Industrial Real Estate: Taxes, Deductions, and Key Filing Dates
Industrial real estate generates income and expenses that require different tax treatment than residential property. Warehouse owners, manufacturing facility landlords, and flex-space investors all face a recurring set of questions: are real estate taxes the same as property taxes, and if so, can those costs actually reduce your federal tax bill? Getting these answers right before filing saves money and prevents the kind of errors that trigger audits.
This article walks through how taxes apply to industrial real estate holdings, clarifies whether are real estate taxes tax deductible for business owners, addresses is real estate taxes the same as property taxes for those who encounter both terms, and notes the critical deadline of when are business taxes due 2019 for any investors still handling amended filings from that period.
Are Real Estate Taxes and Property Taxes the Same Thing?
How the Terms Relate
When clients ask is real estate taxes the same as property taxes, the short answer is yes — in most contexts. Both terms describe the annual tax levied by a local government on the assessed value of real property. State and county assessors determine market value, apply an assessment ratio (often 80 to 100% of market value for commercial and industrial properties), and multiply by the local mill rate to calculate your bill.
In practice, the phrase “real estate taxes” appears more in IRS publications and federal tax forms, while “property taxes” is used more in state and local documents. For industrial real estate owners, the distinction matters only when reading tax code language — the actual tax bills are the same obligation. Understanding that are real estate taxes the same as property taxes helps you correctly identify line items on your Schedule E or Schedule C without confusion.
Assessment Rates for Industrial Property
Industrial properties often carry higher assessed values per square foot than single-family residential because local governments view them as more productive tax base. Warehouse and manufacturing facilities in active logistics corridors can carry effective tax rates of 1.5% to 3% of market value annually. Know your assessment ratio and appeal the valuation if comparables in your submarket suggest the assessment is inflated — successful appeals typically reduce assessed value by 10 to 20%.
Deductibility and Filing Deadlines
Are real estate taxes tax deductible for commercial and industrial owners? Yes — business real estate taxes are fully deductible as ordinary business expenses on Schedule E (for rental income) or Schedule C (for businesses operating from the property). Unlike the $10,000 SALT cap that applies to individual homeowners, business property tax deductions have no ceiling under current IRS rules.
To claim the deduction, you must have paid the taxes during the tax year being reported. Prepaid taxes that cover a future year are deducted in the year they actually apply, not the year they were paid. Keep your county tax payment receipts and your escrow statements if your lender handles tax payments through an impound account.
For investors still addressing prior-year issues: when are business taxes due 2019 filings that required amendment? The IRS standard statute for amended returns runs three years from the original due date, which means the 2019 window (original due date April 15, 2020) closed in April 2023. Amended returns past that window generally cannot generate refunds, though filing for record correction is still possible in limited circumstances. Work with a CPA if you have unresolved industrial real estate deduction questions from that period.
Quarterly estimated tax payments on rental income from industrial real estate are due April 15, June 15, September 15, and January 15. Missing these adds a penalty of roughly 3 to 5% annualized on the underpaid amount.