Property taxes are one of the most complex and significant expenses involved with owning real estate. As the economy has slowed and companies look to reduce expenses, many real estate owners are challenging their property tax assessments. In an attempt to make the process a little smoother and more cost effective, ePropertyTax developed Property Tax Office, software designed to link a real estate company’s offices and outside service providers to a central database of property tax information.
According to Richard Nearhood, founder and chief executive officer of ePropertyTax, for most property owners, particularly in the retail and office sectors, property taxes represent a third of total operating expenses. “We help REITs achieve their highest level of priority, and that is we help them increase tax savings,” Nearhood says. “Surprisingly, 50 percent of all appeals are successful, and our clients average about 10 percent tax savings per year from their appeals, both significant numbers.”
The company charges customers a flat-fee per year to use its services, averaging in the hundreds of dollars. However, the pricing model varies depending upon the number and size of the properties a company owns, Nearhood says.
ePropertyTax was honored with the Best of the Web award for real estate by Forbes magazine in September 2001, three months after launching its software. The success of Property Tax Office can also be measured in the number of clients using the product. According to Nearhood, the company has eight of the top 16 real estate investment trusts using its system, including Equity Office Properties Trust, Equity Residential and Simon Property Group.
Four years ago, Simon was using Excel spreadsheets to manage property taxes. “After our first merger, the manual system started failing. The spreadsheets kept crashing, and the system was overloaded, and the need for a new system became quickly apparent,” says Frank Lima, executive director of Simon Property’s tax services. Since using ePropertyTax’s application, Simon has substantially lowered costs while expanding its portfolio, according to Lima.
Besides tax savings, companies using Property Tax Office have seen improved cash management, lower administration costs and reduced risk through preservation of data, elimination of penalties, interests, and late fees that are in lost appeal opportunities.
