Assessment & Value
Fair Market Value
Residential, commercial, industrial, agricultural real and personal property are appraised at 100% market value. Market value of a property is an estimate of the price that the property would sell for on the open market on the first day of January of the year of assessment. This is often referred to as the "arms length transaction" or "willing buyer / willing seller" concept. The Assessor must determine the fair market value of real and personal property. To do this, the Assessor generally uses three approaches to value.
The first approach is to find properties that are comparable to the subject property and that have recently sold. Differences between the sales and the subject property are then considered. This method is generally referred to as the market approach and is usually considered the most important in determining the value of residential property.
The second approach to value is the cost approach, which is an estimate of how many dollars at current labor and material prices it would take to replace a property with one similar to it. In the event the improvement is not new, appropriate amounts of depreciation and obsolescence are deducted from replacement value. Value of the land is added to arrive at an estimate of total property value.
The income approach is the third method used if the property produces income. If the property is an income producing property, it could be valued according to its ability to produce income under prudent management; in other words, what another investor would give for a property in order to gain its income. The income approach is the most complex of the three approaches because of the research, information and analysis necessary for an accurate estimate of value. This method requires thorough knowledge of local and national financial conditions, as well as any developmental trends in the area of the subject property being appraised since errors or inaccurate information can seriously affect the final estimate of value.
Why Values Change
After properties have been appraised, the values are analyzed to ensure accurate and equitable valuations. Changes in market value as indicated by research, sales ratio studies, analysis of local conditions, as well as economic trends, both within and outside the construction industry, are used in determining property values.
Notice of Change in Assessment
If the Board of Tax Assessors changes a property owner's value, it is required to send the taxpayer a "notice of change in assessment." The owner who disagrees with the Assessor's estimate of value should consider these three questions:
- How does the value compare to similar properties in the neighborhood and is it valued uniformly?
- Is my property taxable?
- What is the actual market value of my property, or what would it sell for?
Appeal the Assessment
If the owner decides to appeal the assessment, it must be done in writing. Taxpayers may appeal their assessment to the county board of equalization by mailing or filing with the county Board of Tax Assessors a notice of appeal within 45 days from the date on which the notice was mailed. In counties where the governing authority allows payment of taxes in installments, a notice of appeal must be filed or mailed within 30 days.
Board of Tax Assessors Review
The Board of Tax Assessors will review the appeal, and if a change is made to the value, a written decision will be mailed to the owner. If the owner is still not satisfied with the BTA decision, he / she will the have 21 days to respond in writing requesting the appeal be forwarded to the Board of Equalization. Of course, if the owner is satisfied with the change, there is no need to respond. If the Board of Assessors does not find a reason to change the value, the appeal will be forwarded to the board of equalization or to arbitration without the necessity for the taxpayer to file another written appeal.
Questions / Concerns
If you have any questions about the assessment of your property, please contact your county assessor's office.