You've just purchased commercial real estate in Puerto Rico, and you can't wait to see what the future holds for your coffers. The future looks promising for Island of Enchantment investors seeking to improve their profits and property tax management results.
Research shows that investors in 2021 were paying over $1,000 a square foot in Puerto Rico - a figure similar to that in San Francisco, Miami, or New York. That's because the demand for Puerto Rican properties is on the rise. Many Americans have moved to the country during the past few years to save millions of dollars in property taxes.
You may still be concerned about paying too much in property taxes each year. Let's explore how you can take control of property tax management and minimize your tax liabilities.
Challenging Your Assessment
One of the best ways to reduce your taxes is to challenge any property tax assessment you receive. Conducting research regularly can help you identify if your annual property tax assessments are unreasonably high.
Hire an appraiser to assess your property's value. Present the results to the agency that administers tax assessments in your area.
Private appraisals are generally very thorough since property owners are paying professionals to do an excellent job. Your private appraiser's findings may be enough for you to win your property tax assessment appeal.
Research similar properties in your region, too. You may find similar properties with lower property tax values. Presenting this information to local officials may help you decrease your taxes.
Seek Tax Abatements
Another way to minimize your taxes is to seek a tax abatement. An abatement is a temporary tax reduction, which may help save on costs. This may be available through your local government.
Some local governments offer tax abatements to retain and draw businesses. Their goal is to create opportunities for area businesses to succeed financially. This can foster economic growth long term.
Suppose you purchase a plant facility. Your locale may offer an abatement where you don't have to pay taxes on your equipment in year one. This incentive may help you more easily develop and grow your firm.
Yet another way to lower your tax liability when you invest in real estate is to write off property maintenance costs and upgrades. You may claim a deduction for any qualified expense.
These expenses include utilities, mortgage interest, and property tax payments. Commercial property owners may also write off repairs and operational costs.
Your certified public accountant can help you determine if you can write off certain expenses annually. A property management company can help you complete the necessary financial reporting.
Help With Property Tax Management
The top property tax management tips include appealing your property tax assessment if you feel it's too high. Seeking a tax abatement may also help you save money.
Remember to write off property upgrades and repairs. This is another excellent way to decrease your tax liability.
At PMI Puerto Rico, we can help you maximize your revenue through high-level property management. Our services include marketing, property maintenance, and tenant management.
We can even perform a free rent analysis to determine if you're charging enough for rent. Book a consultation to learn more and schedule a rent analysis today!