New Construction Tax Engineering™
Make Tax Engineering™ Part of Your New Construction Tax Strategy
Early tax-sensitive choices related to design, terminology, the methods of attachment, and the collection of costs are critical to achieving the most advantageous tax profile for a project without compromising the design integrity of the facility or improvements. Tax Engineering™ is the proactive process of executing a strategy to reduce five associated types of taxes, affecting both property owners and lease tenants alike, and in the process producing the highest percentage of personal property subject to accelerated depreciation under today’s complex and ever-changing tax laws.
This proactive approach typically increases the final personal property tax by 8-15%!
- Proactive choices are critical and cash flow benefits far exceed the cost.
- Engineering expertise integrated with tax knowledge is essential.
- Property taxes and sales taxes may also be reduced through the application of Tax Engineering™ principles.
A major insurance firm utilized this initiative on a 1.5 million square foot headquarters building, with a final personal property segregation of 31.7% instead of 15-20% more commonly found.
The ideal timing for implementing expert input is at the early stages of design and planning to provide guidelines for the architectural and engineering team. The result is a larger depreciation expense for tax purposes, deferring tax payments into the future and accelerating investment recovery and cash flow associated with these projects.