In 2003, and in some areas earlier, golf courses are now assessed based on the income approach to value. The Municipal Property Assessment Corporation (MPAC) currently uses all the income from green fees, memberships, cart rentals, pro shop sales, food and beverage income and any other income that is derived from the golf course.
Then MPAC subtracts the expenses from each department and they arrive at a net income to be capitalized. Then they deduct a small percentage for personal property before they finalizing the value.
Many golf courses have appealed their 2003 property assessment. The National Golf Course Owner's Association has formed a property tax committee to formalize a procedure on how to value golf courses for property assessment purposes. There are ongoing discussions with MPAC with the desire to come to some settlement on this procedure.
It is the opinion of the Tax Committee that MPAC should not use the business enterprise income as part of the golf course property. This would include food, beverage and pro shop sales including cart rentals. It is the committee's feeling that this income is business income and not property income. Since property assessment is suppose to be valuing the real estate and not the business the property assessments on most golf courses are too high. MPAC have been looking and different ideas to come up with an appropriate valuation procedure. One would be based on the lease value of a golf course and other similar versions to this approach.
An agreement was made in 2011 and all outstanding golf course appeals were settled based on this new agreement. If you are a golf course owner you should contact a consultant to review the new assessment value coming out in 2012 to ensure that the agreement has been followed and the proper procedure is used on your property. If you have recently purchased a golf course you should also have your assessment reviewed in 2012-2013 to ensure that the rates used on the course are accurate for your property.
If you require assistance with your golf course property taxes call 519 351-5405.