Industrial Warehouses are properties that are employed for storage and light manufacturing as part of the manufacturing and distribution process. This type of real estate may be used to store inventory and feedstock used in the manufacturing process or store the finished product before it is shipped or distributed to wholesalers or retailers. Any warehouses that are used to store this equipment or inventory along the supply chain can also considered Industrial Warehouses. An Industrial Warehouse is considered Light Industrial Manufacturing when it also has space designated for manufacturing.
Light Metallic, Heavy Metallic, Metallic, and Non-Metallic refers to the materials used for the construction of the building.
Any inventory, feedstock, & supplies; computers, fixtures & furniture; machinery & equipment not fixed to the building; and vehicles are considered Business Personal Property (BPP). BPP is any property you own that is used for business purposes that is not your real property.
For appraisal purposes, a county appraisal district (CAD) typically subdivides Industrial Warehouse properties into the categories shown above based on their highest and best use. A CAD will derive two different values when appraising real estate property: Market Value and Equity Value.
The most common strategy used by the CAD to determine Market Value for Industrial Warehouse real estate is the Cost Approach including any evidence of new construction or remodeling. Cost Approach can also be supported by the Sales Approach where market data and comparable sales in the area point to a lower value.
The Equity Value, also known as Uniform and Equal, is based on the CAD’s valuation of Comparable Properties and can also be used to fight for a lower value.
When appraising business personal property (BPP) as described above, the appraisal district uses one or a combination of one of the following methodologies: Year of Acquisition, Book Value to Market Value Conversion, Net Book Value and New Age Mix, plus the use of standardized depreciation tables to determine the property tax value of a BPP account.
Bettencourt Tax Advisors, LLC has an experienced industrial team which can provide property tax services on complex industrial properties. These types of properties may be valued on the real estate and business personal property. Exemptions may also be applicable.
Contact Bettencourt Tax Advisors, LLC for more information on how BTA can help you lower your property tax values.