Originally published in the September/October 2012 30th Anniversary Issue of The Journal of State Taxation.

James M. Susa focuses on the tax valuation of common areas within a planned community, noting that, while most courts have recognized that an easement granted to benefit one estate to the detriment of another estate may adversely impact the value of the burdened estate so as to render that estate of little value, not all have embraced this concept, and so the litigation continues.

Introduction -

All property, unless exempt, is valued for the purpose of imposing a property tax. The value generally is based upon the market value of the property. Market value is defined as the most probable price a knowledgeable buyer would pay to a willing seller. A unique problem arises when the property being valued is not often sold in the market. One such property is a common area within a planned community. This article will focus on the valuation tax purposes of common areas within planned communities various states where case law or statute addressing such valuation exists.