Local investors and property owners are up in arms over the possibility of increasing property taxes by the City of Providence. As of late December, the City Tax Assessor’s Office began conducting a 3-year tax evaluation—with permission of tenant or owner–on all taxable income or investment properties.
In partnership with Vision Government Solutions Inc. (Vision) of Northborough, MA, assessors will be using the income analysis approach, to determine the value of commercial or investment properties. According to the Providence Tax Assessor’s website, property owners should expect to be approached by assessors with questionnaires regarding the income/expense on their property, as well as measuring the exterior and inspecting the property’s interior.
Is This Approach Effective?
Sure, this approach is similar to how banks may qualify you for a loan. However, the income analysis approach is used on income-producing investments and will apply “market” rate income to publicly assess the value of these properties. If you know Providence, you would know that it is quite difficult to correctly assess the taxable value of each property.
Although the approach isn’t objectionable, it does provide an inaccurate calculation of a property’s value. Many investors are worried that their property taxes may ultimately increase as a result.
Geo Properties’ president and co-owner, George Potsidis, is one of many who feel that this tax evaluation is just another ploy used to raises taxes and earn money. “They conducted an evaluation three years ago and my taxes have almost doubled,” says George. “The possibility of taxes going up again is sending owners over the edge. Why another one?”
What You Can Do
Filling out the questionnaire isn’t mandatory so owners have the option of not filling it out. However, in the event that owners choose to not participate, the city will apply a “market” rate income, which can be appealed by providing their own data.
The City of Providence will be asking the General Assembly to consider mandating this questionnaire this year.