokerage/appraisal/development I woudn't hate to have someone with a cpa/law license sign off on a recommendation.  \n\nThat said, paying someone thousands to say \"take the tax rate and apply it to the final value\" isn't helpful, and its very common to have property under assessed in my market so I kind of want an idea of how much that could happen.", "replies": [{"id": "i1ozsx5", "text": "What numbers did the appraiser and underwriter use?\n\nFrom experience, the municipality will do their own cost approach and add land value and use that for assessment. It\u2019s useful to look at similar properties to distill their per foot value for a rough cost approach number.\n\nIf this is a massive income property, they may do an income approach too, but usually there is always a cost approach. \n\nIt\u2019s all public record and you can just call down there and have a hypothetical conversation without naming the particular property. They are public servants and it\u2019s their job to explain their methodology. Don\u2019t be intimidated.", "replies": [{"id": "i1pbivw", "text": "&gt; It\u2019s all public record and you can just call down there and have a hypothetical conversation without naming the particular property. They are public servants and it\u2019s their job to explain their methodology. Don\u2019t be intimidated.\n\nThanks that is probably what I just have to do.  \n\nThats the entirety of my question, I don't know how they will reassess it.  I know what its worth, but obviously they don't have our actual leases etc.", "replies": [{"id": "i1peduz", "text": "Careful where you advertise, nowadays they\u2019re on Costar too. Or they could call on your sign pretending to be a prospect. If you\u2019re trying to stabilize it and sell it, they could use your PDF brochure to do the assessment too.", "replies": [{"id": "i1pepx0", "text": "yeah thats what I'm trying to navigate.  We aren't selling but we get reassessed every 3 years regardless and we are open to reassessment because of the building permits.\n\nI can't really not advertise it for leasing obviously but just trying to figure out whats going to happen.  I'm going to call and just ask about a general \"development\" that is proposed and see what they say I should expect without being like \"hey look at this site\"", "replies": [], "depth": 11}], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}, {"id": "i1pcc7v", "text": "&gt; Edit: In an effort to be more helpful, you also need to consider when your municipality will reassess your project. You may hold the low assessment for some period of time. Look for similar projects and their assessed value as comps.\n\nper your edit, that is the entirety of my question.  I know what the property is worth and how to determine the final tax rate.  I do not know what they will reassess at.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "i1pcsf5", "text": "I'm trying to figure out what the assessed value is likely to be and how other folks navigate not knowing that.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i1os4ah", "text": "comps for similar properties in the same municipality. each state has different laws on how assesments can be done and how often, but the simple answer is you will not know the tax rate for sure until it has been assessed. I typically look to similar properties and see what they pay in taxes psf, and use that plus a contingency as my plug until assesment. Most places will not be able to assess your property disproportionately higher than comparable properties without facing the risk of losing in a suit. Property taxes are public domain, they can almost always be found in a state run online directory.", "replies": [], "depth": 1}, {"id": "i1oumv6", "text": "You can use a tax consultant like others have said, but you can get a pretty good estimate by reviewing how the county assesses its property. The website usually gives you the methodology, millage rate, applicable special assessments, and dates of assessment. You can also call the assessor's office and talk to the county's appraisers and assessors with more specific questions. There's typically a step-up on assessed value upon completion of the project (i.e. certificate of occupancy).", "replies": [], "depth": 1}, {"id": "i1ov5vg", "text": "Im a property tax consultant. I mostly lower assessed values on all types of property via appeals process. Doing a pre development tax estimation is something that we do. Basically, need to know how the assessor does their job and other things jurisdictions do.", "replies": [], "depth": 1}, {"id": "i1ov91b", "text": "As an appraiser I\u2019ve found comparing it to the assessments of similar properties to be the most reliable.", "replies": [], "depth": 1}, {"id": "i1oyzma", "text": "We do gross leases instead", "replies": [], "depth": 1}, {"id": "i1p1qum", "text": "We use a few methods. \n\nTax comparables - survey of competitive buildings and then choose an AV based on those. \n\nAssessment capture studies - we track the ratio of assessments to sales and use that figured compared to market value and/or costs\n\nIf you are getting an appraisal, this should be included as the appraiser will need a tax estimate for the income approach.\nAssessor cost data - this is mostly public so if you can figure out how your building will be assessed, you should be able to determine the figures they will use", "replies": [], "depth": 1}, {"id": "i1p2bg7", "text": "What state is this? I guess this is the 1 thing that is easier to do in CA business wise lol.", "replies": [{"id": "i1pcwb0", "text": "Ohio.  Its a damn black box here.  The city, school district and county all have involvement.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i1p66go", "text": "Similar recent construction projects, or get mileage rate &amp; multiple it by the % that will be assessed which is the total cost of the construction (permitted cost)", "replies": [], "depth": 1}, {"id": "i1q9wq1", "text": "Here in Florida, the rule of thumb is a tax market value of 80% of the current market value, but I would usually look for similar properties and see how they are valued for tax purposes.", "replies": [], "depth": 1}, {"id": "i1ri58k", "text": "Just predict the highest possible evaluation in your market\u2026 not hard to calculate if you know your market well \u2026 then plan for the worst is always the rule", "replies": [], "depth": 1}]