By Lance Sigmon

As a past chair and current board member of NAIOP New Mexico, I am recommending legislators pass HB342 & SB527, which will provide equitable property tax reform for non-residential real estate. I’m a registered Republican. Many of the Assessors across the state are Democrats. I’ve been complaining to my wife about the divisiveness and partisanship our country and communities have been engaged in. Instead of complaining about divisiveness, we wanted to be an example to the state of how compromise could actually work.

Instead of just trying to kill the disclosure bill, we reached out to members of the commercial real estate industry and sat down with the assessors to come up with a bill we could both agree on – one that neither one of us was in love with, but that took care of the major concerns of both sides.

When we put ourselves in the assessor’s shoes, we saw men and women who are mandated to bring commercial properties to a current and correct value assessment. We saw understaffed offices with limited tools/resources for appraising every single commercial property in their counties each year. We saw how equitable disclosure could help them do their mandated jobs by providing the missing data they needed to correctly value our properties.

When they put themselves in our shoes, they saw men and women who are taking risk and investing capital in our state in an effort to provide economic development opportunities for all New Mexicans. They saw the struggles we’ve had with inflation, increases in operating costs, higher interest rates and the need for predictability and transparency when it comes to property taxes.

It is important to remember property taxes are a cornerstone of local government funding, supporting essential services such as schools, public safety, and infrastructure. However, disparities in property tax assessments and rates across different types of properties and jurisdictions can undermine fairness and economic vitality.

The crux of the legislation is to provide both equitable reporting and equitable tax rates for residential and commercial properties. Residential real estate has an annual 3% tax rate increase cap. HB342 & SB527 provide an annual 12% tax rate increase cap for commercial properties for the next 12 years. The bill aims to bring valuations of non-residential properties up to statutory and equitable standards while minimizing the impact of these increases on property owners and the small businesses that occupy these buildings.

What is so important about this bill is both what it provides for economic development as well as what it provides the state. Without predictable property tax increases, it makes promoting New Mexico as a welcoming place to do business very difficult. Investors don’t want to invest in properties without having transparent and predictable tax increases year after year.

The legislation is based on Principles of Equitable Property Tax Reform

1. Modernize Assessment Practices: Property assessments should reflect current market values and be conducted on a regular basis to avoid outdated discrepancies. Leveraging new technology that most county assessors utilize will improve accuracy and efficiency, reducing the likelihood of appeals and disputes, which are costly both in time and revenue.

2. Standardize Rates and Policies: This bill will ensure tax rates and policies that will level the playing field.

3. Transparency and Accountability: Clear communication about how property taxes are calculated and allocated will build trust and compliance.

4. Community Engagement: Inclusive dialogue with stakeholders—including businesses and community organizations—is essential to crafting reforms that address diverse needs and priorities.

The time for non-residential property tax reform is now. I urge legislators to pass HB342 & SB527, which is a bill that is fair, transparent, and supportive of sustainable growth. Let’s make equitable property tax reform a cornerstone of our collective progress.

Lance Sigmon is a principal at Allen Sigmon Real Estate Group