COVID-19: Real Estate Tax Valuation Notice 2020
Written by Lee Shephard, Executive Vice President Management Services
We are approaching that time of year when the new Real Estate Tax Valuations will be sent out by the counties. In the past, these valuations are usually received in July, but we think they could be delayed due to the COVID-19 outbreak. It is particularly important to review the valuation this year due to the effects of COVID-19. There will likely be little to no increase and possibly a reduction in value to occur from COVID-19 due to non-payment of rent by tenants and the reduction of rent due to increasing vacancies. In theory, this should not impact the values because they are set on January 1st for the purposes of the Tax Rolls and the outbreak was not an issue at that time. However, things have dramatically changed since January 1st.
The reasoning for somehow reflecting the change in values for events after January 1st is that the King County Assessor has asked the Washington State Legislature to lower the value of commercial properties for the 2nd half 2020 tax payments for those owners who have been unable to collect rent since the stay-at-home order closed down so many businesses. If approved by the Legislature, owners would be able to seek reductions on a case by case basis showing how they have been harmed. This is expected to mostly impact retail properties because many office and industrial properties have generally not suffered the effects of this as greatly as retail properties.
Given that the Assessor is promoting this legislation, we think there is a good chance that the 2020 valuation for 2021 will somehow reflect the valuations on an overall basis as opposed to on an individual basis.
For an overview of Real Estate Tax Valuation Notices, read our blog here: https://www.nai-psp.com/news-and-insights/real-estate-tax-valuation-notice
REFERENCE DOCS AND RELATED ARTICLES
- 84.40.039 Amendment
- 2020 COVID ReVal Release
- RCW 84.70.010 Amendment
We believe the information above to be correct, however, we are not attorneys, accountants or real estate tax specialists. Please consult with your legal, accounting or real estate tax professionals for further information regarding this subject.