OPINION: Property Tax Bills

When the needs of the many outweigh the needs of the one, your support of Senate Bill 527 and House Bill 342 will prevent tax increases

As an avid Star Trek fan, I firmly believe in making a personal sacrifice to benefit your community. Two bills working their way through the legislature would have a significant impact on one of my businesses as a property tax consultant.

How? Call your legislator and ask them to support the Senate and House bills that would prevent large increases in assessed values and, therefore (property) taxes in 2025.

The pillars of a well-thought-out tax system are predictable results, equitable application, transparent process, and fair outcomes for all parties.

Is it lucrative to be a property tax consultant who knows the system, the laws, and the loopholes? Sure. The current opaque system is subject to volatility and often appears to treat similar properties differently. For example, a 2024 legislative finance report indicates that commercial properties are significantly under-assessed and that the assessors should bring those properties to “current and correct” values as soon as possible. One assessor has opined that current and correct values would be based on replacement cost and that valuation technique, when applied, would increase assessed values over 400% in just one year.

The house and senate bills have been vetted in dozens of public meetings, as well as meetings with the commercial real estate industry and stakeholders. These meetings led to collaboration on a middle-of-the-road approach of not killing small businesses with sudden large tax increases while providing a runway to getting all values to current and correct.

The 12 and 12 bills limit potential increases to no more than 12% a year for a 12-year period. So, if your property is currently assessed at 90%, next year it would go to 100%. If it is assessed at 60% of market value, next year it would go to 72%, and increase 12% a year until it reaches current values. In return for this limit, this break on potential increases, commercial property owners would disclose their sales price, at the closing table, in an affidavit, only to the assessor's office, to be used solely for statistical indexing approach to assist in data and appraisal methodology.

Additional benefits include that selling your property would not create tax lightning, but rather, it would stay on its 12% course. Vacant, raw land is exempt from the cap, and to support new development, when sold for development it will be subject to a discount of 50% each year for the first three. The sales affidavit will include a breakout for properties like hotels, that have both a real and personal property interest. Property tax rates will remain competitive in the region and continue to be a selling point in our economic development efforts.

By not instituting triple-digit increases (which is what could happen if this legislation is not enacted), this legislation will demonstrate to prospects nationally that New Mexico is open for business, and our property taxes are in line with neighboring states.

Please call your legislators and encourage them to support these bills as they will provide transparency, fairness, and equitable tax increases along with predictability for our industry.