We have a small park in Arizona which is for sale. A potential buyer is concerned that the sale of the park may cause a reassessment of its value, and cause a tax increase for the new owner. Any thoughts on this?
The buyer is correct. To see the tax implication you would take the purchase price and apply the current mill levy to see what the tax burden might be. The increase in taxes should be figured into the NET- and it will lower the value of the community by affecting the CAP rate at a ratio of about $10 in lost value for every $1 in increased expenses… that is a rough number- but it will put you in the ballpark…
Another option is to transfer part of the sale as business/goodwill. I see this being done all the time. The assessor is only supposed consider real estate (land and improvements) for the assessment.
You can also ascribe value to1. the ‘business’ of being in the home renting/RTO-ing line of work. This is easier to justify if you are a licensed dealer2. The mobile homes3. Any tools, furniture, computer equipment, etc. in the officeGood luck,-jl-