Miami-Dade County property owners can open their books to cut taxes
By Yudislaidy Fernandez
When Miami-Dade Property Appraiser Pedro Garcia assesses commercial properties for taxes this year, he wants to see owners' rent rolls and income and expense reports.
With experts forecasting commercial market doom in 2010, Mr. Garcia says he wants to be fair and consider a commercial property's income and expenses when making assessments.
Mr. Garcia foresees a further decline in property values but says it's too early to tell how much.
His office plans to begin sending notices to commercial property owners this week requesting the financial documents, which are to be provided voluntarily and kept confidential.
"We understand a lot of commercial buildings are in trouble," said Mr. Garcia, the county's first elected property appraiser, who took office last year. "…We want to be fair to those property owners."
Mr. Garcia says he'll use the information to establish values for income-producing properties under the income approach. Appraisers often use this valuation approach in commercial real estate appraisals that capitalize an income stream into a value indication.
He says he'll use the rent roll, which shows income from rental properties, to match rent information owners provide and to compare rental rates in the area.
Mr. Garcia said Monday he wasn't aware of other counties requesting such information from commercial owners but noted Miami-Dade has been hit hardest by the real estate meltdown.
Last year his office requested such income information from larger commercial properties, but this year Mr. Garcia says he's seeking it from all commercial realty owners.
Owners of commercial properties, such as office, industrial or retail, are to get about three months to send the requested information for consideration.
"It will be for their convenience because expenses are high, rents are lower. It's a great opportunity for them to send that information to us," Mr. Garcia said. "We hope people send us that information so we can help them. That will be a major enforcement we are going to try this year."
With assessment roll estimates not due until June 1, Mr. Garcia says it's too early to talk about property tax values, but he foresees further decline. The appraiser's office has a Jan. 1 basis for assessments.
Mr. Garcia says he still needs December property sales reports, which his office generally gets around February. And he won't know how many people will get homestead exemptions until after the March 1 deadline to apply, another factor in the mix.
The countywide tax roll fell from $245.5 billion in 2008 to about $222.1 billion last year, which meant a $183 million drop in property tax revenue to the county. The county commission sets the tax rate, which means taxes could rise even if property values fall.
"We think that values are still declining," Mr. Garcia said. "I don't foresee the same decline we had last year because we had a tremendous drop in values, but some areas will see a decline in values."