Why are Possessory Interest holders being charged property tax in addition to the rent they pay the government? Isn that really a form of double-taxation?
Those who receive Possessory Interest assessments are often puzzled and perplexed by the apparent paradox of on the one hand paying rent to a government entity and on the other being asked to pay property tax as well. In theory, at any rate, the explanation for that circumstance is rather simple: Government entities do not have to pay property tax and thus their rent charges do not include an increment to recover such taxes (similar in that respect to a triple net lease). At the same time, the private possessor still receives the services and benefits (fire and police protection, schools and local government) that other similar taxable properties enjoy and the Possessory Interest tax helps to pay the holder’s fair-share of those costs. In other words, Possessory Interest rents reflect only the public’s return on its investment and do not include a property tax component. On the other hand, private sector rents include both the owner’s return on investment and a property tax component t
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- Why are Possessory Interest holders being charged property tax in addition to the rent they pay the government? Isn that really a form of double-taxation?
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