Fee simple as if unencumbered is an elusive concept and much debated amongst Appraisal Institute members. Ohio law has applied this concept to mean appraising real property assuming a transfer or a lease to a market participant at market terms. Failure to value the fee simple estate leads to an overvaluation and an excessive tax bill. Everyone at Siegel Jennings strives to understand appraisal concepts like this so we can more effectively advocate for our clients and advance fairness in our tax system. I am happy to be part of the firm's long tradition. #PropertyTaxes #CommericalRealEstate
In 2012, Ohio law was revised to clarify that it was the unencumbered fee simple interest to be valued for real property tax purposes after jurisprudence around arm’s length sale prices had become increasingly rigid, ignoring the facts of individual transactions and leading to inequitable assessments among taxpayers. In effect, the presumption had become irrebuttable. Siegel Jennings worked to correct this trend towards nonuniformity and inequity in assessments leading to an amendment to the relevant statute, Ohio Revised Code Section 5713.03. Unlike some jurisdictions, the leasehold estate is not taxable in Ohio, so this ensured that the same interest would be valued for every taxpayer, strengthening the constitutional guarantee of uniform taxation.
