From the moment you start considering adding a commercial property to your financial portfolio, any action you take can affect how much tax you pay on it per year. The truth is that property tax rates and costs are variable.
There are incentives out there to help you pay your fair share without breaking the bank.
Here are five ways commercial property owners can save money on their tax bills.
1. Find Tax Bills in Your Area Offering Discounts
Paying your commercial property taxes early can only help you. Some counties will allow for discounted taxes on commercial property. For example, you can get a four percent discount for paying early in Broward County, Florida, by a certain time of year.
2. Make One Property a Charitable Land Donation
One type of tax deduction that can help you go far during tax season is charitable land contributions. If you do claim a commercial property as such, you do need to be careful to not make it look like you gained another benefit from it.
If that does happen, the IRS will interpret it as a for-profit transaction. They can then decide whether to limit or completely disallow the tax deduction.
3. Look up Any Capital Allowances
Many commercial property owners don’t know that there are opportunities out there to claim property capital allowances. Capital allowances allow you to claim capital expenditure as part of a tax reduction. This potential tax benefit is available to the individual or company that incurred the relevant expenditure or purchased the property.
You can learn more about super deduction here.
4. Make Eco-Friendly Deductions Work For Your Property
Businesses and property owners alike have been recently getting wind of government-supported initiatives to make their expenditures and properties environmentally friendly. Commercial owners can use them for their property also.
Some examples that can be deducted include:
- Energy-efficient climate control systems (i.e. heating, AC)
- Renewable sources as alternative forms of energy (i.e. solar, water, wind)
- Improvements to a building’s exterior (i.e. installing energy-efficient windows)
Make your commercial property work for your tax bill and the planet.
5. See How Much You Pay in Property Taxes
If you are a commercial property owner with a lot of properties under your wing, you might not know how much you pay in commercial property taxes annually. No matter what, you need to keep track of what each property costs you and seek ways to lower it through property tax appeals.
Commercial Property Owners Can Save Taxes With These Tips
As commercial property owners, it is great to get income from your property, though it can hurt you in the taxes you have to pay.
If you work with the right tax consultants who have expertise in commercial property, you will have a better chance of lowering your tax bill. While not every idea on this list will work for everyone, it can never hurt to take advantage of these tips in the hopes they do.
We hope these tips help you out next tax season when you need to claim taxes on commercial properties. If you want more tips on how to save money in the real estate industry, check out our Real Estate section on our blog.