by William J. Bruin, Jr.
The COVID-19 pandemic has caused an extreme financial hardship on most, if not all, Missouri families. As such, many owners of real estate are investigating how best to reduce their outstanding financial obligations and save resources wherever possible.
Given this crisis, one obvious area to investigate is real estate tax liability. Missouri reassesses all real estate every odd-numbered year (e.g., 2019, 2021, etc.). In even-numbered years, local Missouri assessors normally allow values to remain unchanged from the prior odd-numbered year. 2021 is a reassessment year for all Missouri local assessors.
Real Estate Assessment
Real estate assessment is the process of local county assessors placing a fair market valuation and classification on all real estate. Missouri properties are divided into three classifications: commercial, residential, and agricultural. If the assessed valuation changes during the reassessment, the assessor sends out a Notice of Assessment to the taxpayer.
Appeal of Real Estate Valuation
Valuations are typically available in late spring to early summer. If you disagree with the county assessor’s valuation, you can appeal the property tax. Appeals must be filed on or before the second Monday of July. In 2021, all appeals must be filed on or before Monday, July 12, 2021.
To file an appeal, obtain the proper real estate tax appeal forms (generally found on the local Board of Equalization (BOE) website). File the forms and submit evidence to support your opinion of the fair market value on your property to the local BOE.
Once the fair market value of the property has been determined, the assessor must apply the appropriate percentage to the fair market value. In Missouri, commercial property is assessed at 32% of the fair market value as January 1 of the reassessment year. Residential property is assessed at 19% of the fair market value. Finally, agricultural property is assessed at 12% of the fair market value.
Real Estate Taxes
The tax on real property is determined by the assessed valuation of the property multiplied by the actual tax rate set by the local government where the property is located. Tax bills are generally mailed out annually in late fall with payment due on or before December 31. If real estate taxes are not paid when due, the taxes become a lien on the property with interest and penalties possibly added after January 1 of the following year.
Real Estate Tax Appeals: The Local BOE and Beyond
An experienced real estate tax attorney is highly recommended for real estate tax appeals. You must present clear evidence that the assessed valuation of the property is incorrect and provide supporting documentation of your opinion as to the correct valuation.
Hearings before the Board of Equalization are generally held in July and August each year. Written decisions are received within 30 days. If you are unhappy with the decision, you can then file an appeal with State Tax Commission of Missouri (“STC”). The STC appeal must be filed within 30 days of the BOE decision or before September 30, whichever comes first.
William J. Bruin, Jr., a real estate attorney with Danna McKitrick, P.C., practices in the areas of real estate, real estate development, and real estate tax appeals; banking and finance; Section 1031 IRC like-kind exchanges; and corporate law. He can be reached at 314.889.7162 or firstname.lastname@example.org.