Mayer Brown has a strong, experienced and diverse team of professionals who focus on property tax management and reduction work. Property taxes are often the largest recurring expense associated with owning and leasing property.
Particularly during economic downturns and periods of financial stress, assessment officials often feel pressure to push property valuations and, therefore, property tax liabilities, to the highest possible levels. Increased costs due to high property tax burdens put property owners, tenants and managers at a competitive disadvantage. Organizations with property interests should employ comprehensive and robust property tax management and reduction strategies to ensure property tax burdens are kept at fair and reasonable levels.
Mayer Brown has a strong, experienced and diverse team of professionals who focus on property tax management and reduction work. We are skilled at negotiating fair and appropriate property tax burdens with local assessment officials, taxing districts, review boards, administrative taxing bodies and tax tribunals. Mayer Brown’s property tax professionals also have the requisite litigation experience if a taxing official adopts a position that needs to be challenged in court.
Mayer Brown's extensive experience includes challenging assessments for a wide range of property types such as:
- Bank-owned real estate
- Electric power generating facilities
- Long-term health and life care facilities
- Low-income housing
- Medical office buildings
- Movie theaters
- Mineral and stone processing facilities
- Nursing homes
- Oil refineries
- Sanitary landfills
- Self-Storage properties
Mayer Brown also has significant experience in tax abatements, tax incentives and tax exemption litigation. We are well-versed on the laws pertaining to the classification of real and personal property, knowledge of which is critical to prudent property tax management. In addition to being able to service client’s needs with the depth of a boutique property tax practice approach, our practice is supported by the broad resources of an international law firm.
Transfer Tax Management
Transfer and recordation taxes can be a significant transaction expense, particularly when large real estate portfolios are sold or exchanged. Most states, counties and municipalities throughout the nation impose a transfer tax on the privilege of transferring title to real estate. They may also impose a recordation tax on the privilege of recording deeds or instruments evidencing interests in real estate. Historically, transfer and recordation taxes could be avoided by indirect transfers of interests in real estate through the transfer of interests in partnerships specifically created to hold title to single real estate assets. Currently, because of a dire need for new tax revenue, many states, counties and municipalities impose a transfer tax on transfers of controlling interests in entities owning real estate. When transferring interests in single-purpose entities, the tax exposure is often evident. When entities owning substantial multistate real estate assets transfer stock or partial ownership interests, tax exposure can be more difficult to ascertain. Our tax team possesses a broad and unmatched understanding of such tax risks and has a thorough understanding of the structuring, planning, minimization and litigation of transfer and recordation tax matters. We carefully guide and advise our clients on how best to minimize transfer/recordation tax impositions and exposure.
Mayer Brown has extensive experience in the following areas:
Property Tax Management
- Represented large, multistate telecommunications network; devised innovative personal property tax depreciation argument; negotiated with local and state assessment and taxing officials; filed assessment challenge in court and negotiated a tax refund of just under $37 million.
- Represented major oil refinery in Indiana Tax Court and secured property tax refund of more than $18 million.
- Represented major waste disposal company in property tax case of first impression tried in circuit court and twice appealed to the Illinois Appellate Court and to the Illinois Supreme Court; victory resulted in tax savings of more than $16 million.
- Represent major entertainment company; provide property tax management services and file assessment appeals challenging property tax burdens on commercial properties located in multiple states; millions of dollars in property taxes saved.
- Represent private real estate fund in connection with managing all property tax issues associated with a large commercial office property; secured in excess of $9 million in property tax reductions and refunds.
- Represented major telecommunications company in a property tax case of first impression in Wisconsin Circuit Court that resulted in a $1.6 million tax refund.
- Represented major entertainment company in an assessment appeal that challenged the property tax burden on a large commercial property; saved the client in excess of $1.5 million.
- Represented major international electrical component manufacturer and food processing company in Illinois property tax cases of first impression and secured tax refunds of more than $1 million.
- Represented major telecommunications company before the Michigan Tax Tribunal and secured a property tax refund of more than $1 million.
- Represent large California property fund in dispute with California assessment and taxing authorities regarding entity interest transfer and Proposition 13 change in ownership issues.
- Represent numerous charitable institutions securing property tax exemptions on properties used for charitable, educational, religious and other tax-exempt purposes.
- Represented Sun Hung Kai Properties Limited on the tax structure for a contemplated sale of 20 floors of Shanghai International Financial Centre to HSBC.
- Represented several hotel operators on the tax structures of their operations in China, including Swire Properties Limited and a major hotel group.
Transfer Tax Management
- Represent a large, New York Stock Exchange—listed Real Estate Investment Trust—in connection with the transfer tax, recordation tax, mortgage tax implications and potential tax liabilities presented by a $7.9 billion merger of two entities. The real estate assets are located in 41 different states and hundreds of counties and municipalities.
- Secured a transfer tax refund in excess of $5.5 million for a large, publicly traded, satellite communication and entertainment company based in Washington DC in representation of client before taxing officials to contest levied tax liability.
- Represent a large, New York Stock Exchange—listed Real Estate Investment Trust—in connection with the transfer tax, recordation tax, mortgage tax implications and potential tax liabilities presented by a $3.2 billion merger of two entities. The real estate assets are located in numerous states, counties and municipalities.
- Structured $900 million acquisition of a large, multistate hotel property portfolio to efficiently manage transfer/recordation tax exposure. Effectively reduced the transfer/recordation tax from $3.5 million to $750,000, delivering a net savings of $2.75 million. The hotel assets were located in 29 different states and numerous different counties and municipalities, most with unique transfer or recordation tax laws and regulations.
- Advised large, private, multibillion dollar real estate fund on restructuring from a real estate separate account investment format to an open-end, commingled investment fund, resulting in millions of dollars in transfer tax savings.
- Devised transfer tax efficient structures on multiple, multistate portfolio and real estate fund transactions, securing millions of dollars in transfer tax savings.
- Resolved multiple Illinois transfer tax litigation cases; in one dispute our client saved more than $800,000 in transfer taxes, penalties and interest.