Property Tax Adjustment For Decibel Levels aka NOISE

What happens if you have noisy neighbors? All too often, previous assessment levels are rolled over and no consideration or oversight to actual market valuation be it for a home or a business.

As a business there could be vacancies resulting in a lack of income. If changes in assessed valuations are not challenged, one remains over-assessed. The same for homeowners. If over-assessments are not challenged, the property tax will not change.

Decibel Levels

One area often overlooked is how decibel levels effect real estate valuations. Noise affects real estate prices, and possibly a lot more in the way of increase in tension and other health side effects. Several government studies have cited noise as a devaluation factor that noise has ruined property value.

Noise levels above 45 Decibels are capitalized into decreases market valuations for a property according to the cited study. “As the noise level increases, the discount on housing value increases. Lastly, we show that not only the discount on the housing values increases in traffic noise levels, but also high intensity of traffic congestion and usage leads to a further discount on housing values.” https://www.researchgate.net/publication/282994059_The_impact_of_traffic_noise_on_housing_values

“According to a realtor.com study, sellers of homes within a 2-mile radius of an airport will discount prices 13.2% from the going rate of other homes in the same ZIP code; sellers will also offer discounts for close proximity to railway tracks (12.3%) and highways (11.3%). https://www.realtor.com/advice/buy/noise-pollution/

Business income property is more about location, location, location and noise may not play a factor. However, since seventy-eight percent of full-time workers said they live paycheck to paycheck, up from 75% last year, according to a recent report from CareerBuilder, swings in business incomes have come to the forefront. With less disposable income and 71% of all U.S. worker saying they are now in debt according to CareerBuilder, the business sector deserves a look. Not for noise but for vacancies.

 Property tax appeals for businesses use an Income Method as opposed to a Market Value approach for valuating residential properties. The Income Method approach uses capitalization to convert the anticipated benefits of the owner ship of property into an estimation of present value. It takes, essentially, the potential rental income of a property, deducts for anticipated operating expenses, applies a capitalization rate to the left-over net operating income to come up with a valuation.

If one sees a strip mall with vacancies, to be sure, there is a property tax appeal possibility. Loss of anticipated fair market rents, operating expense increases are reasons for scrutiny that lead to appeal. However, much like residential real estate, most owners have too much on their plate to take advantage of appeal. Similar to a residential property, the tax assessor will not go out of his way to lower an assessment unless the property tax is appealed.

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