critical information-tax appeals

Income Approach

IImproved commercial/industrial property typically is valued with emphasis on the income approach for assessment purposes. Florida Administrative Code addresses whether actual income records should or must be furnished.

  • 12D-1.005,F.A.C. Access to Financial Records. 
    (1)a) Access to a taxpayer’s records shall be provided only where it is determined that such records are necessary to determine the classification or value of the taxable non-homestead property.

VAB petitioners can and should use pro forma income analysis, as if the property was vacant on January 1st. Market data including rental rates, vacancy rates, operating expenses, and capitalization rates are published on line by commercial real estate brokers and the University of Florida’s Bergstrom Center.

Note that property taxes are NOT included as an operating expense. Instead, millage rates are loaded ~ added to capitalization rates ~ for assessment purposes. DOR Bulletin PTO 11-01 describes the way costs of sale, per §193.011(8) Fla. Stat., should be applied to value calculations.