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Lotzar Law Firm P.C.

Legal talent that pays for itself.
480.905.0300 x103 8687 E. Via de Ventura, Suite 115 Scottsdale, Arizona 85258

Property Tax Abatement vs. Property Tax Exemptions – GPLET

November 12, 2015 by Charles Lotzar

All business organizations, developers, and investors within Arizona must take proactive steps to reduce tax liability in order to maximize their Return On Investment (ROI), reduce operating costs, nd enhance profitability of commercial real estate. Minimizing tax liabilities can make a big difference in costs. housing-crisis-1020195-m

Property taxes are one of the most costly taxes for commercial real estate owners, investors, and organizations with their base of operations in Arizona. Lotzar Law Firm, P.C. has extensive experience representing commercial property owners throughout Arizona who wish to reduce property tax liabilities.

Our Scottsdale, Arizona real estate lawyers can provide a comprehensive evaluation of your current tax liabilities and can identify any potential for reductions in property taxes. We can also help with developing a deeper understanding of the important differences between Property Tax Abatement vs. Property Tax Exemptions.  We will work hard to ensure your tax liability is kept to the minimum necessary to remain in full compliance with Arizona state laws.  Call today to speak with a real estate lawyer for assistance in tax planning for your new construction commercial real estate project or for existing commercial real estate.

Understanding the Differences Between Property Tax Abatement vs. Property Tax Exemptions

The difference between Property Tax Abatement vs. Property Tax Exemptions is simple. Exemptions reduce a property’s assessed value. Property tax calculations for both residential and commercial real estate are based on the assessments of the value of the property, which the County Assessor performs on a regular basis. Reducing the assessed value results in a reduction in total tax liability.  Abatements do not involve a reduction in the value of the property. Instead, abatement reduces the amount of taxes owed.

In Arizona, there are numerous ways to reduce property tax liability for commercial enterprises. The Government Property Lease Excise Tax (GPLET), for example, is a program established by Arizona to encourage development through the reduction of operating costs.  The GPLET program works by substituting an excise tax for a real property tax.  The land is conveyed to a government entity and then leased back for use by private enterprise.  The excise tax is based on the gross square footage of the building, and is established based on the type of business being operated.

The excise tax may be substituted for the Property Tax for a period of up to 25 years for GPLET participants.   If the property is within a Redevelopment Area and is located with a Central Business District, the excise tax itself can be abated for a period of up to 8 years after the building’s Certificate of Occupancy is first issued.

Other forms of Property Tax Abatement and Property Tax Exemptions may also be available, including abatements and exemptions for property not owned by and leased from the government.  A developer, investor, or owner of commercial property should speak with a Scottsdale, Arizona business lawyer for help determining what types of Property Tax Exemptions and Property Tax Abatements may be available.

Lotzar Law Firm, P.C. knows federal and state tax rules and can provide your business with comprehensive advice on reduction of all types of tax liabilities. To learn more about the differences between Property Tax Abatement vs. Property Tax Exemptions, call today.

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Charles Lotzar
Charles Lotzar
With more than 25 years of legal experience, Chuck Lotzar knows how to solve problems and make deals happen. He earned his Bachelor of Arts in Business from Michigan State University in 1982, and his Juris Doctorate from the University of Detroit School of Law in 1985. Mr. Lotzar has extensive experience dealing with public contracts and issues related to public officials and has been involved in bond financings with an aggregate value in excess of $5 billion.
Charles Lotzar
Latest posts by Charles Lotzar (see all)
  • How Often Do I Have to Re-Certify a Tax Credit Tenant’s Household Income? - November 12, 2015
  • Property Tax Abatement vs. Property Tax Exemptions – GPLET - November 12, 2015
  • Can You Restructure Your Business Under the Arizona Entity Restructuring Act? - November 5, 2015

About Charles Lotzar

With more than 25 years of legal experience, Chuck Lotzar knows how to solve problems and make deals happen. He earned his Bachelor of Arts in Business from Michigan State University in 1982, and his Juris Doctorate from the University of Detroit School of Law in 1985. Mr. Lotzar has extensive experience dealing with public contracts and issues related to public officials and has been involved in bond financings with an aggregate value in excess of $5 billion.

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FROM OUR BLOG

How Often Do I Have to Re-Certify a Tax Credit Tenant’s Household Income?

Property Tax Abatement vs. Property Tax Exemptions – GPLET

Can You Restructure Your Business Under the Arizona Entity Restructuring Act?

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