Challenge
Every state has unique rules for non-profit real property tax exemptions. In most states only the owner is eligible to apply for the exemption, but if you own property in Washington State then not only are you eligible as the owner but your tenant(s) are eligible as well. If you or your tenant operates a not-for-profit facility you may be eligible for a partial or full property tax exemption. And as if that wasn’t good enough, applications for exemption can date back to the three previous tax years and it traditionally applies to a larger scope of non-profits than is typically seen in other states (such as hospitals, homes for the aging, dialysis centers, blood banks).
Results
We secured a total of $9,028,110 in unexpected property tax savings over a five year period for our client’s medical buildings and supporting buildings and parking.
Medical Office Campus Landlord
Our team focused on the medical buildings that were entitled to exemptions for the previous three years. In addition, we submit applications for the supporting buildings and parking facilities to receive exemptions as well.
One of the lesser known facts about the Washington State exemptions is that they apply to supporting buildings (administrative buildings, parking garages, etc.) as well as the main building structures. Like most companies, our client didn’t realize that the supporting buildings and parking areas were eligible to be tax exempt. This represented a huge opportunity for savings.
We were able to save our client over $300,000 on the parking garage for the prior 3 years alone and savings of 64% of their total annual bill going forward. The percentage is based on the total number of parking spaces utilized by the non-profit tenants that the parking garage supports
Healthcare Provider
We also provided services to a local regional healthcare provider. This particular group owned and occupied hospitals, clinics, medical office buildings, support buildings, mechanical plants, land, and surgery centers to name a few. Although our client enjoyed the benefit of exemptions on all of their hospitals, they were paying full property taxes on all other property types.
After we were engaged by the client, our initial due diligence uncovered multiple opportunities for exemptions. We first meet with the Department of Revenue (DOR) to discuss the portfolio and then followed up with thorough inspections of each property. Once we determined which properties would be eligible for exemptions, we finalized our applications and then engaged the DOR once again by touring them through each of the properties.
Services provided
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