Property tax rate value

On Aug 12, 9:29 am, mm <NOPSAMmm2...@bigfoot.com> wrote:

> a buyer [of a property he intends to demolish and rebuild]
> would be in a hurry to demolish, to save on property
> taxes.  But if he is going to tear it down before he uses it, doesn't
> that prove it's worth nothing?

No.   Tax authorities generally appraise real property at its _best_, or highest, usage value, and send tax bills accordingly, whether or not there are actually any "improvements" (buildings) on it, and whether or not the owner intends to tear down any existing improvements and/or renovate or replace them with other structures.   That's why e.g. farmland that is located close-in to a growing city or suburb may be appraised so highly that the farmer has no economical choice but to sell out to developers who will throw up condos and strip malls, unless your locality offers some sort of preservation tax credit to farm owners who "sell" the development rights to the state in return for lower tax bills.  The latter is actually an illustration, not an exception, to the rule of taxing at the highest available usage, since by selling the development rights to the state, the owner is precluded from using the land for anything but growing crops and will only be taxed at the rate for farmland.

> A second, modified question might be that since the congregation is
> now using it and paying him rent, I guess he is using the building
> too.,

You answered both you own questions with that one.  Buyer _is_ using it, as a rental property.  It is generating income for him.  If the tenant is paying market rates, its value as a business investment asset is pretty easily determined by calculating the amount of money that would give that same rate of return locally in a typical investment of similar kind.   E.g. (I don't know the actual figures and am rounding off for ease of example) if other commercial real estate ventures in your area return 5% of their value as rental income each year, then a property that generates $5,000 in annual rentals would be worth $100,000 on the realty sales market and would be assessed on that basis.

--
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Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
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