Frequently Asked Questions - Real Property

1. What is Market Value?

Finding the market value of your property involves discovering the price most people would pay for it in its present condition. It's not quite that simple, however, because the assessor has to find what this value would be for every property, no matter how big or small. But the assessor's job doesn't stop there. Each year valuations must be done all over again, because the market value of almost everything changes from one year to the next.

2. Why have a Property Tax?

Properties are appraised so our community has advantages such as schools, fire and police protection, and other public benefits. Each property owner pays a fair share of the cost, in proportion to the amount of money our individual properties are worth.

The property tax is part of a well-balanced revenue system. It is a more stable source of money than sales and income taxes because it does not fluctuate when communities have recessions. When the community spends tax dollars on better schools, parks, and public services, property values tend to rise. Some of the windfall benefits you receive from these improvements are recaptured by the property tax.

3. How is Property Appraised?

To find the value of any piece of property, the assessor must first find out what properties similar to it are selling for, what it would cost to replace it, how much it takes to operate and keep it in repair, what rent it may earn, and many other facts affecting its value, such as the current rate of interest charged for borrowing the money to buy or build properties like yours.

Using these facts, the assessor can then determine the property value in three different ways. Cost Approach: The first method to value your property is based on how much money it would take, using current material and labor costs, to replace your property with one similar. If your property is not new, the assessor must estimate depreciation as measured in the marketplace based on sales of used homes.

Sales Comparison Approach: A second method compares your property to others with similar characteristics that have sold recently. These prices, however, must be analyzed very carefully to get the true picture. One property may have sold for more than it was really worth because the buyer was in a hurry and would pay any price. Another may have sold for less money than it was actually worth because the owner needed cash right away and sold the property to the first person who made an offer.

When using the sales comparison approach, the assessor considers overpricing or under-pricing and analyzes many sales to arrive at a fair valuation for your property. Size, quality, condition, location, and time of sale are also important factors that are considered.

Income Approach: The third way is to evaluate how much income your property would produce if it were rented as an apartment house, a store, or a factory. The assessor must consider operating expenses, taxes, insurance, maintenance costs, and the return most people would expect on your kind of property.

4. Why do Assessed Values change from year to year?

When market value changes, so does assessed value. For instance, if you added a garage to your home, the assessed value would increase. Property in poor repair decreases in value.

Real Estate transactions create value. The assessor has the legal responsibility to study transactions and appraise your property accordingly.

5. What are your rights and responsibilities?

If your opinion of the value of your property differs from the assessor's, by all means go to the office and discuss the matter. Staff will answer your questions about the appraisal and explain how to appeal if you cannot come to an agreement. The Assessor's Office relies on the property owner for information. You can help by providing accurate information. If you have questions, feel free to call our office at (360) 867-2200 or come in to see us.